TMI Blog1998 (1) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... rted to India motor vehicles they had used abroad. They had obtained customs clearance on payment of customs and levies as due. Some of them had their vehicles registered under the Motor Vehicles Act, but had been given notice of demand of tax under the Act. In a few cases registration had not been given and they have been asked to obtain clearance from the concerned authority that tax due under the Act had been paid. The appellant in W.A. No. 1235 of 1997 is an A class contractor, who purchased a JCB 3 CX Bachoe Loader with necessary equipments manufactured in England, that he took delivery from Pondicherry, wherefore customs and other duties were paid, besides sales tax under the Pondicherry General Sales Tax Act. The appellant in W.A. No. 1466 of 1996 is also a contractor, who had purchased two excavators manufactured abroad from an agent in Pondicherry; he brought to Kerala after paying the customs and other duties including sales tax under the Pondicherry General Sales Tax Act. The question for decision is common to all these cases, which were heard together. 3.. The Kerala Tax on Entry of Goods into Local Areas Act, 1994, for short, the Act , was enacted to provide f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es registered in any Union Territory or any other State under the provisions of the Motor Vehicles Act, 1988 (Central Act 59 of 1988) prior to a period of fifteen months or more from the date on which it is registered in the State: (b) purchase value of goods on which tax has been paid in any other local area in the State. Under clause (d) of rule 2, taxable purchase value means the purchase value of the goods in respect of which an importer shall be liable to pay tax under the Act and total purchase value means the aggregate of the purchase value of all the goods imported into the local area, whether the whole or any portion of the purchase value is or is not liable to tax under the Act. [vide clause (e) of rule 2]. 3.. A division Bench of this Court held in Rajan v. State of Kerala 1995 (2) KLT 369 that the Act is intra vires the powers of the State, which is competent to impose tax for entry of goods into local areas, which is not violative of articles 301 and 304 of the Constitution. The decision has become final and has rightly been so accepted by counsel for the appellants. The question raised in these appeals had not been dealt with in the above decision, but befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle. 4.. In the Statement of Objects and Reasons for the enactment, it was said that: The State is a loser of sales tax on motor vehicles which are purchased from outside the State and brought into the State. In order to curb the evasion of sales tax on motor vehicles purchased from outside the State and brought into the State, Government have decided to levy a tax on entry of such motor vehicles into the State, either for use or sale, which are liable for registration in the State under the Motor Vehicles Act, 1988 (Central Act 59 of 1988). In the budget speech in the Assembly during 1994-95 in regard to new tax measures in item No. 237, it was said that the Government proposed to impose entry tax on motor vehicles in order to prevent loss of revenue on account of vehicles being purchased directly from other States . Indeed the preamble to the Act is consistent with this declaration. 5.. In interpreting an enactment the court has normally to go by its language and the words used and if any particular provision is open to more than one interpretation, the court has to choose that, which would represent the true intention of the Legislature. [See AIR 1966 SC 361 (R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd which necessitated the passing of that law was relied on. It was reiterated in State of West Bengal v. Union of India [1964] 1 SCR 371; AIR 1963 SC 1241that the Statement of Objects and Reasons accompanying a Bill, when introduced in Parliament, can be used for the limited purpose of understanding the background and the antecedent state of affairs leading up to the legislation . Similarly, in Pannalal Binjraj v. Union of India [1957] SCR 233; AIR 1957 SC 397a challenge to the validity of classification was repelled placing reliance on an affidavit filed on behalf of the Central Board of Revenue disclosing the true object of enacting the impugned provision in the Income-tax Act. 7.. As is clear from the object and reasons, the preamble and the provisions in the Act, it seeks to provide for the levy of tax on the entry of goods into local areas of the State from outside, that does not include entry from across the borders of the country. This seems to us to be clear from the several provisions we shall presently advert to. Clause (d) defines entry of goods into a local area , which means entry of goods from any place outside the State. Obviously the Legislature was aware whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as that in article 19(1)(a) and article 19(1)(g). (e) It must not also contravene the specific provisions of the Constitution which impose limitation on legislative power relating to particular matters, e.g., articles 27. 276(2), 286, 301. (f) The tax in question must be authorised by such valid law." The word tax would include any "impost" general, special or local duties. cess or fees. 9.. It was further said that under article 286: (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of,- (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade of commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng when a sale or purchase takes place in the course of import or export and says that: (1) omitted. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. The fact that the importer effects the sale through commission agents resident in another State will not alter the position if the goods are purchased on behalf of the importer and delivered direct from the foreign country into the State of the importer. 12.. It was urged that the limitations in article 286 have not been surmounted and as such the Act is inapplicable to the appellants, who had imported vehicles from abroad. These submissions seem to us to be untenable. We do not agree that there are any limitations upon the State s power to legislate, which is covered by item 52 of List II of the Seventh Schedule of the Constitution as has been correctly held. Tax is due upon entry of goods into the local areas. But however in the case of goods brought from abroad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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