TMI Blog2010 (8) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are also challenging the demand of entry tax from them. The prayer has also been made to collect it from the retailers not from the petitioners. Facts are being referred to from W.P. No. 8670 of 2007. The petitioners are involved in bottling and supplying beer and Indian-made foreign liquor to State Government warehouses. They are holding licences under the Madhya Pradesh Excise Act to manufacture and supply beer and Indianmade foreign liquor. NOC has to be issued for transporting the foreign liquor to the warehouses by the officer in-charge posted at the factory. The sales are made by the warehouse in-charge to the authorised retailers who are also licence holders for retail selling of the said Indian-made foreignliquor and beer. Various licences are issued for production of different kinds of foreign liquors. Sale is made by the Government to the retailers. Two per cent entry tax has to be paid by Government warehouse and can be recovered from retailer and to be deposited to State Treasury. Section 3B has been inserted in the Madhya Pradesh Entry Tax Act, 1976 by way of Madhya Pradesh Entry Tax (Amendment) Act No. 9 of 2007. It is effective from April 1, 2007. Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing out the various purposes of the Act. The Madhya Pradesh Foreign Liquor Rules, 1996, makes it clear that the State Government neither purchases nor sells the liquor, hence liability to pay the tax is that of the petitioners. Liquor is only kept in the warehouses under the supervision. There is no purchase by the Department of the liquor from the petitioners. Department charges eight per cent as supervision charges which is now called, transportation fee as per clause 13.2 of Notification (R2) dated January 15, 2008. The entry tax is payable by the person who causes entry of liquor into the local area. The petitioners cause entry of liquor into the local area, hence they are liable to make the payment of entry tax as the entry of goods is caused into the local area by the petitioner for consumption, use or sale. However for the subsequent years, the entry tax has been exempted on foreign liquor. No case for interference is made out in the writ petitions. An additional return has been filed by the respondents contending that section 3 carves out the incidence of taxation and as per the provisions of section 3 all the petitioners are under liability to pay VAT and the list of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to appreciate the rival submissions, it is necessary to consider the provisions of sections 3(1), 3B and 14 of the Entry Tax Act: 3. Incidence of taxation. (1) There shall be levied an entry tax, (a) on the entry in the course of business of a dealer of goods specified in Schedule II, into each local area for consumption, use or sale therein; and (b) on the entry in the course of business of a dealer of goods specified in Schedule III, into each local area for consumption or use of such goods but not for sale therein; and such tax shall be paid by every dealer liable to tax under the VAT Act who has effected entry of such goods: Provided that no tax under this sub-section shall be levied, (i) in respect of goods specified in Schedule II other than the local goods, purchased from a registered dealer on which entry tax is payable or paid by the selling registered dealer; (ii) in respect of goods specified in Schedule II which after entry into a local area are sold outside the State or in the course of interState trade or commerce or in the course of export out of the territory of India; (iii) in respect of goods specified in Schedule III imported from out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities for the time being empowered to assess, reassess, collect and enforce payment of any tax under the VAT Act shall assess, reassess, collect and enforce the payment of entry tax including any penalty payable by a dealer under this Act as if the tax or penalty payable by such dealer under this Act or under the provisions of the VAT Act as made applicable under section 13 to dealers in relation to tax levied under this Act is a tax or penalty payable under that Act and for this purpose they may exercise all or any of the powers conferred upon them by or under that Act. It is apparent from section 3(1) of the Entry Tax Act that entry tax is leviable from a dealer on the entry of the goods specified in Schedule II into such local area for consumption, use or sale therein as provided in section 3(1)(a). The petitioners are dealers as defined in section 2(i) of the VAT Act, is not in dispute. The definition of dealer in section 2(i) is wide and covers the petitioners in its ambit. It is also not in dispute that goods are beer and Indian-made foreign liquor, specified in Schedule II of the Entry Tax Act and entry is also caused in the local area in the course of busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be prescribed for different category of dealers. (2) Every dealer to whom sub-section (1) does not apply shall be liable to pay tax under this Act in respect of sales or supplies of goods effected by him in Madhya Pradesh with effect from the date on which his turnover in a year first exceeds the limit prescribed under the said sub-section but for the purpose of assessment of the tax for that year, only so much of his turnover as is in excess of such limit, shall be taken into consideration. In our opinion turnover under section 5 has to be worked out as per section 2(z) of the M.P. VAT Act. In our opinion section 3 of the Entry Tax Act is the charging provision. Section 3B and section 14 are machinery provisions. Taxable event is the entry of goods into the local area by the dealer in the course of business. In Bhagatram Rajeev Kumar v. Commissioner of Sales Tax, Madhya Pradesh [1995] 96 STC 654 (SC), their Lordships held that liability to pay sales tax on the goods specified in Schedule II was not an essential ingredient of the levy. The expression liable to tax in section 3 was used to identify the person who was liable to pay the entry tax. It was determinative o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business whose turnover is not less than Rs. 1,000 annually and not by any other person. In other words, the tax is leviable on all goods specified