The petition was admitted by a three-judge bench comprising Justice S C Agrawal, Justice S Saghir Ahmed and Justice M Srinivasan after hearing brief arguments.

Ravi Prakash Gupta, counsel for the petitioner, Messers Jaiprakash Industries Ltd., had submitted before the court that Parliament did not have any power under the union list or the concurrent list to impose such a tax which was exclusively covered by entry 56 of the state list, empowering the states to impose tax on freight charges on transport of goods by road.

The Union government could charge tax only in respect of freight charges on account of transportation by air and sea, he said.