UNION OF INDIA AND OTHERS vs GWALIOR RAYON SILK MANUFACTURING (WEAV-ING) CO. LTD. AND

The Supreme Court ruled that the agreement made between the erstwhile State of Gwalior and the appellant company for tax exemption is binding, despite the subsequent changes in the state's status under the Constitution of India. The Court held that the Finance Act, 1950, Section 13, does not nullify the previously granted exemptions as per the Part B States (Taxation Concessions) Order, 1950, Clause 16. Consequently, the appellant is entitled to the tax exemption for the full period stipulated in the original agreement.