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TMI Blog2010 (8) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 3B provides that the Government may, by notification, specify the manner and appoint the competent authority, to collect entry tax in respect of Indian-made foreign liquor and beer on such terms and conditions as may be specified therein. The petitioners submit that there has been no notification specifying the manner and the appointment of competent authority to collect entry tax in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dealers who are liable to pay VAT has been filed with the additional return. Liability is covered under section 3(1). Section 3B is only a machinery provision. Machinery for recovery of entry tax is already provided in section 14 of the Entry Tax Act. Shri Sumit Nema and Shri S.D. Mishra, learned counsel appearing for the petitioners, have submitted that section 3B is a special provision with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 outside the State for consumption, or use but which have been disposed of in any other manner; (iv) in respect of goods exempted from entry tax under section 10; and if tax on the entry of any goods specified in Schedule II or Schedule III effected during any period has been deposited by a dealer into the Government treasury and subsequent to such entry the goods are disposed of in the manner described in clause (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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 business for the purpose of consumption, use or sale therein. What is emphasised by Shri Sumit Nema, learned counsel appearing for the petitioners, is that section 3(1) has twin requirements. Requirement is also that "and such tax shall be paid by every dealer liable to tax under the VAT Act who has effected entry of such goods". The learned counsel has submitted that turnover of tax-free goods cannot be taken into considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover 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 of the person from whom the tax had to be realised and not of goods which could be subjected to the levy. The tax being on the entry of goods, the taxing event was complete once sugar was brought into the local area by a dealer in the course of business for consumption, use or sale therein. There was no further condition that such goods should have been liable to tax under the Sales Tax Act. Tax under section 3 of the Entry Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 II. The tax being on entry of goods the taxing event was complete once sugar was brought into the local area by a dealer in course of business for consumption, use or sale therein. This could not be diluted or negatived by subjecting it to another condition that such goods should have been liable to tax under the Sales Tax Act. That would be misreading of section 3. The charge or incidence of tax is different from realisation of it. A levy may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 provisions. Non obstante clause which has been referred to in Govind Saran Ganga Saran [1985] 60 STC 1 (SC); [1985] 155 ITR 144 (SC) had different object to be achieved. The necessary ingredients for charging the tax are three, as reiterated in Mathuram Agrawal v. State of Madhya Pradesh [1999] 8 SCC 667. Their Lordships have laid down thus: "12. . . . The statute should clearly and unambiguously convey the three components of the tax law, i.e., the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 apex court has laid down thus (at page 299 of ITR): "10. . . . The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus, the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise, one would be driven to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z 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 ratio applies to the construction of the non obstante provision contained in section 26 of the Act with reference to all the other provisions of the Act that preceded the same." Shri Sumit Nema, has relied upon the decision in Union of India v. G. M. Kokil AIR 1984 SC 1022, in which effect of non obstante clause has been considered by the apex court thus: "10. . . Thus the non obstante clause in section 70, namely, 'notwithstanding anything in that Act' must mean notw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising 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 by enacting special procedure for collection of entry tax on foreign liquor, it is open to the State to recover as per general procedure prescribed in section 14. We do not find any legal impediment for applicability of the provision of section 14 as under section 3B no notification to the contrary or otherwise has been issued by the State Government so as to override the procedure provided in section 14. When something is required to be done so as to bring the non obstante clause into pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. However, in the instant case section 14 lays down the general procedure for collection of entry tax. In the absence of notification, the procedure prescribed under section 14 can be resorted to. Shri Sumit Nema has further submitted that section 3B cannot be rendered otiose in case section 14 is resorted to as machinery provision. As no steps have been taken by the State Government by issuance of notification under section 3B by providing special machinery for recovery, special terms and conditions, manner and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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