STATE OF U.P. AND ANR. vs M/S. SYNTHETICS AND CHEMICALS LTD. AND ANR.

The Supreme Court addressed the validity of the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976, which imposed a purchase tax on industrial alcohol. The Court held that the State's power to levy such a tax was restricted by the Central Government's regulation under Section 18G of the Industries (Development and Regulation) Act, 1951, and the Ethyl Alcohol (Price Control) Orders. Consequently, the Court affirmed the High Court's decision declaring the U.P. Act 8 of 1976 null and void, establishing that the State lacked legislative competence to impose the tax in question.