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State of Kerala And Others Versus FR. William Fernandez Etc. Etc.

2017 (10) TMI 491 - SUPREME COURT OF INDIA

Levy of Entry tax - goods imported from different countries and brought into local area of a State - The State legislations are also questioned on the ground that the entry tax legislations do not contemplate levy of an entry tax on goods imported from outside the country - Whether Section 2(d) read with Section 3 of Orissa Entry Tax Act, 1999, Section 2(d) read with Section 2(d) of Kerala Act, 1994 and Bihar Act, 1993 (before its amendment in 2003), never intended to levy any entry tax on the g .....

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t - The Entry tax legislations are referable to Entry 52 of List II of Seventh Schedule of the Constitution. Entry 52 also provided a legislative field, namely, 'taxes on the entries of goods into a local area for consumption, use or sale therein'. Legislation is thus concerned only with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to chargeability of entry tax - definition clause, Section 2(d) read with Section 3 does not exclud .....

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ction clearly included all goods entering into a local area. Thus, the submissions of learned counsel for the petitioners that entry tax legislation did not include imported goods cannot be accepted. - Entry 41 & 83 of List I and Entry 52 of List II - Whether Entry Tax Legislations in question intrude into exclusive legislative domain of Parliament as reserved under Entry 41 and Entry 83 List I? - Whether levy of entry tax on goods imported from outside territory of India is legislation tren .....

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usive and has been clearly demarcated. This is further clear by the fact that in List III, i.e. Concurrent List, no taxing entry is included except the entry of stamp duty & levying of fee in respect of any of the matters in List III but not including fees taken in any Court - The distribution of power between Union and States is done in a mutually exclusive manner as is reflected by precise and clear field of legislation as allocated under different list under the Seventh Schedule. No assumptio .....

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The Government of India Act, 1935 has been referred to as Constitution Act by the Privy Council - there is no clash/overlap between entry levied by the State under Entry 52 List II and the custom duty levied by the Union under Entry 83 List I. We have also arrived at the same conclusion in view of the foregoing discussions. We thus hold that entry tax legislations do not intrude in the legislative field reserved for Parliament under Entry 41 and under Entry 83 of List I. - The State Legislature .....

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eld that: - Import and export are concepts which denote trade between different countries. The term “import” signifies etymologically “to bring in”. To import goods into the territory of India means to bring them into the territory of India from abroad - The submissions of the writ petitioners on the strength of Section 5(3) that even first sale after the import should be treated during the course of the import is not supported by the concept as contained in Section 5 of the 1956 Act and the rel .....

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x by the States. - Original/Unbroken Package Theory - Whether doctrine of unbroken package as evolved by the American Court are to apply with regard to imported goods of the petitioners prohibiting the State from levying any tax till the goods are first sold/dealt by the importer? - Held that: - The Original Package/ Unbroken Package is a theory which was evolved by U.S. Supreme Court in reference to the imported goods. The genesis of the theory is from the Chief Justice Marshall, in the cas .....

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customs barriers are not immuned from any kind of State taxation, which fall equally on other similar goods and the submission of the learned counsel for the petitioner that immunity from State taxation shall continue till it reaches in the premises where it is to be taken for consumption, sale and use cannot be accepted. - Non-inclusion of Custom Duty in purchase value - Whether in the definition of purchase value as contained in Entry Tax Legislations in question, noninclusion of custom du .....

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oods, generally include the entire value including the import duty or custom duty and in any event the inclusion of 'all other charges incidental to the purchase of such goods' has to necessarily mean all charges including custom duty which is incidental to the purchase. Thus, noninclusion of custom duty specifically in definition of purchase value in 2(j) is inconsequential and cannot lead to mean that the legislature never intended to include the imported goods under the entry tax legislation .....

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the nomenclature or form of a tax is not a decisive factor to find out the nature of the tax. It is the matter of legislative policy as to how the tax is to be collected. The definition of taxation as given in Article 266 (28) that tax includes general or local tax does not in any manner support the contention of the petitioner that tax under Entry 52 is only a local tax which ought to be collected through local bodies. It is the matter of legislative policy that whether a tax is collected as a .....

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slative power of the State can be read as contended by counsel for the petitioner - Further, any pre-constitutional tax practice cannot put any fetter on Constitution farmers to define any tax, to elaborate the concept of tax or to move away or forward from any kind of earlier levy - taxes which are to be used by the local authorities can be collected by the local authorities as well as by the State Government. It is the matter of legislative policy as to how the tax is collected and distributed .....

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any substance in the submission of the learned counsel for the petitioner that entry tax legislation is not covered by Entry 52 List II. - Expression “MACHINERY AND EQUIPMENT” as used in the SCHEDULE OF ORISSA ACT 1999 - Whether a plant, imported in knocked out condition is covered by the Part II of the Schedule of Orissa Act, 1999? - Held that: - The Plant in a knocked out condition is nothing but a collection of machineries. The plant being a wide term including machinery also, we fail to .....

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ule of the Orissa Act, 1999. - CIVIL APPEAL NOS. 3381-3400 OF 1998 - Dated:- 9-10-2017 - Mr. A.K. Sikri And Mr. Ashok Bhushan JJ. T.C.(C) No. 149/2013, C.A. No. 3720-3722/2003, C.A.No. 15957 of 2017 @ SLP(C) No. 6831/2008, C.A.No.15958 of 2017 @ SLP(C) No.7914/2008, C.A.No.15959 of 2017 @ SLP(C) No.8204/2008, C.A.No. 15960 of 2017 @ SLP(C) No.9227/2008, C.A.Nos. 15961-62 of 2017 @ SLP(C) No.12424-12425/2008, C.A. No. 15963 of 2017 @ SLP(C) No.15161/2008, C.A.No. 15964 of 2017 @ SLP(C) No.15540/2 .....

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C) No.15495/2008, C.A. No. 15979 of 2017 @ SLP(C) No.15934/2008, C.A. No. 15980 of 2017 @ SLP(C) No.15647/2008, C.A. No. 15981 of 2017 @ SLP(C) No. 16930/2008, C.A. No. 15982 of 2017 @ SLP(C) No.15496/2008, C.A. No. 15983 of 2017 @ SLP(C) No.15491/2008, C.A. No. 15984 of 2017 @ SLP(C) No.16865/2008, C.A. No. 15985 of 2017 @ SLP(C) No.18346/2008, C.A. No. 15986 of 2017 @ SLP(C) No.15356/2008, C.A. No. 15988 of 2017 @ SLP(C) No.15492/2008, C.A. No. 15989 of 2017 @ SLP(C) No.15845/2008, C.A. No. 15 .....

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, C.A. No. 16001 of 2017 @ SLP(C) No.17193/2008, C.A. No. 16002 of 2017 @SLP(C) No.18379/2008, C.A. No. 16003 of 2017 @ SLP(C) No.18344/2008, C.A. No. 16004 of 2017 @ SLP(C) No.16667/2008, C.A. No. 16005 of 2017 @SLP(C) No.18354/2008, C.A. No. 16006 of 2017 @ SLP(C) No.17233/2008, C.A. No. 16007 of 2017 @ SLP(C) No.17203/2008, C.A. No. 16008 of 2017 @SLP(C) No.15711/2008, C.A. No. 16009 of 2017 @ SLP(C) No.15618/2008, C.A. No. 16010 of 2017 @SLP(C) No.16664/2008, C.A. No. 16011 of 2017 @SLP(C) N .....

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f 2017 @ SLP(C) NOs.18360-64/2008, C.A. No. 16037 of 2017 @ SLP(C) No. 22083/2008, C.A. No. 16038 of 2017 @SLP(C) No.22735/2008, C.A. No. 16040 of 2017 @ SLP(C) No.22086/2008, 16039 @ SLP(C) No.21819/2008, C.A. No. 16042 of 2017 @ SLP(C) No.18405/2008, C.A. No. 16043 of 2017 @SLP(C) No.23075/2008, C.A. No. 16045 of 2017 @ SLP(C) No.23609/2008, C.A. No. 16047 of 2017 @ SLP(C) No.22707/2008, C.A. No. 16049 of 2017 @SLP(C) No.21107/2008, C.A. No. 16050 of 2017 @SLP(C) No.22931/2008, C.A. No. 16051 .....

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77/2008, C.A. No. 16073 of 2017 @SLP(C) No.26377/2008, C.A. No. 16075 of 2017 @ SLP(C) No.26593/2008, C.A. No. 16080 of 2017 @ SLP(C) No.29764/2008, C.A. No. 16082 of 2017 @SLP(C) No.29763/2008, C.A. No. 16084 of 2017 @ SLP(C) No.3276/2009, C.A. No. 16085 of 2017 @ SLP(C) No.29194/2008, C.A. No. 16087 of 2017 @SLP(C) No.29196/2008, C.A. No. 16089 of 2017 @ SLP(C) No.9548/2009, C.A. No. 16092 of 2017 @ SLP(C) No. 25467/2009,C.A. No.2042/2011, C.A. No. 16094 of 2017 @ SLP(C) No.6762/2010, C.A. No. .....

