STATE OF MADHYA PRADESH vs BHOPAL SUGAR INDUSTRIES LTD.

The Supreme Court held that the Bhopal State Agricultural Income-tax Act, 1953, contravened Article 14 of the Constitution as it imposed differential treatment without a rational basis after the reorganization of states. The Court established that geographical classification based on historical reasons could be upheld if reasonably justified, but arbitrary differential treatment is unlawful. The Court affirmed the High Court's decision to restrain the enforcement of the Act, emphasizing the need for legislative adjustments to ensure equality under the law.