STATE OF KERALA vs A.B. ABDUL KHADIR & ORS.

The Supreme Court held that the provisions of the Luxury Tax on Tobacco (Validation) Act, 1964, do not infringe Articles 301 and 304 of the Constitution unless they directly and immediately impede the free flow of trade. The Court clarified that not every tax constitutes a restriction under Article 301, and the High Court erred in its interpretation of the Kalyani Stores case. The matter was remanded to the High Court to determine if the Act's provisions indeed constituted such restrictions.