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No.3387/2010, C.A. No. 16106 of 2017 @ SLP(C) No.4572/2010, C.A. No. 16107 of 2017 @ SLP(C) No.7929/2010, C.A. No. 16108 of 2017 @SLP(C) No.9022/2010, C.A. No. 16109 of 2017 @ SLP(C) No.9077/2010, C.A. No. 16110 of 2017 @ SLP(C) No.9723/2010, C.A. No. 16120 of 2017 @SLP(C) No.36486/2010, C.A. No. 16112 of 2017 @ SLP(C) No.9702/2010, C.A. No. 16113 of 2017 @ SLP(C) No.10361/2010, C.A. No. 16114 of 2017 @SLP(C) No.14886/2010, C.A. No. 16115 of 2017 @ SLP(C) No.16694/2010, C.A. No. 16116 of 2017 @ .....

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0147/2012, C.A. No. 16016 of 2017@ SLP(C) No.36187/2012, C.A. No. 16017 of 2017@SLP(C) No.40146/2012, C.A. No. 16020 of 2017@ SLP(C) No.37455/2012,C.A. No. 9293/2012, C.A. No. 16022 of 2017@ SLP(C) No.37728/2012, C.A. No. 16024-25 of 2017@ SLP(C) No.37708-37709/2012, C.A. No. 16028 of 2017@SLP(C) No.38304/2012, C.A. No. 16034 of 2017@ SLP(C) No.38919/2012, C.A. No. 16036 of 2017@ SLP(C) No.449/2013, C.A. No. 16041 of 2017@ SLP(C) No.1426/2013, C.A. No. 16044 of 2017@ SLP(C) No.8939/2013, C.A. No .....

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54/2012, C.A. No. 16083 of 2017@ SLP(C) No.29119/2014, C.A. No. 16086 of 2017@SLP(C) No.22349/2015, C.A. No. 16088 of 2017@SLP(C) No.72/2016, C.A. No. 16090 of 2017@ SLP(C) No.2057/2016, C.A. No. 16091 of 2017@SLP(C) No.86/2016, C.A. No. 16093 of 2017@SLP(C) No.16820/2016, C.A. No. 16029-33 of 2017@ SLP(C) No.18360-18364/2008, C.A. No. 16077-79 of 2017@SLP(C) Nos.27442-27444/2008, C.A. No. 16066-68 of 2017@SLP(C) Nos. 16744-16746/2013, C.A. No. 16111 @SLP(C) No.11419/2010, C.A. No.3026 of 2012, .....

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of 2017@SLP(C) No.11646/2009 & C.A. No. 16155 of 2017@SLP(C) No.7356/2010 & C.A. No. 16163 of 2017@SLP(C) No.1101/2007. For the Appellant : Mr. Dinesh Kumar Garg, AOR Mr. Ginny J. Rautray, Adv. Ms. Kanchan Kaur Dhodi, AOR Ms. Vanita Bhargava, Adv. Mr. Ajay Bhargava, Adv. Ms. Abhisaar Bairagi, Adv. M/s. Khaitan & Co., AOR Mr. G. Prakash, AOR Mr. Jishnu M.L. Adv. Ms. Priyanka Prakash, Adv. Ms. Beena Prakash, Adv. Mr. Vijay Shankar V.L. Adv. Mr. U.A. Rana, Adv. Mr. Himanshu Mehta, Adv. .....

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Mr. Manish Kumar Saran, AOR Mr. Gopal Singh, AOR Mr. Nakul Dewan, Adv. Mr. Pradhuman Gohil, Adv. Mr. Vikash Singh, AOR Ms. Taruna Singh Gohil, Adv. Mr. Himanshu Chaubey, Adv. Mr.Vinayak Panikkar, Adv. Ms. Ishita Singh, Adv. Mr. Zain Maqbool, Adv. Mr. Abhijit Sengupta, AOR Mr. K. Harshavardhan, Adv. Mr. Karthik Sunder, Adv. Mr. Senthil Jagadeesan, AOR Mr. Gaurav Kejriwal, AOR Mr. Sujit Keshri, Adv. Mr. P. S. Sudheer, AOR Mr. Rajan Narain, AOR Mr.Ravinder Narain, Adv. Mr. Ajay Aggarwal, Adv. Ms. M .....

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AOR Mr. K. K. Mani, AOR Mr. Ajay Choudhary, AOR Mr. B. Krishna Prasad, AOR M/s. Karanjawala & Co., AOR Mr. Nikhil Nayyar, AOR Mr. Shishir Deshpande, AOR Mr. K. V. Vijayakumar, AOR Mr. Romy Chacko, AOR Mr. Pramit Saxena, AOR Ms. Sharmila Upadhyay, AOR Mr. Gopal Prasad, AOR Mr. Jayesh Gaurav, Adv. Mr. Ejaz Maqbool, AOR Mr. S. Udaya Kumar Sagar, AOR Mr. E. C. Agrawala, AOR Mr.Tejswai Kumar Pradhan, Adv. Dr. Rajeev Sharma, Adv. Mr. V.N. Raghupathy, Adv. Mr. M. Paikaray, Adv. Mr. R. Chandrachud, .....

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Adv. Ms. Apurva Garg, Adv. Mr. Milind Kumar, AOR Mr. C. N. Sree Kumar, AOR Mr. Ravi Prakash Mehrotra, AOR Mr. Praveen Kumar, AOR Mr. Devashish Bharuka, AOR Mr. Gunnam Venkateswara Rao, AOR Mr. Gopal Singh, AOR Mr. M. P. Vinod, AOR Mr. Dileep Pillai, Adv. Mr. Atul Shankar Vinod, Adv. Mr. Ajay K. Jain, Adv. Mr. Vimlesh Kumar, Adv. Mr. Roy Abraham, Adv. Ms. Reena Roy, Adv. Ms. Seema Jain, Adv. Mr. Akhil Abraham, Adv. Mr. Himinder Lal, Adv. Ms. Baby Krishnan, AOR Mr. R. Sathish, AOR Mr. Rajiv Mehta .....

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Narayanan Nair, AOR Mr. M. Shoeb Alam, AOR Mr. Ardhendumauli Kumar Prasad, AOR Mr. Dharmendra Kumar Sinha, AOR Mr. R. V. Kameshwaran, AOR Mr. Deba Prasad Mukherjee, AOR Ms. Prabha Swami, AOR Mr. K. R. Sasiprabhu, AOR Mr. Krishnayan Sen, AOR Mr. B. S. Banthia, AOR Mr. Aniruddha P. Mayee, AOR Mr. M. K. Dua, AOR Mr. Parijat Sinha, AOR JUDGMENT ASHOK BHUSHAN, J. Leave granted. 2. These appeals relate to entry tax levied on goods imported from different countries and brought into local area of a Stat .....

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of Jharkhand, the relevant provisions of which statutes shall be noticed hereinafter. 3. A nineJudge constitution Bench in Jindal Stainless vs. State of Haryana and another, 2016 (11) Scale 1, had answered several questions pertaining to entry tax legislations of different States, which has largely settled various issues relating to entry tax. However, the issue pertaining to levibility of entry tax on the imported/foreign goods was left to be answered by regular Bench. Answering the reference .....

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fferent judgments rendered by different High Courts. For deciding this batch of appeals it is sufficient to notice facts of few of the appeals of each State. The parties shall be referred to as described in the High Courts. State of Orissa 5. In the appeals arising out of the judgments of the High Court of Orissa, most of the appeals have been filed against judgments dated 18.02.2008 and 09.10.2012. Judgments of different dates were also delivered by the Orissa High Court following its judgments .....

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cal area for consumption, use or sale therein and matters incidental thereto and connected therewith. 7. The Steel Authority of India, a public sector undertaking of Government of India filed the writ petition challenging the legality and constitutional validity of Orissa Entry Tax Act, 1999 and Orissa Entry Tax Rules, 2000 in so far as it seeks to levy and collect entry tax on imported goods including scheduled goods when brought into the mines premises of the writ petitioner No.1 Company at Pu .....

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tory. 8. The writ petition was heard along with the bunch of writ petitions raising some similar and some different grounds. The Division Bench vide its judgment dated 18.02.2008 upheld the vires of 1999 Act. Civil Appeals arising out of SLP(C) Nos.12424-12425 of 2008 - M/s. Simples Infrastructures Limited vs. State of Orissa & Ors. also needs to be noted: 9. The writ petitioner is a company which carries on business on works contract for construction of different types of civil and piling w .....

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the respondent from realising any entry tax. The writ petition was also decided along with the bunch of writ petitions vide High Court's judgment dated 18.02.2008 as stated above. 10. Large number of civil appeals have been filed against the judgment dated 18.02.2008. It is not necessary to notice facts of different cases. The writ petitioners were using rawmaterial brought from different places including foreign countries, Coal was also used by the various writ petitioners and levy on it o .....

