Supreme Court Upholds Odisha Entry Tax Act in Tata Sponge Iron Case, Refuses to Reopen Constitutional Challenge [Read Order]

The Supreme Court upheld the validity of Odisha Entry Tax Act, 1999 in Tata Sponge Iron case and refused to reopen constitutional challenge, holding that same issue had already been finally decided in earlier rounds of litigation.

Tata Sponge Iron Ltd. filed a Special Leave Petition before Supreme Court challenging judgment of Orissa High Court dated 27 February 2019. The company sought to strike down Odisha Entry Tax Act, 1999 and rules framed under it. It also sought refund of entry tax already collected from it.

Before Supreme Court, petitioner argued that Odisha Entry Tax Act violated Articles 301 and 304(a) of Constitution of India, as it imposed discriminatory tax on goods brought from other States and restricted free trade and commerce. The petitioner argued that levy was unconstitutional and lacked legislative competence.

The state of Odisha argued that very same challenge had already been raised by Tata Sponge Iron in earlier writ petition filed in year 2000. That writ petition had been dismissed by Orissa High Court in 2002, and dismissal was later affirmed by Supreme Court in 2017. The state argued that issue had attained finality and could not be reopened.

The Petitioner’s counsel also relied on Supreme Court orders where liberty was granted to file fresh writ petitions challenging entry tax in light of later judgments. The counsel argued that it should be allowed to raise constitutional challenges again on this basis.

A Bench comprising Justice Aravind Kumar and Justice Prasanna B. Varale observed that relief sought in present petition was identical to relief sought in earlier writ petition filed by petitioner. The court observed that earlier challenge to Odisha Entry Tax Act had already been rejected and affirmed by Supreme Court.

The court explained that liberty granted in other cases to file fresh writ petitions was limited only to those petitioners who were parties in those proceedings. It pointed out that such liberty could not be extended to Tata Sponge Iron, whose challenge had already been finally decided.

The Supreme Court dismissed Special Leave Petition and declined to interfere with High Court’s judgment. The court clarified that its observations were limited to present cases and would not affect other pending matters.

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