THE TATA IRON & STEEL CO., LTD. vs THE STATE OF BIHAR

The Supreme Court upheld the validity of the Bihar Sales Tax Act, 1947, specifically Section 4(1) and Section 2(g), ruling that the provincial legislature had the authority to impose sales tax, including retrospective levies. The court rejected the appellant's argument that the tax was akin to excise duty and emphasized the applicability of the theory of territorial nexus. The dissenting opinion noted concerns regarding the retrospective nature of the tax, but the majority held that the provisions were constitutionally valid and within legislative competence.