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9 of 2010 Tata Steel Limited vs. State of Orissa & Ors. We now proceed to notice the facts and pleadings in the aforesaid writ petition. The writ petitioner, Tata Steel is company which has its branches, divisions across the State of Orissa. The writ petitioner carries on business in mining as well as manufacturing of FerroChrome and FerroManganese at different plants in the State of Orissa. For the ready reference the pleadings in paragraph 3 of the writ petition needs to be extracted which .....

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itioner is registered under OVAT Act, CST Act and Orissa Entry Tax Act, 1999, and has been allotted TIN number by the Sales Tax Officers of the State. The petitioner brings in various goods including scheduled goods for its plants, from within the state and also from outside the territory of India by way of import. The materials so purchased from various countries are duly supported by Bill of Entry and other documents which have duly been incorporated in the accounts of the petitioner company. .....

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uties of Customs including Export Duty (Entry 83 of List I). 13. The States never intended to levy entry tax on goods from outside the country. Referring to the definition of 'purchase value', it is submitted that the omission of Customs Duty in Section 2(j) was deliberate. It is impermissible for the State to enact a legislation purported to be under Entry 52 of List II, the incidence of which is on import of goods from outside India which is exclusively a matter for the Union under Ent .....

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1999 would suggest that levy is on the basis of destination of scheduled goods. It is not the transaction of import which is sought to be levied with entry tax. The Division Bench vide its judgment dated 09.10.2012 dismissed all the writ petitions except writ petition No.7 of 2008 of M/s. IFGL Refractories. Civil Appeal No.32256 of 2013 - M/s. National Aluminium Company Limited vs. State of Orissa & Ors. 16. The writ petitioner is the public sector undertaking and is running three units, na .....

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oods including scheduled goods for its business operation from within the State and also from outside the territory of India by way of import. The writ petitioner has filed the writ petition challenging the Orissa Entry Tax Act, 1999 and levibility of entry tax on petitioner. By a common judgment dated 09.10.2012 the writ petition has been dismissed. Aggrieved by which this appeal has been filed. Civil Appeal arising out of SLP(C) No.1426 of 2013 - Emami Paper Mills Limited vs. State of Orissa & .....

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r manufacturing plant in knock down condition with spares. The petitioner also imports other machineries from other countries and the said imported machineries and spare parts enter the Country through different ports and are cleared by the petitioner on payment of the import duty levied under the Customs Act, 1962. Once the said plants and machineries are unloaded and cleared upon payment of the Customs Duty the said plant and machineries are transported to the petitioner's factory at Balgo .....

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under protest. Petitioner protested against the levy of entry tax on the plant and machinery imported from USA. The petitioner filed a writ petition No. 13978 of 2008 Orissa Act, 1999 questioning the levy of entry tax on import from outside the country, the constitutional validity of the Orissa Act, 1999 was also challenged. Counter-affidavit and rejoinder-affidavits were filed to the writ petitions and vide judgment dated 9.10.2012 the High Court dismissed the writ petition. Civil Appeal arisin .....

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For the manufacture of the refractory products, the petitioner requires imported raw materials, stores and spares, trading items and capital goods. Petitioner imports various materials from different countries. The materials are fused silica, lime stabilize fused zirconia, fused magnesia, sintered magnesia, silicon metal, natural PVC, refractory glaze, furfural alcolhol and micro silica. Generally, these goods are imported from either the Kolkata Port or the Kolkata Airport where from they are .....

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n was filed basically on the following three grounds: a. Entry tax is not leviable on goods imported from outside India as being violative of Article 286 read with Article 246 of the Constitution; b. Entry tax is not leviable on goods purchased from other States when the same goods are not manufactured within the State of Orissa in terms of Article 304(a) of the Constitution. c. In any case, the goods imported from outside India/purchased from other States by the petitioner are not specified in .....

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ansferred Case No.149 of 2013 - M/s. Paradeep Phosphates Ltd. vs. State of Orissa and ors. 20. The Transfer Petition (C) No.530 of 2012 was filed by the petitioner, M/s. Paradeep Phosphates Ltd. praying for the transfer of Writ Petition No.16541 of 2007 pending in the High Court of Orissa at Cuttack. The transfer petition was allowed by this Court on 23.07.2013 on which this T.C. No.149 of 2013 has been registered. The petitioner is engaged in manufacture of different types of chemical fertilize .....

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ch roads from the State Highway, developed the plant and township site. The petitioner procures about 98% of its raw materials from outside the country. Petitioner has been paying entry tax on imported scheduled goods 'under protest'. Petitioner filed writ petition No.16541 of 2007 challenging the notice for assessment and payment of entry tax. Petitioner also prayed for a writ of mandamus directing the State of Orissa not to impose levy of entry tax on the goods imported from outside th .....

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t up its own Captive Power Plant at Angul near its Smelter Plant. For production of electricity, the basic raw material is coal, which obtained from Mahanadi Coal Fields. The petitioner filed Original Jurisdiction Case No.72 of 2001 challenging the validity of 1999 Act on several grounds. The Division Bench of the High Court vide its judgment dated 13.11.2002 declined to strike down the 1999 Act. However, while declining to strike down the 1999 Act following directions were issued: 44. In the re .....

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shall collect by way of Entry Tax amount equal to the tax payable on the value of the finished products under Section 3 of the Act from the buying dealer either directly or through an intermediary only if the scheduled goods sold are intended for ENTRY into any local area of the State for the purpose of Consumption, Use or Sale. 23. Aggrieved by the said judgment, these civil appeals have been filed. Civil Appeals arising out of SLP(C) Nos.1674446 of 2013 - BRG Iron & Steel Co. Pvt. Ltd. vs. .....

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such as its plant and machinery from outside the country. The petitioner has been regularly filing return under the Orissa Entry Tax Act, 1999. However, vide letter dated 30.03.2010 entry tax was demanded. The judgment was delivered by the High Court on 09.10.2012 in Writ Petition No.15519 of 2010 holding that levy of entry tax on imported goods was within the purview of Orissa Act, 1999. An order dated 20.10.2010 has been passed by the Joint Commission of Sales Tax holding the petitioner liable .....

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ods brought from outside the country into the local area. Petitioner filed Writ Petition No.16650 of 2010. In the writ petition, petitioner has attacked the correctness of the assessment order dated 23.02.2010 on the ground that assessment order under Section 9C of the 1999 Act has been made by way of Orissa Entry Tax (Amendment) Act, 2005 which came into force with effect from 19.05.2005. The writ petition has been dismissed by the Division Bench by its judgment dated 08.11.2010 on the ground t .....

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erala on 18.12.2006. There is one writ petition filed by a company. It is sufficient to notice facts of few cases to decide the group of cases relating to Kerala. Civil Appeal Nos. 33813400 of 1998 State Of Kerala & Ors Vs. FR. William Fernandez & Ors. 27. The State is in appeal against the Division Bench judgment dated 06.01.1998 of Kerala High Court delivered in a batch of writ appeals including Writ Petition No. 770/1997; Father William Fernandez & Ors. vs State of Kerala & Or .....

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judgment dated 20.2.1997 dismissed all the writ petitions holding that entry tax can be collected from the owners of the vehicles who brought them from abroad before granting them registration in the State for consumption, use or sale. Writ Appeals were filed against judgment dated 20.2.1997 which have been decided vide common judgment dated 06.01.1998. Although, the Division Bench held that there is no limitation upon the State's powers to legislate under Entry 52 List II of the VIIth Sche .....

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dated 18.12.2006 of Division Bench of Kerala High Court by which judgment a bunch of writ petitions have been decided holding that the levy of entry tax under 1994, Act as discriminatory and violative of Article 14, 301 and 304 of the Constitution of India. The Division Bench followed the earlier Division Bench judgment of the Kerala High Court in Father William Fernandez case decided on 06.01.1998. Writ petition was filed by various assesses challenging the constitutional validity of 1994, Act .....

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r appeals questioning subsequent judgments which have followed judgment dated 06.01.1998 and 18.12.2006. Writ Petition (C) No. 574 of 2003 Parisons Agrotech Private Ltd. & Anr vs. State of Kerala & Ors. 29. This writ petition has been filed under Article 32 of the Constitution praying for declaration that 1994, Act is ultra vires and unconstitutional and the Act also does not apply to the entry of goods imported in India from foreign country. The petitioner company is engaged in the impo .....

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ntral Sales Tax Act, 1956. The respondent directed the first petitioner to remit the entry tax of purchase price of crude palmolin imported by the petitioner. Petitioner has also relied on Division Bench judgment of the Kerala High Court delivered in bunch of writ appeals including Writ Appeal 770 of 1997 against which SLP/Civil Appeal has been filed being CA 3381 - 3400 of 1998 and is pending. Civil Appeals relating to State of Bihar Civil Appeal arising out of SLP(C) No. 26543 of 2008 M/s ITC .....

