THE AMALGAMATED TEA ESTATE CO. LTD. ETC. vs STATE OF KERALA

The Supreme Court upheld the provisions of the Kerala Agricultural Income Tax Act, 1950, as amended by the 1970 Amendment Act, which imposed a graduated tax rate of 65% on domestic companies and 75% on foreign companies. The Court ruled that this classification did not violate Article 14 of the Constitution, as it satisfied the classification test of intelligible differentia and rational relation to the legislative purpose. The Court emphasized that the classification test is not inflexible and grants the State greater leeway in taxation matters, thereby dismissing the petitions.