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2007 (1) TMI 516 - HC - VAT and Sales TaxConstitutional validity of the Bihar Entry Tax Act - levy and collection of tax on entry of goods into local areas for consumption, use or sale - direction of the Supreme Court in order in Jindal Stainless Limited v. State of Haryana [2006 (4) TMI 120-SUPREME COURT] - amendments introduced in Patent Act, without the previous sanction of the President - violative of the proviso to article 304(b) - HELD THAT:- It is noted that on November 5, 2001 and again on August 22, 2003 basic and major amendments were introduced in the Act. These included (i) the change in the definition of "entry of goods", (ii) enlargement of the Schedule, and (iii) raising the maximum limit in the rate of entry tax from 5 to 20 per cent of the import value of goods. All these amendments were undeniably made without the previous sanction of the President. It is significant to note that Jyothi Home Industries[1986 (2) TMI 331 - KARNATAKA HIGH COURT] also considered in detail the Supreme Court decision in Syed Ahmed Aga [1975 (5) TMI 88 - SUPREME COURT]. The facts of the case and the nature of the amendments also appear to be very close to the case in hand. In light of all those decisions, I have no hesitation in coming to the conclusion that the amendments sought to be introduced in the Parent Act vide amending Act 10 of 2001, dated November 5, 2001 and the amending Act 9 of 2003, dated August 22, 2003 were bad and violative of article 304(b) of the Constitution for want of the Presidential sanction/assent. It is well-settled by a catena of decisions that only in case an Act is violative of article 301 of the Constitution, its validity is required to be tested with reference to article 304(b). The levy of the tax in its present form being compensatory in character, the need to satisfy the requirements of article 304(b) of the Constitution does not arise. Hence, I may summarise the conclusion as follows: (i) The levy under the Parent Act of 1993, before its amendments, was not compensatory in character and was, therefore, violative of article 301 of the Constitution. (ii) The Parent Act of 1993, before its amendments, was nevertheless saved by virtue of article 304(b) of the Constitution and the decision in Bihar Chamber of Commerce [1996 (2) TMI 430 - SUPREME COURT] to that extent remains subsisting till date. (iii) The amendments introduced in the Act by amending Acts 10 of 2001 and 9 of 2004 were bad because the former made the Act violative of article 304(a) of the Constitution and further because both the amendments were made without the previous sanction of the President. (iv) The introduction of imported goods within the definition of "entry of goods" was bad for being retrospective as also for want of the Presidential sanction/assent. (v) After the 2006 Amendment the levy under the Act acquired the nature of a compensatory tax and the Act in its present form is a valid piece of legislation. Thus, the two cases are fit to be allowed because they relate to the period 2001-2006. But I would refrain from making any order or direction in that regard since the matter is already pending before the Supreme Court. The two cases are thus disposed of as directed by the Supreme Court in Jindal Stainless Limited.
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