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board, packaging materials and printing, thereon for said purpose Company has factories at different places all over the country including in Munger in the State of Bihar. For manufacturing of cigarettes smoking mixtures, the company causes entry of tobacco and other raw materials purchased from outside the State of Bihar into the local area of Munger. The State of Bihar has enacted the Bihar Tax on Entry of Goods into Local Areas Act 1993(hereinafter referred to as 1993, Act). The 1993, Act has .....

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tax under the impugned Act. Civil Appeal arising out of SLP(C) No. 11646 of 2009- VST Distribution Storage v.The State of Bihar & Ors. 31. This appeal has been filed against judgment dated 28.08.2008 by which judgment the writ petition filed by the appellant has been disposed of in terms of the para 69 of the Division Bench judgment of Patna High Court, M/s Indian Oil Corporation Ltd. (supra). Civil Appeal arising out of SLP(C) No. 7356 of 2010 ITC Ltd vs State of Bihar 32. This appeal has b .....

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mmissioner, Commercial Tax Bhagalpur and demand notice dated 03.07.2009 under the Amendment Act, 19 of 2006. It was noticed in the writ petition that in view of the judgment dated 09.01.2007 of the Patna High Court in Indian Oil Corporation Ltd. (supra) after the amendment by amending Act, 19 of 2006 the entry tax sought to be levied with effect from 29.08.2006, has become compensatory and constitutionally valid. Civil Appeal of State of Jharkhand Civil Appeal arising out of SLP (C) 1101 OF 2007 .....

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Australia and Newzealand in pursuant to several foreign contracts executed with foreign parties which comes to Haldia and Paradeep Ports in India and from there said coal is transported either by rail or road to Jamshedpur in the State of Jharkhand. 1993, Act was adopted in the State of Jharkhand after its creation from 15.11.2000. A Notification dated 23.03.2002 was issued under Sub section 1 of Section 2 by adding 10 new items to the schedule. Notification dated 23.03.2002 was issued levying t .....

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of Article 301 read with Article 304. State Aggrieved by the said judgment have come up in the appeal. This appeal was heard by this Court on 29.08.2017 by which proceeding the impugned judgment of the Jharkhand of High Court which rested on the Compensatory Theory has been set aside. It is useful to quote the last two paras of the proceeding dated 29.08.2017 which is to the following effect: We need not comment upon this argument. Suffice is to state that insofar as the impugned judgment which .....

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appeal, we have permitted the assessee to raise the only issue as to whether on imported coal entry tax could be levied. 36. We have heard large number of learned counsel for the writ petitioners including Shri Arvind P. Datar, Shri A.K. Ganguli, Shri S.K.Bagaria, Shri Jagdeep Dhankar, Dr. G.C. Bharuka, Shri Ashok Kumar Panda, Senior Advocates. Shri Rakesh Dwivedi, Senior Advocate has been heard on behalf of the State of Orissa and State of Bihar. Shri V.Giri, Senior Advocate has appeared on be .....

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f goods into a local area from any place (i) outside that local area or (ii) any place outside the State. The provision does not contemplate goods entering from any place outside the country. Putting a literal interpretation of the 1999, Act, it is clear that legislature never intended to cover the goods imported from outside the country. It is submitted that wherever legislature intended to impose entry tax on the imported goods coming from outside the country, the entry tax legislation specifi .....

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ally provided for (iii) into a local area from any place outside the territory of India. Similar is the provision of Section 2(1)(c) of Uttarakhand Tax on Entry of Goods into Local Areas Act, 2009 and further Section 2(1)(h) of the West Bengal Tax on Entry of Goods into Local Area Act, 2012 where any place outside India is specifically mentioned. ii. It is only Parliament which is empowered to make any law with regard to trade & commerce with foreign countries as well as with regard to levy .....

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m outside India which continues to be imported goods in the course of import. The import movement in respect of imports continues till the goods reach the factory, which movement is an integral and inexplicable part of the import movement. From the above single taxing event and single import movement, the State Legislature cannot carve out any taxing event by seeking to term it as a tax from entry into local area for consumption, use or sale therein. The entry tax legislation imposing entry tax .....

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eme Court in Brown versus Maryland 6 L.Ed. 678 which laid down that the constitutional prohibition of State to tax the goods imported survives even after they have landed and cleared from custom, after payment of duties the protection continues till they are sold by importer, is still good law and has been followed subsequently. iv. The impugned entry tax is not an entry under Entry 52 of List II of the VIIth Schedule of the Constitution. The tax covered by Entry 52 is nothing but the levy that .....

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octroi , which have been prior thereto, was levied by and for the benefit of local authorities and usurpation of this levy by State would thus be beyond the legislative power of the State under Entry 52. v. The imported machineries which are imported in completely knocked out condition are not covered by Schedule of 1999, Act. A plant imported in knocked out condition is neither machinery nor equipment and is not covered by Part II of Schedule. Hence, no entry tax could have been levied on impo .....

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oth the phrases on a plain and literal consideration would include the goods which are entering from outside the country. Foreign territory would be a place which is not only outside the local area but also outside the State. 39. The State Legislature is fully competent to levy entry tax under Entry 52 List II. The legislative field as included in Entry 52 List II has nothing to do with Entry 41 and Entry 83 of List I. Under the Indian Constitution, the distribution of powers with regard to tax .....

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ns to bring in. The word imported goods are defined in Customs Act, 1962. The above definitions clearly indicate that ones the goods have been cleared for home consumption then they ceased to be imported goods. The importation happens before clearance for home consumption and after clearance the character as import ceases. The Doctrine of Unbroken Package as evolved by the US Supreme Court is not attracted in this country. The judgment of the US Supreme Court in Brown versus State of Maryland, 6 .....

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ia, there is clear demarcation of taxing power of Union and the State. When by Entry 52 List II, entry of goods in the local area for consumption, use or sale has been specifically provided the said entry has to be given its full meaning and content. 42. Learned counsel appearing for the writ petitioners in the State of Bihar in civil appeal arising out of judgment of Patna High Court as well as Jharkhand High Court has also adopted the above submissions raised on behalf of the petitioners. In r .....

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from any place outside the State for consumption, use or sale therein including outside territory of India. Learned counsel appearing for the respondent in civil appeals of State of Kerala has reiterated the submissions raised on behalf of the writ petitioners in appeals arising out of judgment of Orissa High Court. 44. From the submission raised by learned counsel for the parties and material on record following issues arise for consideration in this batch of appeals: i. Whether Section 2(d) re .....

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e territory of India is legislation trenching the field of import and export , duties of custom reserved to Parliament. iv. Whether the importation of goods, imported from a territory outside the India continues till the goods reach in the premises/factory of the importer, during which period State at no point of time is legislative competence to impose any tax. v. Whether doctrine of unbroken package as evolved by the American Court are to apply with regard to imported goods of the petitioners .....

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State has no legislative competence to impose entry tax under Entry 52 List II. viii. Whether a plant, imported in knocked out condition is covered by the Part II of the Schedule of Orissa Act, 1999. 45. Before we proceed to consider the various issues as noted above, it is relevant to notice the statutory provisions relating to entry tax applicable in the above mentioned States. 46. The Orissa Entry Tax Act, 1999 (hereinafter referred to as Orissa Act, 1999 ) was enacted to provide for the lev .....

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any place that local area or any place outside the State for consumption, use or sale therein; (e) "Importer" means a dealer or any other person who in any capacity brings or causes to be brought any scheduled goods into a 1mal area for consumption, use or sale therein; (f) "Local area means the areas within the limits of any (i) Municipal Corporation, (ii) Municipality, (iii) Notified Area Council, (iv) Grama Panchayat, and (v) Other loca1 authority by whatever name called, cons .....

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rom such date as may be specified by the State Government and different dates and different rates may be specified for different goods and local areas subject to such conditions as may be prescribed. The Orissa Act, 1999 has been amended from time to time. 48. The Kerala Tax on Entry of Goods into Local Areas Act, 1994 (hereinafter referred to as 'Kerala Act, 1994) was enacted to provide for levy of tax on the entry of goods into the local area for consumption, use or sale therein. Section ( .....

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uot;Importer" means a person who brings or cause to be brought any goods whether for himself or on behalf of his principal or any other person, into a local area, from any place outside the State for use, consumption, or sales therein or who owns the goods at the time of entry into the local area. (h) "Local area" means the area of jurisdiction of a local authority; (n) "purchase value" means the value of the goods as ascertained from the original invoice and includes in .....

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by way of purchase, then the purchase value shall be the value or price at, which the goods of like kind or quality is sold or is capable of being sold, in open market 49. Section 3 is a charging Section which is as follows: Section 3 Levy of Tax Substituted by Act 23 of 1996 w.e.f. 2971996.) (1) Subject to the provisions of this Act, tax shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein. (Inserted by Act 10 of 2005.) The Tax o .....

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es 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: Provided further that no tax shall be levied and collected in respect of any (Substituted by Act 23 of 1996 w.e.f. 2971996.) goods which is the property of the Central Government or which is used exclusively for purposes relating to the defence of India. (2) The tax shall be payable by the importer in such manner and within such time as may be prescribed. 50. .....

