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2018 (5) TMI 652 - HC - VAT and Sales TaxEntry tax - scope of State - Whether the entire State can be treated as 'local area' for the purposes of entry tax? - Whether entry tax can be levied on the goods which are directly imported from other countries and brought in a particular State? - Whether the benefits given to certain categories of manufacturers would amount to discrimination under Section 304? Held that: - The contention that the impugned Act was not covered under Entry 52 List II since Entry 52 is in essence power of local bodies to levy octroi and thus State legislature had no legislative competence to impose entry tax, is no more res-integra, having been repelled by the Supreme Court in Fr. Williams [2017 (10) TMI 491 - SUPREME COURT OF INDIA]. The contention that the entire State cannot be treated as one local area, is devoid of any merit, as the definition clause of local area under Section 2 (d) did not treat the entire State as one local area. The other provisions of the Act also do not amount to treating the entire State as one local area vis-a-vis the taxable event and merely because the tax is collected as general revenue and credited to a central fund would not result in altering the taxable event nor would be fatal to the vires of the Act. Thus, the first question framed for consideration by the Supreme Court, does not directly arise in the context of the provisions of the impugned Act. The contention that the entry tax is a local levy, the power of a local body to impose such tax and the State Government was not competent to realise entry tax as general revenue or to direct the same being credited to a central fund or its appropriation for facilitating trade, commerce and industry in the entire State, rather than passing it to the local body from where the tax had been collected, is based on a wrong premise that the entry tax is a local levy and not the power of the State Government to impose tax. None of the provisions of the Act suffer from the vice of excessive delegation of power as sought to be contended on behalf of the petitioners. The provisions of the Act relating to reversal of levy of tax (Section 5), rebate (Section 6) and exemption (Section 7) are neither violative of Article 14 nor Article 304 (a). The rebate and exemption notifications, which have been challenged, also pass muster of Article 14 and Article 304 (a). The doctrine of unbroken package having been abandoned by Courts in the United States where the doctrine was propounded and no more followed by the Supreme Court would not come to the rescue of IOC in contending that crude oil could not be subjected to entry tax in course of its transportation to Mathura Refinery through the underground pipelines - goods which are directly imported from other country could, in a given case, be subject matter of entry tax. Section 12 of the Act was only a machinery provision to facilitate collection of tax and prevent its evasion. It was neither illegal nor arbitrary nor resulted in shifting the liability of the person who in fact was liable under the Act nor the taxable event. Petition dismissed.
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