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2016 (5) TMI 828 - CHHATTISGARH HIGH COURT

2016 (5) TMI 828 - CHHATTISGARH HIGH COURT - [2016] 92 VST 97 (CG) - Whether the Entry Tax under the provisions of the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 can be levied upon the goods brought into railway area where the petitioners are carrying on their trade and business - Held that:- submission of petitioners that they are not liable for payment of entry tax is liable to be rejected as Article 285 of the Constitution of India only applies if the property is .....

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to the local area and entry tax cannot be called as a tax directly imposed upon the income or property of the Union as taxable event under the Orissa Entry Tax Act, 1999 is on the entry of scheduled goods into the local area and not on the goods itself. Therefore, the petitioners are not exempted from payment of entry tax by virtue of the provisions contained in sub-section (1) of Section 184 of the Railways Act, 1989. - Decided against the petitioner - Writ Petition (T) No. 87 of 2014 - Dated:- .....

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question of law arises for consideration on the following factual matrix: - 2.1) Petitioner No.1 is a registered society having 15 members and other petitioners are carrying-on their business in the railway area at Bilaspur as their shops are situated within the railway area. They are carrying-on the business and registered under the Central and State Commercial Taxes Acts. They have filed this writ petition stating inter alia that they are carrying-on their business in the area which falls with .....

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imposed on the petitioners are liable to be quashed. 2.2) The State/respondents No.1, 3 and 4 have filed return opposing the writ petition stating inter alia that by virtue of Section 3 of the Act of 1976, goods brought by any of the dealers into the local area for consumption, use or sale therein, entry tax would be chargeable. It has been stated that the taxable event will be the entry of goods into a local area which will occasion the levy of entry tax. Indirect tax is distinguishable from di .....

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rned counsel appearing for the petitioners, would submit that by virtue of the definitions contained in sub-sections (31) and (32A) of Section 2 of the Railways Act, 1989, the definition of railway has been defined and therefore, railway area is not included in subsections (d) and (e) of the Act of 1976, as such, no entry tax can be charged for the goods brought into the railway area, as entry tax under Section 2(b) of the Act of 1976 can be levied upon entry of goods into the local area. Mr. Ko .....

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ate/respondents No.1, 3 and 4, would submit that the writ petition as framed and filed is not maintainable in law, as the order Annexure P-3 passed by the Commercial Tax Officer is an appealable order and the order Annexure P-4 passed under the provisions of the Commercial Tax Act and the Value Added Tax Act is also appealable or revisable and therefore the writ petition as framed and filed is not maintainable. He would further submit that Article 285 of the Constitution of India is not attracte .....

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l area whereas, Article 285 of the Constitution of India is applicable to direct tax. He would also submit that Section 184(1) of the Railways Act, 1989 is also not at all attracted, as entry tax leviable under Section 3 of the Act of 1976 is upon the dealer and not upon the railway administration. Therefore, the writ petition deserves to be dismissed. 5. Mr. Abhishek Sinha, learned counsel appearing for the Union of India / respondents No.6 and 7, would submit that in the instant case, impositi .....

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7. In order to consider the arguments raised at the Bar, it would be appropriate to notice clause (1) of Article 285 of the Constitution of India which reads as follows: - 285. Exemption of property of the Union from State taxation.-(1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. 8. On a careful perusal of the above-stated provision, it would appear that the property of .....

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tioners that the petitioners are not liable for payment of entry tax is liable to be rejected as Article 285 of the Constitution of India only applies if the property is of the Union of India and the tax is directly imposed. Here, entry tax has been imposed under the Act of 1976 on the entry of goods into the local area for consumption, use or sale by the petitioners who are said to be dealers under the Act of 1976. 10. In the matter of Senior Divisional Mechanical Engineer v. State of Orissa an .....

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of the Union as taxable event under the Orissa Entry Tax Act, 1999 is on the entry of scheduled goods into the local area and not on the goods itself. The Supreme Court reiterating the earlier judgment rendered in the Presidential Reference AIR 1963 SC 1760 and further relying upon the decision rendered in the case of N.D.M.C. v. State of Punjab and others 1997 (7) SCC 339 has categorically held that there is a difference between direct tax on property and on income as against indirect tax on m .....

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esent judgment with subsequent judgments. Suffice it to state that there is a difference between direct tax on property and on income as against indirect tax on manufacture of goods or entry of goods into the local area or sales tax. This dichotomy needs to be kept in mind of Constitutional Scheme and Article 285 and 289 of the Constitution. In our view, the afore-stated judgment of this Court in Presidential Reference and in NDMC's Case (supra) squarely applies to the facts of the present c .....

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e Railways Act, 1989. He submits that by virtue of the provisions contained in sub-section (1) of Section 184 of the Railways Act, 1989, the petitioners who are carrying-on their business and trade in the railway area are not subjected to any tax. On the contrary, Mr. Praful Bharat, learned Additional Advocate General, would submit that Section 184(1) of the Act of 1989 is meant for railway administration and Section 184(1) of the Railways Act, 1989 is not applicable to the petitioners. Mr. Bhar .....

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d in the context of Article 285 of the Constitution and is required to be understood as any tax on property or income as a direct tax, and observed as under: - A bare reading of these two provisions quoted above, indicates the difference between the chargeability on one hand and collection and distribution of tax on the other hand. On reading the provisions of 1999 Act it is clear that Octroi Duty was levied by the Municipalities under the local enactments. In the present cases that local enactm .....

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