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charges, [import duty, marine insurance charges, landing and whatfage and port charges] excise duties, countervailing duties, sales tax, transport charges, freight charges and all other charges incidental to the import of scheduled goods: Provided that where the purchase invoice/bills are not produced or when the invoice/bills produced are proved to be false or if, the scheduled good are acquired or obtained otherwise than by way of purchase the import value shall be the value price at which the .....

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sub-section (1) is as follows: 3. Charge of Tax- (I) There shall be levied and collected a tax on entry of scheduled goods into a local area for consumption, use or sale therein for the purpose of development of trade, commerce and industry in the State, at such rate, not exceeding twenty percent, of the import value of such goods, as may be specified by the State Government in a notification published in a official gazette subject to such conditions as may be prescribed: Provided different rate .....

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se of consumption, use or sale, the burden of providing that the import was for purposes other than for consumption, use or sale, shall be on importer importing such goods and making such claim. (1A) The tax under sub-section (1) shall be continued to be levied till such time as is required to improve infrastructure within the State such as power, road, market, condition etc. with a view to facilitate better market condition for trade, commerce and industry and to bring it to the level of, Natio .....

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d, Bihar Act, 1993 was adopted vide notification dated 18th December, 2000. The amendment has been made vide Jharkhand Act 2 of 2002 in Bihar Act 16 of 1993. In exercise of powers conferred by sub-section (1) of Section 3 of the Tax Act 1993 (Bihar Act 16' 1993) notification dated 23rd March, 2002 was issued specifying the conditions and rates of tax on the entry of scheduled goods. Whether Entry Tax Legislations contemplated levy of Entry Tax on Imported goods 54. We now proceed to consider .....

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ubmitted that entry of goods into local area can be any of the following places: (i) from any place outside that local area that is from other local area within the State of Orissa itself; (ii) from any place outside the State that is from any place outside the State of Orissa. The expression State here can only be the State of Orissa and cannot mean the country as a whole. (iii) from any place outside the country. 56. The definition of Section 2(d) on its own term does not cover entry of goods .....

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arious other States' enactments have been made where any place outside the country has been expressly mentioned. Reference has been made to West Bengal Tax on Entry of Goods into Local Area Act, 2012, Section 2(h) which is to the following effect: (h) entry of goods , with all its grammatical variations and cognate expressions, means bringing of goods into a local area from any place outside that local area or any place outside the State or from outside India, for consumption, use or sale th .....

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eans that goods entering into local area from any place outside the local area or outside the State are to be charged with entry tax. Foreign territory would be a place which is not only outside the local area but also outside the State. The writ petitioners are trying to introduce words of limitation in the definition clause. The interpretation which is sought to be put up is that both the phrases be read as: (1) from any place outside that local area but within that State ; (2) any place outsi .....

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List II of Seventh Schedule of the Constitution. Entry 52 also provided a legislative field, namely, 'taxes on the entries of goods into a local area for consumption, use or sale therein'. Legislation is thus concerned only with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to chargeability of entry tax. In this context reference is made to judgment of Federal Court reported in Miss Kishori Shetty v. The King, AIR 1950 FC .....

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al Legislature has, subject to the other sub-sections of that section, the exclusive power to make laws with respect to matters enumerated in List II in the sch. VII. Item 31 of that List comprises "Intoxicating liquor and narcotic drugs, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors, opium and other narcotic drugs" subject to certain reservations not material here. Prima facie, the offending provisions are within this leg .....

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Federal Legislature to regulate imports of foreign liquors across the sea or land frontiers of British India which are customs frontiers as defined by the Central Government and thus seriously jeopardize an important source of central customs revenue. As under S. 100, Constitution Act, the Provincial legislative powers under List II were subject to the exclusive powers of the Federal Legislature in List I, the Bombay Act to the extent to which it trenched upon the subject of Item 19 of the latt .....

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particularly in Item 19 to lead us to out down the fall meaning of the Provincial entry by excluding foreign liquors from its purview. There is, in our view, no irreconcilable conflict here such as would necessitate recourse to the principia of Federal supremacy laid down in S. 100, Constitution Act. Section 14B does not purport to restrict or prohibit dealings in liquor in respect of its importation or exportation across the sea or land frontiers of British India. It purports to deal with the .....

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at in a taxing statute one has to merely look into the text and there is no room for any intentment in deciding liability of the subject to tax regard must be had to plain and strict letter of law. Reliance has been placed on the judgment CIT v. Vatika Township (P) Ltd., (2015) 1 SCC 1. In paragraph 41.2 and paragraph 41.3 following has been held: 41.2. At the same time, it is also mandated that there cannot be imposition of any tax without the authority of law. Such a law has to be unambiguous .....

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ke endeavour to find out the intention of the legislature. At the same time, this very principle is based on fairness doctrine as it lays down that if it is not very clear from the provisions of the Act as to whether the particular tax is to be levied to a particular class of persons or not, the subject should not be fastened with any liability to pay tax. This principle also acts as a balancing factor between the two jurisprudential theories of justice - Libertarian theory on the one hand and K .....

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uity be found to exist, it must be resolved in favour of the citizen. 62. Further, in Mathuram Agrawal v. State of M.P., 1999(8) SCC 667, in paragraph 12 following has been stated: 12....The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It .....

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, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter. 63. There cannot be any dispute to the proposition as laid down by this Court in the above noted cases. Statutes which are in consideration are the statutes where clear charging provision has been enacted and charging of entry tax is on .....

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orted goods coming from outside the country are excluded from charge of entry tax. No such indication is discernible from any provision of the Act. Charging event is complete as and when goods enter into local area for use, sale or consumption irrespective of its origin. We, thus, are of the view that definition clause, Section 2(d) read with Section 3 does not exclude the charging of the entry tax on goods entering into local area for consumption, use or sale from outside the country. 64. In so .....

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itory of India, we only say that the said inclusion of words 'from outside the India' is a provision made by way of abundant caution. 65. The Bihar Amendment Act, 2006 by which Section 2(c) was inserted by including clause (iii) is also by way of abundant caution and to provide it expressly which was already included in the definition of Section 2(c) read with Section 3. 66. Similarly when by Bihar Act 11 of 2003 Section 2 was amended in following manner: "2. Amendment of Section2 o .....

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and explanatory. It did not introduce a concept which was not already there. 67. In Section 2(d) the word used is 'any place outside that local area or outside the State'. The word 'any' is a word of very wide meaning and use of word 'any' excludes any limitation. We, thus, are of the view that all the three legislations clearly did not exclude goods coming from outside the territory of India and the definition of entry of goods read with charging section clearly included .....

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onsumption, use or sale therein. 69. The submission, which has been pressed to impugn the State legislation is that the entry tax legislation intrude into the field which is reserved to Parliament under Entry 41 and Entry 83 of List I, which are as follows: Entry 41- Trade and commerce with foreign countries; import and export across customs frontiers; definition of customs frontiers. Entry 83 - Duties of customs including export duties. 70. In so far as trade and commerce with foreign countries .....

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, which has been earmarked to the Parliament as well as to the State Legislatures. Taxing power of both Union and State Legislatures are mutually exclusive and has been clearly demarcated. This is further clear by the fact that in List III, i.e. Concurrent List, no taxing entry is included except the entry of stamp duty & levying of fee in respect of any of the matters in List III but not including fees taken in any Court. 72. Constitution Bench of this Court in Godfrey Phillips India Ltd. & .....

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at p. 166 in para 1A.25 where, after commenting on the problems created by the overlapping powers of taxation provided for in other countries with federal structures such as the United States, Canada and Australia, the learned author opined: The lists contained in Schedule VII to the Government of India Act, 1935, provided for distinct and separate fields of taxation, and it is not without significance that the concurrent legislative list contains no entry relating to taxation but provides only .....

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tion of India with like beneficial results. 45. This view has also been reiterated in Hoechst Pharmaceuticals Ltd. v. State of Bihar, (1983) 4 SCC 45: (SCC pp. 9293, paras 75 & 76) A scrutiny of Lists I and II of the Seventh Schedule would show that there is no overlapping anywhere in the taxing power and the Constitution gives independent sources of taxation to the Union and the States. Following the scheme of the Government of India Act, 1935, the Constitution has made the taxing power of .....

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ing power is within a particular legislative field, it would follow that other fields in the legislative lists must be construed to exclude this field. In Para 46,following was held : 46. Therefore, taxing entries must be construed with clarity and precision so as to maintain such exclusivity, and a construction of a taxation entry which may lead to overlapping must be eschewed. If the taxing power is within a particular legislative field, it would follow that other fields in the legislative lis .....

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d down by this Court is that one must find out by applying the rule of pith and substance that whether the legislation falls within any of the List II, if it does, no further question arises. Attack on the ground of legislative competence must fail. This Court in State of A.P. & Ors. Vs. Mcdowell & Co. & Ors., (1996) 3 SCC 709 laid down following in Paragraph 36: - 36. In view of our finding that the impugned enactment is perfectly within the legislative competence of the State Legis .....

