TMI Blog2013 (9) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... oner : Nishant Mishra, Bharat Ji Agrawal For the Respondent : C. S. C. ORDER 1. We have heard Shri Bharat Ji Agrawal, Senior Counsel assisted by Shri Nishant Mishra. Shri C.B. Tripathi, Standing Counsel appears for the State respondents. 2. By this writ petition the petitioner has prayed for following reliefs:- "A. Issue a writ, order or direction declaring clause (iv) of the proviso to Section 2 (h) of U.P. Tax on Entry of Goods into Local Areas Act, 2007, to the extent refers to whole sale price in the market, in cases such as stock transfer where value of goods is clearly ascertainable, verifiable and worthy of credence in excess of the legislative competent of the State Government, hence ultra-vires the Constitution. B. Issue a writ, order or direction in the nature of certiorari quashing the assessment order dated 14.2.2013 (Annexure-5 to the writ petition) passed by the Respondent no.3, to the extent it imposes entry tax on the market value of goods; C. Issue any other writ, order or direction which this Hon'ble Court deems fit in the facts and circumstances of the case. D. Award costs of the petition to the petitioner." 3. Brief facts giving rise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst public interest. The levy of entry tax under the Act, therefore, does not violate the freedom of trade, commerce and intercourse guaranteed under Art.301 of the Constitution of India. Section 17 of the Act validating the amount of entry tax levied, assessed, realized and collected under the U.P. Tax on Entry of Goods Act, 2000, is also valid and authorises the State to keep the entire amount, for the purposes of its utilisation for facilitating trade, commerce and intercourse in the local areas of the State. 151. We may observe by way of clarification that in these writ petitions we have confined our enquiry to the constitutional validity of the U.P. Tax on Entry of Goods into Local Areas Act, 2007, and whether the entry tax is compensatory in nature, which does not violate the freedom of trade, commerce and intercourse under Art.301 of the Constitution of India. We have not examined the other issues namely the validity of the notices, assessments, rebates, exemption and the liability of the traders, and manufacturers of the scheduled goods to pay entry tax. All other questions, will remain open to be considered by the competent authorities under the Act in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this writ petition as the question of might or ought to have been taken specially in view of the fact that the provisional assessment of the same year was under challenge in the previous writ petition. If the provision of any law is ultra vires the Constitution of India on the grounds of legislative competence or being violative to Part III of the Constitution of India, it can be challenged at any time irrespective of the fact whether the ground was taken in the previous writ petition or not, unless such grounds were considered and decided by the Court. In the present case, we further find that the grounds, even if they were raised, were not decided as the Court did not go into such questions vide para-151 of the judgment. The Court confined its enquiry to the constitutional validity of the Act on the grounds of violative of Article 301 and not saved by the proviso to Article 304. The other questions were left open to be considered by the Competent Authority in accordance with the law. 8. Shri Bharat Ji Agarwal submits that Section 2 (h) (iv) and Section 4 (g) are ultra vires the Constitution of India inasmuch as these provisions are beyond the legislative competence of the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase price". The contention overlooks the specific guideline to be found in the charging section itself. The taxing event is the entry of scheduled goods into a local area. The tax becomes payable on the entry of scheduled goods in a local area. Therefore, the price of the scheduled goods at the time of entry paid by the dealer who is the importer of goods within the scheduled area would be the ad valorem price on the basis of which tax would be computed. No subsequent rise or fall in price has any relevance to the computation of the tax. The charging section says that the tax shall be levied and collected on the entry of scheduled goods in a local area at specified percentage not exceeding two per cent ad valorem. Therefore, the price of the scheduled goods at the time when the tax becomes chargeable irrespective of the fact that it would be computed at a later date when the dealer submits his return as required by the other provisions of the Act, would be the price for computation of tax. And there is no ambiguity or any vagueness in this behalf. There is thus specific guideline in the charging section itself for taking into account the price according to which tax would be compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not become workable unless read along with definition of "turnover" and "taxable turnover". 48. The retail price of a formulation needs determination under paragraph (7) of the order and the Government if empowered by order to fix the price in accordance with paragraph (7) of the order to be charged by a retailer. Where the maximum retail price is fixed as provided under paragraph 7 of Control Order, para 19 provides for price that can be charged from a retailer by a wholesaler, it reads as under: "19. Price of formulation sold to the dealer- (1) A manufacturer, distributor or wholesaler shall sell a formulation to a retailer, unless otherwise permitted under the provisions of this Order or any order made thereunder, at a price equal to the retail price, as specified by an order or notified by the Government (excluding excise duty, if any), minus sixteen per cent thereof in the case of scheduled drugs" Applying the principles enunciated above, the inevitable conclusion is that when the wholesaler sells any formulation to a retailer in bulk quantity, taxable event of sale of goods takes place where wholesaler and retailers are the parties to contract, the goods in question are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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