Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2007 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (12) TMI 429 - HC - VAT and Sales TaxConstitutional validity of sections 3 and 4 of the Andhra Pradesh Tax on Entry of Goods into Local Areas Act of 2001, together with the notifications issued thereunder challenged Held that:- For one to justify, a particular tax levied to be compensatory in nature, it is essential that there should be direct and intricate relationship between the collection of tax and its intended expenditure.Construction of roads, culverts and bridges or providing basic health care facilities or rest-houses for the transport operators on the waysides are not exclusively intended or meant for promoting any class, or even generally, the trade or commerce. Such basic and essential infrastructural facilities are also liable to be put to use by all others as well. In that respect, provision of such facilities like good motorable roads, illumination of streets or provision of parks or gardens cannot be rolled up and presented as the "specific end objectives" of the intended promotion of the interests of tradesmen or businessmen. The essential link between the infrastructure or facility or service, which is directly or even indirectly held to promote the cause of trade or commerce, is missing in them. Hence, we find ourselves not in a position to accord approval for the present impost as a compensatory tax. Therefore, clearly the impugned law amounts to impeding the freedom of movement of trade or commerce across the territory of the nation. Further, it is admitted that the procedure prescribed to obtain the sanction of the President has not been obtained prior to enacting the impugned Entry Tax Act. Therefore, no hesitation to declare the impugned levy as unconstitutional.
|