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lace in such a context. If a particular matter is within the exclusive competence of the State Legislature, i.e., in List II that represents the prohibited field for the Union. Similarly, if any matter is within the exclusive competence of the Union, it becomes a prohibited field for the States. The concept of occupied field is really relevant in the case of laws made with reference to entries in List III. In other words, whenever a piece of legislation is said to be beyond the legislative compe .....

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assumption of any overlapping between a subject allocated to Union and State arises. When the field of legislation falls in one or other in Union or State Lists, the legislation falling under the State entry has always been upheld. The Scheme of distribution of legislative power between Union and States in the Constitution of India relies on the distribution of legislative power between the Federal Government and Provincial Government as contained in Seventh Schedule of the Government of India .....

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making of groundnut cake out of the residue was assessed to tax under the 1939 Act. The levy of tax was challenged by the respondent before the District Munsif and the High Court of Madras on the ground that first sale of goods manufactured in the Province was a duty of excise, which is not within the competence of Provincial Legislature. The High Court accepted the challenge and held that State Legislature was not competent to tax. In the Government of India Act, 1935, the Federal Legislature, .....

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overlapping in law. Following observations were made: The duties of excise which the Constitution Act assigns exclusively to the Central Legislature are, according to the Central Provinces Case, duties levied upon the manufactory or producer in respect of the manufacture or production of the commodity taxed. The tax on the sale of goods, which the Act assigns exclusively to the Provincial Legislatures, is a tax levied on the occasion of the sale of the goods. Plainly a tax levied on the first sa .....

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taxpayer who pays a sales tax is also a manufacturer or producer of commodities subject to a central duty of excise, there may no doubt be an overlapping in one sense ; but there is no overlapping in law. The two taxes which he is called on to pay are economically two separate and distinct imposts.... 76. Federal Court further laid down that manufacture and sale has no necessary connection and both are independent. It was further held that : .... It is the fact of manufacture which attracts the .....

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ty unless he has first manufactured or produced it ; but he is liable, if at all, to a sales tax because he sells and not because he manufactures or produces; and he would be free from liability if he chose to give away everything which came from his factory. In our opinion the power of the Provincial Legislatures to levy a tax on the sale of goods extends to sales of every kind, whether first sales or not; and we regret that we are unable to agree with the contrary opinion which has been expres .....

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quot;, which must determine into what category it falls. After referring to the provisions of Madras General Sales Tax Act, 1939, Lordship opined that its real nature, its pith and substance is that it imposes a tax on the sale of goods. The Privy Council further observed that the Indian Constitution (The Government of India Act, 1935) contains what purports to be an exhaustive enumeration and division of legislative powers between the Federal and the Provincial Legislatures. Upholding the Legis .....

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manufacturer or producer in respect of the commodity manufactured or produced. It is a tax upon goods not upon sales or the proceeds of sale of goods. Here again their Lordships find themselves in complete accord with the reasoning and conclusions of the Federal Court in the Boddu Paidanna case. Province of Madras v. Boddu Paidanna and Sons. Reported in ('42) 29 A.I.R. 1942 F.C. 33 The two taxes, the one levied upon a manufacturer in respect of his goods, the other upon a vendor in respect o .....

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of the duty of excise which is attracted by the manufacture itself.... 78. This Court in the case of Ram Krishna Ramnath Agarwal of Kamptee Vs. Secretary, Municipal Committee, Kamptee, AIR 1950 SC 11 had occasion to consider the levy of octroi on the entry of excisable goods. The appellant, on 30.11.1945 brought to Kamptee, from outside tobacco to make bidis. Municipality directed for recovery of the octroi duty under Section 66(1) (e) of the Central Province Municipalities Act, 1922. The appel .....

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learly shows that the relevant question is what is the nature of the tax. Excise duty is a tax on manufactured goods. Octroi duty is a tax levied on the entry of goods within a particular area. Under the Excise Act, tobacco becomes excisable goods within the meaning of Item 9 in the Schedule. The subsequent use of such manufactured goods in making different articles only affects the rate of tax. Therefore, tobacco becomes subject to excise duty when it reaches the stage of manufacture mentioned .....

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ating electricity for the purpose of running its mills. State of Madhya Pradesh imposed electricity duty under Central Provinces and Berar Electricity Duty Act, 1949. The imposition of duty was challenged on the ground that Provincial Legislature has no competence to impose electricity duty since on manufacture of electricity, it is Central Legislature under Entry 84 List I has competence. This Court repelling the contention laid down following in Paragraph 6: - 6. It is difficult to see how the .....

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ergy and stores it up, he would not be required to pay any duty under the Act. It is only when he sells it or consumes it that he would be rendered liable to pay the duty prescribed by the Act. The Central Provinces and Berar Electricity Act was enacted under Entry 48B of List II of the Government of India Act, 1935. The relevant portion of that Entry read thus: Taxes on the consumption or sale of electricity Entry 53 of List II of the Constitution is to the same effect............The language u .....

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de of power to the legislature to legislate and not in a narrow and pedantic sense. Constitution bench judgment in D.G. Gose and Co. (Agents) Pvt. Ltd. Vs. State of Kerala & Anr., (1980) 2 SCC 410 also need to be noticed. The Kerala Building Tax Act, 1975 imposing tax on building under List II Entry 49 tax on land and buildings whereas List I Entry 86 Taxes on the capital value of assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies. 81. Ref .....

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ther principle for reconciling apparently conflicting tax entries follows from the fact that a tax has two elements: the person, thing or activity on which the tax is imposed, and the amount of the tax. The amount may be measured in many ways; but decided cases establish a clear distinction between the subjectmatter of a tax and the standard by which the amount of tax is measured. These two elements are described as the subject of a tax and the measure of a tax. It may well be that one s buildin .....

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as also held that taxing power of the Union and the States are mutually exclusive. Approving the findings expressed by H.M. Seervai in its treatise Constitutional Law of India, following was observed: ...... The celebrated author, in our opinion, was right in saying so for the taxing power of the Union and the States are mutually exclusive. While the Parliament cannot legislate on the subjects reserved for the States, the States cannot similarly trespass onto the taxing powers of the Union. If t .....

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uded a tax. The taxing powers of the Union and the States have been made mutually exclusive so that Parliament cannot deprive the States of their taxing powers as has happened in countries where the powers of taxation are concurrent. It would be surprising if the Union legislature, i.e. Parliament could not take away the taxing powers of the State legislatures and yet it would be open to the Union executive Under Article 304(b) to deprive the State legislatures of their taxing powers. 83. As not .....

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levied by the Union under Entry 83 List I. We have also arrived at the same conclusion in view of the foregoing discussions. We thus hold that entry tax legislations do not intrude in the legislative field reserved for Parliament under Entry 41 and under Entry 83 of List I. The State Legislature is fully competent to impose tax on the entry of goods into a local area for consumption, sale and use. We thus repel the submission of petitioner that entry tax legislation of the State encroaches in th .....

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ted imports declined in the third quarter. See parallel imports. 2. The process or activity of bringing foreign goods into a country the import of products affects the domestic economy in significant ways. Cf. Export, n. 3. Meaning; esp., implied meaning the court must decide the import of that obscure provision. 4. Importance; significance time will tell the relative import of Judge Kozinski s decisions in American law. 85. In Advanced Law Lexicon, by P. Ramanatha Aiyar, 3rd Edition, import has .....

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Imported goods means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption; 2(26) importer , in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes [any owner, beneficial owner] or any person holding himself out to be the importer; 87. This Court had occasion to consider the concept of import and export in context of Article 286 of the Constitution .....

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Madras in addition to purchases made in the local market, and, after converting them by means of certain processes into edible kernels, exporting the kernels to other countries, mainly America. The oil pressed from the shells removed from the cashewnuts was also exported. The Constitution having come into force on January 26, 1950, the respondent in each appeal claimed exemption under Article 286(l)(b) in respect of the purchases made from that date till May 29, 1950, the end of the account year .....

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hat is exempted under the clause is the sale or purchase of goods taking place in the course of the import of the goods into or export of the goods out of the territory of India. It is obvious that the words import into and export out of in this context do not mean the article or commodity imported or exported. The reference to the goods and to the territory of India make it clear that the words export out of and import into mean the exportation out of the country and importation into the countr .....

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h occasions the export) cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction . It is in that sense that the two activities - the sale and the export - were said to be integrated. A purchase for the purpose of export like production or manufacture for export, is only an act preparatory to export and cannot, in our opinion, be regarded as an act done in the course of the export of the goods out of the .....

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acturer in the same country the contract of sale is a home transaction; but when he resells these goods to a buyer abroad that contract of sale has to be classified as an export transaction. This passage shows that, in view of the distinct character and quality of the two transactions, it is not correct to speak of a purchase for export, as an activity so integrated with the exportation that the former could be regarded as done in the course of the latter. The same reasoning applies to the first .....

