GODFREY PHILLIPS INDIA LTD. vs STATE OF U.P. .

The Supreme Court addressed the legality of luxury tax imposed on tobacco products under Entry 62 of List II of the Seventh Schedule of the Constitution. The Court held that the imposition of luxury tax by the Uttar Pradesh Tax on Luxuries Act, 1955, Andhra Pradesh Tax on Luxuries Act, 1987, and West Bengal Tax on Luxuries Act, 1994, is constitutionally valid as these statutes fall within the legislative competence of the State Legislatures. The Court clarified the definition of 'luxuries' and upheld the States' authority to levy taxes on tobacco products as luxuries.