UNION OF INDIA AND OTHERS vs MAHARAJA KRISHNAGARH MILLS LTD.(IN LIQUIDATION).

The Supreme Court determined that the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period from April 1, 1949, to March 31, 1950, under Articles 277 and 278 of the Constitution of India. The Court held that Article 277 serves as a saving provision but must yield to any agreement made under Article 278, which allowed the Union to collect such arrears. The High Court's contrary view was overturned, affirming the Union's right to collect the dues as per the agreement with the Rajpramukh of Rajasthan.