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ce on the contents of Article 286 of the Constitution especially Article 286(1)(b) read with Article 286(2). Article 286(1) and (b) are as follows: "Article 286. Restrictions as to imposition of tax on the sale or purchase of goods: - (1)No law of a State shall impose, or authorise the imposition of, a tax on the supply of goods or of services or both, where such supply takes place ( a)... ... ... (b) in the course of the import of the goods or services or both into, or export of the goods .....

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has to relate to Entry 41 read with Entry 83 of List I and it cannot relate to any other Entry and definitely not to any Entry in State List. Reliance was also placed on Section 5(3) of the Central Sales Tax Act, 1956. On the strength of Section 5, it is sought to be contended that on parity of logic the first sale after the import be treated as in the course of import. 92. Article 286 of the Constitution provides for restrictions as to the imposition of the tax on the sale or purchase of goods. .....

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g the concept of the import of goods. In so far as Section 5 sub-section (3) of Central Sales Tax Act, 1956, the said provision provides that last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export. Section 5(3) is with regard to the export of the goods out of the territory of India and has not been used with regard to the concept of import. Section 5(1), (2), (3) .....

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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. (3) Not withstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deeme .....

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ove, the restriction in the legislative power of the State as contained in Article 286 is with regard to taxing on sale or purchase of goods which takes place outside the State or in the course of import of the goods or services or export of goods or services. The restriction of Article 286 does not ipso facto can be placed while considering the legislative field of the State under Entry 52 and by virtue of Article 286 no restriction can be put on the legislative competence of the State in the f .....

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60 SC 595. This Court explained the word import and the phrase in the course of the import of the goods into the territory of India . In paragraphs 9 and 11, following has been held: 9. What does the phrase in the course of the import of the goods into the territory of India convey? The crucial words of the phrase are import and in the course of . The term import signifies etymologically to bring in . To import goods into the territory of India therefore means to bring into the territory of Indi .....

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rse etymologically denotes movement from one point to another, and the expression in the course of not only implies a period of time during which the movement is in progress but postulates also a connected relation. As regards the limits of the course, the learned Chief Justice observed at p. 68: It would seem, therefore, logical to hold that the course of the export out of, or of the import into the territory of India does not commence or terminate until the goods cross the customs barrier. Das .....

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is in progress. Therefore, the words in the course of the import of the goods into and the export of the goods out of the territory of India obviously cover the period of time during which the goods are on their import or export journey . We respectfully agree with the aforesaid observations of the learned Judges. The course of the import of the goods may be said to begin when the goods enter their import journey i.e. when they cross the customs barrier of the foreign country and end when they c .....

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cuments is also a purchase in the course of import, and (4) a sale by an importer of goods, after the property in the goods passed to him either after the receipt of the documents of title against payment or otherwise, to a third party by a similar process is also a sale in the course of import. 96. Learned counsel for the petitioners has placed much reliance on Nine Judges Constitution Bench in re Sea Customs Act Case, AIR 1963 SC 1760. This Court in the aforesaid case had answered a reference .....

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duction or manufacture in India of the property of a State used for purposes other than those specified in clause (2) of that article? (3) Will sub-section (2) of Section 20 of the Sea Customs Act, 1878 (Act 8 of 1878), and sub-section (1A) of Section 3 of the Central Excises and Salt Act, 1944 (Act 1 of 1944) as amended by the Bill set out in the annexure be inconsistent with the provisions of Article 289 of the Constitution of India? 97. In the above context, this Court had examined the distri .....

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e country are within the powers of Parliament. The States are not concerned with those. They are only concerned with taxes on the entry of goods in local areas for consumption, use or sale therein, covered by entry 52 in the State List. Except for duties of excise on alcoholic liquors and opium and other narcotic drugs, all duties of exercise are leviable by Parliament. Hence, it can be said that by and large, taxes on income, duties of customs and duties of excise are within the exclusive power .....

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able event is the import of goods within the customs barriers. In paragraph 26 of the judgment, following was stated: (26) Similarly in the case of duties of customs including export duties though they are levied with reference to goods, the taxable event is either the import of goods within the customs barriers or their export outside the customs barriers. They are also indirect taxes like excise and cannot in our opinion be equated with direct taxes on goods themselves. Now, what is the true n .....

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has laid much emphasis on the observations made by nineJudge Constitution Bench in paragraph 26 as quoted above. The above observations were made by the nineJudge Constitution Bench while considering the nature of import and export. It was held that the imposition of import duty results in a condition which must be fulfilled before the goods can be brought inside the customs barriers i.e. before they form part of mass of goods within the country. When the goods land in the custom area of the Ind .....

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g was held in paragraph 6: .... The import would be completed only when the goods are to cross the customs barriers and that is the time when the import duty has to be paid and that is what has been termed by this Court in Sea Customs case (SCR at p. 823) as being the taxable event. The taxable event, therefore, being the day of crossing of customs barrier, and not on the date when the goods had landed in India or had entered the territorial waters, we find that on the date of the taxable event .....

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is completed when the goods become part of the mass of goods within the country; the taxable event being reached at the time when the goods reach the customs barriers and the bill of entry for home consumption is filed. 102. The law relating to customs has been consolidated by the Customs Act, 1962. The definitions of import , imported goods and importer have already been noticed above. The definition of imported goods as given in Section 2(25) is - any goods brought into India from the place o .....

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posing entry tax in any manner is not entrenching in the power of the Parliament to impose customs duty. The goods are released for home consumption only after payment of the customs duty due to the Central Government. The goods which are imported cannot be held to be insulated so as to not subject to any State tax, any such insulation of the imported goods shall be a protectionist measure which will be discriminatory and invalid. When all normal goods are subjected to State tax no exemption can .....

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ry tax. The liability to pay State entry tax arises only when goods enter into a local area for consumption, use and sale, which event is entirely different and separate from the levy of a customs duty, which is on import. 103. Learned counsel for the petitioner has contended that the definition given in the provisions of the Customs Act, 1962 cannot control the scope and ambit of the Constitutional entries. It is submitted that Constitutional entries have to be read giving widest possible ampli .....

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actment. If it is otherwise, it would result in Parliament enacting and/or amending an enactment thereby controlling the ambit and scope of the constitutional provision. That cannot be the law. The power to legislate with which we are concerned is contained in Article 246. The fields are demarcated in the various entries. On reading both, it has to be decided whether the legislature concerned is competent to legislate when its validity is questioned. The ambit and scope of an entry cannot be det .....

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n in the Customs Act, 1962, the generally accepted meaning and definition of import as has been laid down in cases as noted above is that import commences when the goods leave the customs frontiers of the country from where the goods are imported and continue when the goods enters into the customs frontiers of imported country and ends when goods are released for home consumption. Till the event of import is over, Parliamentary Legislation, the control of Union continues for ensuring the realisa .....

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Entry 83. There is no invalidity in levy of entry tax by the States. Original/Unbroken Package Theory 106. The Original Package/ Unbroken Package is a theory which was evolved by U.S. Supreme Court in reference to the imported goods. The genesis of the theory is from the Chief Justice Marshall, in the case of Brown Vs. The State of Maryland, 6 L.Ed. 678. State of Maryland has enacted a law that all importers of foreign articles or commodities shall, before they are authorized to sell, take out .....

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power 'to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.' 107. Chief Justice Marshall in above context has laid down following: ..... It is sufficient for the present to say, generally, that when the importer has so acted upon the thing imported, that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power o .....

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The facts and issue which arose in the aforesaid case had been noted in the beginning of the judgment, which is to the following effect: - The plaintiffs have been for several years past, and still are, importing, shipping and commission merchants, in the city of San Francisco, in the state of California. In 1868, they received, on consignment from parties in France, certain champagne wines of the value of $10,000, upon which they paid the duties and charges at the customhouse. They then stored .....

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fficer levied upon the cases of wines thus stored, for the amount of the tax assessed and was about to sell them, when the plaintiffs paid the amount and the charges incurred, under protest, and then brought the present action in one of the district courts of the state, to recover back money paid. The district court gave judgment for the plaintiffs; the supreme court of the state reversed the judgment and the case is brought here on writ of error. The simple question presented in this case for o .....

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he fact, which is in substance, expressed in the citations made from the opinions of Marshal and Taney, that the goods imported do not lose their character as imports, and become incorporated into the mass of property of the State, until they have passed from the control of the importer or been broken up by him from their original cases. Whilst retaining their character as imports, a tax upon them in any shape, is within the constitutional prohibition...... 110. The law laid down in the above tw .....

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Court. Michelin Tire Corporation Vs. W.L. Wages, Tax Commissioner, 46 L.Ed. 2d 495 is the case which is relied upon by the counsel for the State. In the above case, respondent has imported tires and tubes from France and Nova Scotia. Thus, articles were included in an inventory maintained in a wholesale distribution warehouse in the county. The Tax Commissioner and Tax Assessors of Gwinnett County assessed ad valorem property taxes against inventory of imported tires and tubes. The petitioner ch .....

