PUNJAB DAIRY DEVELOPMENT BOARD vs CEPHAM MILK SPECIALITIES LTD. .

The Supreme Court upheld the Punjab and Haryana High Court's decision that the cess imposed on milk plants under the Punjab Dairy Development Board Act, 2000 was unconstitutional. The Court found that the levy was effectively a tax on licensed capacity, which the State Legislature lacked the authority to impose under any Entry in List II of Schedule VII of the Constitution of India. The Court affirmed that the levy was arbitrary and discriminatory, as it did not provide any special service to the milk plants, thus validating the High Court's quashing of the Act.