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2007 (10) TMI 573 - HC - VAT and Sales TaxCompensatory tax - whether is not utilised for the purpose for which it is collected on the basis of quid pro quo? - whether the amount collected by the State Government under the provisions of section 3 of the Act and allocation of the same to various local bodies certainly is not in the ratio of the developmental works carried on for the betterment of neither the appellant nor the traders' community? Held that:- In view of the categorical findings and reasons recorded on proper appreciation of the materials produced by the State Government, it is satisfied that the collection of entry tax is a compensatory tax which has been diverted to urban local bodies to provide various services and infrastructure facilities to traders community to carry on their business activities. Therefore the levy of entry tax by the State Government in addition to various compensatory taxes and cesses is in accordance with law. Accordingly, answer the question in favour of respondents-State.
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