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2007 (1) TMI 514 - ALLAHABAD HIGH COURTConstitutional validity of the U.P. Tax on Entry of Goods Act, 2000 ("the Act") - entry tax levied on crude oil imported - whether the "entry tax" is "compensatory tax" - violative of articles 301 and 304, Constitution of India - HELD THAT:- It is to be appreciated that we are not called upon to adjudicate or define parameters of "compensatory tax" or vires of the "Act", which is outside the scope of the "issue" remitted to High Court vide Supreme Court judgment and order dated July 14, 2006(1) whereunder High Court/s, after affording opportunity to the parties to furnish relevant data (to discharge its "burden") decide nature of "entry tax", i.e., whether the "tax" under the Act, is "compensatory" in nature. Undisputedly it is to be done on the parameters/touchstone laid down by the apex court in the case of Jindal Stainless Ltd.[2006 (4) TMI 120 - SUPREME COURT]. It is clear from the perusal of documents annexed with the affidavit of Amitabh Mishra that the amount of revenue earned from "entry tax" under the Act is pooled in the "consolidated fund"—which is utilised under budgetary-allocation to the States, which is also utilised as "grant-in-aid" by "State" to make up budgetary deficit of a local body to discharge their statutory/constitutional obligations—which apart from others include construction of roads, bridges, etc. The respondents have placed figures relating to the "funds" given as "grant-in-aid" to panchayats/local bodies from "consolidation fund"—as part of its share received by State of U.P. There is, therefore, no occasion for us to probe reasonableness or proportionality of the same in the instant case. "Aims and objects" of the Act, even though not decisive as held by the Supreme Court, merely refer "to augment revenue of the State " and hence support the contention of the petitioners that "tax" under it is not compensatory in nature. The State has failed to pin-point or establish through its data, the specific/additional service/facility provided to its tax-payer(s). It is obvious that the apex court remitted the issue of "compensatory tax" (after parties are given opportunity to file "data" to discharge their burden) apparently for the reason that it found "aims and object" of the Act irrelevant and none of the provisions of the Act (including its sections 4, 4-A and 6 read with the Schedule) reflect that the amount of "entry tax" is to provide "additional " or "specific" facility to the scheduled trades visa-vis those who are not subjected to this "tax". There is no co-relation between the "levy of entry tax" and the "scheduled trades". Finding There is not even an iota of evidence/material on record to give required data/statistics to prove/establish that the amount collected as "tax" and its expenditure on providing additional/specific advantage/facility provided to trade/s in particular mentioned under the Schedule of the Act. In absence of such a data it is not possible for this court to hold that "entry tax" is "compensatory tax". We hold accordingly. In the nature of the case we make no order as to costs.
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