in Schedule II brought for consumption, use or sale; but it shall be realised only from those persons who are dealers registered under the Sales Tax Act and are liable to pay tax. The expression 'liability to tax' is determinative of the person from whom the tax shall be realised and not of the goods which could be subjected to levy. The construction suggested by the learned counsel for the appellant militates against the clear language of the section as the levy being on goods specified in Schedule II if the submission is accepted then it would result in non-levy on those items on which additional excise duty is leviable. That goods were brought by the appellants who are dealers in course of business for consumption, use or sale therein, was not disputed. Nor it is disputed that they are liable to pay tax under the Sales Tax Act. If that be so, then there appears no escape from the conclusion that they are liable to pay entry tax under this section. The appellants claim to be dealers of sugar which is specified in Schedule I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5] 155 ITR 144 (SC), in which the apex court has laid down the components which enter into concept of tax; first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, second is clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, third is the rate at which the tax is imposed and the fourth is the measure or value to which rate will be applied for computing the tax liability. Section 3 read with Second Schedule of the Entry Tax Act clears the aforesaid test, it culls out with specification when entry tax is liable to be paid, the event is the entry into the local area for the purpose mentioned in the said provision. The person by whom the tax is payable and upon whom the levy is imposed, has also been clearly mentioned. The rate has been specified in Schedule II to the Entry Tax Act along with measure or value. The value of the goods has been defined in section 2(l) of the Entry Tax Act in relation to a dealer or any person who causes entry of goods into the local area. We find that by prescribing rate of two per cent, reference is to the value of the goods. There is no ambiguity in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment Co. Ltd. [1957] 32 ITR 180, it has been laid down that if the Revenue satisfies the court that a case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or analogy or by trying to probe into the intentions of the Legislature and by considering what was the substance of the matter. In our opinion, provision of section 3 is clear and recovery is within four corners of law. Shri Sumit Nema, learned counsel, has placed reliance on a decision of the apex court in Commissioner of Income-tax, Bangalore v. B.C. Srinivasa Setty [1981] 128 ITR 294; AIR 1981 SC 972 to contend that even assuming that the provision of section 3B is taken to be computing provision, it would not be possible to determine the tax payable, thus charging section 3 is wholly dependent upon notification to be issued under section 3B as to the manner of collection of tax, competent authority to collect it and for terms and conditions. In Commissioner of Income-tax, Bangalore v. B.C. Srinivasa Setty [1981] 128 ITR 294; AIR 1981 SC 972, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on other items under the said provision. The apex court in A.V. Fernandez v. State of Kerala [1957] 8 STC 561; AIR 1957 SC 657 on consideration of its previous decision in Aswini Kumar Ghose v. Arabinda Bose [1953] SCR 1 at page 21 has observed that effect of non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment. The apex court in A.V. Fernandez v. State of Kerala [1957] 8 STC 561; AIR 1957 SC 657 has held thus (at page 572 of STC): 36. What then, is the effect of this non obstante provision? This court in Aswini Kumar Ghosh v. Arabinda Bose [1953] SCR 1 at pages 21 and 22; AIR 1952 SC 369 at page 376(E), made the following observations in connection with the non obstante clause: 'It should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment.' The same r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Aswini Kumar Ghose v. Arabinda Bose AIR 1952 SC 369, Patanjali Sastri, J. observed: 'The enacting part of a statute must, where it is clear, be taken to control the non obstante clause where both cannot be read harmoniously'. In Maharajadhiraja Madhav Rao Sivaji Rao Scindia Bahadur v. Union of India [1971] 1 SCC 85 (at 139); AIR 1971 SC 530, Hidayatullah, C.J. observed that the non obstante clause is no doubt a very potent clause intended to exclude every consideration arising from other provisions of the same statute or other statute but 'for that reason alone we must determine the scope' of that provision strictly. When the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. 'A search has, therefore, to be made with a view to determining which provision answers the description and which does not'. In our opinion, as section 14 deals with the assessment and collection of entry tax and State has chosen not to issue notification under section 3B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48L was also invalid. The application of the respondents was thus allowed by the Tribunal by the order under challenge. . . . 8.. A perusal of the definition clause and Explanation 1 shows that there is no ambiguity in them. The requirements of the Explanation are clear enough. Not providing any pro forma for declaring particulars under the explanation would neither make it vague nor unworkable for want of any machinery provision. It cannot be disputed that a prescribed pro forma would have been appropriate but absence of a pro forma for making the required declaration would not warrant suspension of the said Explanation. We find no substance in the reasoning of the Tribunal and therefore set aside the finding of the Tribunal in regard to Explanation 1. Shri Sumit Nema has also relied upon the decision of the apex court in Subhash Ramkumar Bind @ Vakil v. State of Maharashtra AIR 2003 SC 269 to contend that when notification is required to be issued, it has to be issued in official gazette, administrative instructions cannot be a substitute for a notification. There is no dispute with the aforesaid proposition. Notification has to be issued in official gazette. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
