9911796707
TMI Blog2008 (4) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation (N.T.P.C.), being set up at Korba, for generation of power, requires coal in a large quantity for which initially Gevra project of the petitioner-company was conceived. The Madhya Pradesh Electricity Board (M.P.E.B) now Chhattisgarh State Electricity Board (C.S.E.B) is another bulk purchaser of the coal. As per the pleadings in W.P. No. 4024 of 1999, there were written agreements for supply of coal with N.T.P.C. and M.P.E.B. The coal mines are nationalized and supply of coal is regulated by the Central Government. The method is that the industries requiring coal in their factories, for supply of coal, have to apply to linkage-committee constituted for the purpose of allotment of coal. The linkage-committee sets out programme periodically for allotment of coal for their consumption in their industries from specified area/collieries. The smaller consumers of coal apply for allotment of coal to the area headquarters of the petitioner(s) which issues permits for coal, sold to them. The permit/delivery orders specify the colliery, quantity of coal, grade of coal and the name and address of the consumer. Such small consumers bring their own trucks and take delivery of the coa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure P14 and the recovery notice filed as annexure P15. Likewise, W.P. No. 433 of 2001 has been filed for quashing of the re-assessment proceedings pertaining to the years 1990-91, 1991-92, 1992-93 and 1993-94 along with quashment of the order levying penalty vide annexures P11, P12, P13, P14 and P15; whereas W.P. No. 513 of 2001 has been filed for quashing of the order of assessment and demand notice levying the entry tax on the petitioner for supply of coal by it pertaining to the year 1996-97. The contention of learned Senior Counsel for the petitioner(s) is that the authorities erred in law while holding the petitioner(s) responsible to pay entry tax on coal sold to various parties under prior agreement, allotment orders and delivery orders showing the places of destinations where the coal was to be consumed which shows that the coal was not to be utilized for consumption, use or sale in the local area, for which the petitioner(s) was held to be responsible to pay entry tax. He further contended that the respondents erred in law in holding that since there is an entry into a different local area in the course of journey from the colliery to the place of purchasers, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch goods: Provided that... (only relevant portion quoted). A bare perusal of the provisions of the Act would show that the entry tax is a tax on entry of goods into a local area for consumption, use or sale in the course of business of a dealer. This tax is not a tax on sale or purchase of goods which is provided in general sales tax (GST). The key word used in clause (a) of sub-section (1) of section 3 is "therein" which clearly shows that for the purpose of imposition of entry tax, the goods must have entered into the local area of the concerned authority for the purpose of consumption, use or sale in that particular area. In the matter of Burmah-Shell Oil Storage and Distributing Co. of India Ltd., Belgaum v. Belgaum Borough Municipality, Belgaum AIR 1963 SC 906, a similar question arose for consideration before the Supreme Court as to whether the Burmah-Shell Company was liable to octroi in respect of goods which it brought into the municipal area but which were re-exported thereafter. In such case, the apex court held that octroi was always understood to be on goods brought for consumption, use or sale and the company was liable to pay octroi tax on goods brought into local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons does indicate that they have read the words 'sale therein' occurring in entry 52 of List II as meaning 'a sale of goods within a local area for consumption or use therein'-though as a matter of fact, in a given case, the goods may be taken out and consumed there. The decisions clearly say that where the goods are sold within a local area for the purpose of being taken out of that local area and are actually taken out, no levy is permissible under entry 52. It is not possible to distinguish the said decisions on the grounds suggested by the appellant. Besides, octroi or any impost in the nature of that impost has always been looked upon with certain amount of disfavour. Acceptance of the State's contention in this case would ultimately result in driving up the price of these goods to the consumer. It would become another sales tax in effect." Therefore, on the above principles laid down by the apex court in various decisions, it is apparent that the liability to pay entry tax under section 3(1) of the Entry Tax Act only arises on entry of goods in the course of business of a dealer into a local area for consumption, use or sale therein. This provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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