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his Court holding that the States are prohibited by the ImportExport Clause from imposing a nondiscriminatory ad valorem property tax on imported goods until they lose their character as imports and become incorporated into the mass of property in the State. The Court there reviewed a decision of the California Supreme Court that had sustained the constitutionality of California's nondiscriminatory ad valorem tax on the ground that the ImportExport Clause only prohibited taxes upon the chara .....

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uniformly critical of Low v. Austin. It is true that Mr. Chief Justice Marshall, speaking for the Court in Brown v. Maryland, supra, at 442, 6 L Ed 678 said that "while (the thing imported remains) the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the constitution." Commentators have uniformly agreed that Low v. Austin misread this dictum in holding that t .....

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Weitzman, A Century of Dissent: The Immunity of Goods Imported for Resale From Nondiscriminatory State Personal Property Taxes, 7 Sw U L Rev 247 (1975); Dakin, The Protective Cloak of the ExportImport Clause: Immunity for the Goods or Immunity for the Process?, 19 La L Rev 747 (1959). Our independent study persuades us that a nondiscriminatory ad valorem property tax is not the type of state exaction which the Framers of the Constitution or the Court in Brown had in mind as being an "impost .....

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criminatory state taxation against imported goods as imports, was not regarded as an impediment that severely hampered commerce or constituted a form of tribute by seaboard States to the disadvantage of the inferior States. It is obvious that such nondiscriminatory property taxation can have no impact whatsoever on the Federal Government's exclusive regulation of foreign commerce, probably the most important purpose of the Clause's prohibition. By definition, such a tax does not fall on .....

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t permits escape from uniform taxes imposed without regard to foreign origin for services which the State supplies..... 114. Referring to Brown Vs. The State of Maryland, it was further held: - The Court stated that there were two situations in which the prohibition would not apply. One was the case of a state tax levied after the imported goods had lost their status as imports. The Court devised an evidentiary tool, the "original package" test, for use in making that determination. Th .....

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y on imports to escape the prohibition in the constitution." Id., at 441442 6 L Ed 678. "It is a matter of hornbook knowledge that the original package statement of Justice Marshall was an illustration, rather than a formula, and that its application is evidentiary, and not substantive . . . . Galveston v. Mexican Petroleum Corp., 15 F2d 208 (SD Tex 1926). 115. The U.S. Supreme Court concluded by holding: Thus, it is clear that the Court's view in Brown was that merely because cert .....

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t;common mass of property in the country"; that is, treated it in a manner that did not depend on the foreign origins of the goods. 116. Only one more judgment of U.S. Supreme Court needs to be noticed is Joanne Limbach Tax Commissioner of Ohio Vs. The Hooven & Allison Company, 80 L.Ed. 2d 356. This Court referring to C. Adolph Low Vs. Austin (supra), Brown Vs. The State of Maryland (supra) and Michelin Tire Corporation Vs. W.L. Wages Tax Commissioner (supra) made following observations .....

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s, supra, an importer challenged the assessment of Georgia's nondiscriminatory ad valorem property tax upon an inventory of imported tires and tubes maintained at a wholesale distribution warehouse. This Court rejected the challenge to the state tax on the imported tires.1 It found that in the history of the ImportExport Clause, there was nothing to suggest that a tax of the kind imposed on goods that were no longer in import transit was the type of exaction that was regarded as objectionabl .....

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d exactions directed only at imports or commercial activities as such. The Court concluded that its reliance a century earlier in Low v. Austin "upon the Brown dictum . . . was misplaced." 423 US, at 283, 46 L Ed 2d 495, 96 S Ct 535. Chief Justice Taney's opinion in the License Cases, 5 How 504, 12 L Ed 256 (1847), was carefully analyzed, with the Court concluding that that opinion had been misread in Low. "Precisely contrary" to the reading it was given in Low, Chief Jus .....

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al Package Doctrine, it is useful to quote following observations of the Court: To repeat: we think it clear that this Court in Michelin specifically abandoned the concept that the ImportExport Clause constituted a broad prohibition against all forms of state taxation that fell on imports. Michelin changed the focus of ImportExport Clause cases from the nature of the goods as imports to the nature of the tax at issue. The new focus is not on whether the goods have lost their status as imports bu .....

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x could not be imposed until the imported goods had lost their status as imports by being removed from their original packages. This decision was among the progeny of Low v. Austin for it, too, was decided on the originalpackage doctrine. Thus, Hooven I is inconsistent with the later ruling in Michelin that such a tax is not an "Impost or Duty" and therefore is not prohibited by the Clause. Although Hooven I was not expressly overruled in Michelin, it must be regarded as retaining no v .....

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ld that imported goods are not immuned from nondiscriminatory ad valorem taxes imposed by the State. 119. Now, we come to the judgment of Federal Court and this Court wherein the aforesaid doctrine has been considered and specifically departed with. 120. Federal Court in the case of The Province of Madras Vs. Messrs. Boddu Paidanna and Sons.(supra) has noticed the case of Brown Vs. The State of Maryland (supra). The Federal Court held that in our Constitution no such question arises and made the .....

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e far wiser terms ; and it does not appear to us that it would necessarily follow from the principle of the Maryland decision that in India the payment of customs duty on goods imported from abroad or the payment of an excise duty on goods manufactured or produced in India can be regarded as conferring some kind of licence or title on the importer or manufacturer to sell his goods to any purchaser without incurring a further liability to tax. That was the view which commended itself to the Court .....

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original package doctrine has no application to this country. In the United States, the widest meaning could be given to the Commerce clause, for there was no question of reconciling that clause with another clause containing the legislative power of the State. Under the provisions of the Government of India Act, a limited meaning must be given to the word import in Entry 19 of List I in order to give effect to the very general words used in Entry 31 of List II. 122. One more judgment of this C .....

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e of Bombay v. F.N. Balsara..... 123. In view of the foregoing discussions, we conclude that goods imported after having been released from customs barriers are not immuned from any kind of State taxation, which fall equally on other similar goods and the submission of the learned counsel for the petitioner that immunity from State taxation shall continue till it reaches in the premises where it is to be taken for consumption, sale and use cannot be accepted. NONINCLUSION OF CUSTOM DUTY IN PURCH .....

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cise duties countervailing charges, sales tax, transport charges, freight charges and all other charges incidental to the purchase of such goods: Provided that where purchase value of any scheduled goods is not ascertainable on account of nonavailability or nonproduction of the original invoice or bill or when the, invoice or bill produced is proved to be false or if the scheduled goods are required or obtained otherwise than by way of purchase, then the purchase value shall be the value or the .....

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ed goods, generally include the entire value including the import duty or custom duty and in any event the inclusion of 'all other charges incidental to the purchase of such goods' has to necessarily mean all charges including custom duty which is incidental to the purchase. Thus, noninclusion of custom duty specifically in definition of purchase value in 2(j) is inconsequential and cannot lead to mean that the legislature never intended to include the imported goods under the entry tax .....

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ust 1984 it imported goods liable to octroi. The Corporation authorities claimed that the appellant was liable to include the customs duty paid by it in the valuation of the goods as it was a component of the value of the said goods for the purpose of Rule 17(a). The appeal filed by the appellant before the Civil Judge failed. The order was challenged by way of writ petition under Article 226 of the Constitution. The High Court negatived the claim. Rule 17(a) is extracted below : "17: Provi .....

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custom duty are not mentioned in the rule, it gave rise to an argument before the High Court and in this Court whether it could be included while determining the value under Rule 17. The High Court relying basically on the decision of this Court in Shroff & Co. v. Municipal Corpn of Greater Bombay, 1989 Supp(1) SCC 347 held that even though the customs duty was not mentioned in the rule yet it was liable to be included while determining the value under Rule 17. The learned counsel for the ap .....

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ty having not mentioned in Rule 17, no octroi is leviable on import of goods. The argument was repelled by this Court in para 4 of the judgment which is to the following effect: "4. Rule 17 provides for determination of value of goods brought inside the Corporation or Municipal Board for consumption, use or sale. The use of various words in the rule widens its scope. It provides for inclusion of cost price, charges such as freight, carrier, customs duties and then all other incidental charg .....

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goods. In any case, if duty countervailing could be considered to be incidental charges for importation, there is no valid reason to exclude custom duty from it. 127. We thus do not find any substance in the submission of petitioner that noninclusion of custom duty in definition of purchase value leads to conclusion that entry tax is not payable on entry tax. Whether entry tax legislations are not covered by Entry 52 List II? 128. Shri Ajay Agarwal one of the learned counsel for the writ petiti .....

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tion of tax in Article 366(28) contends that Constitution itself contemplates local taxes and tax under Entry 52 is nothing but local tax to be levied by local authorities for purpose of local area. The history of entry tax and legislative practice also leads to the same conclusion. The Government of India Act, 1935 included in the Provincial List Item No. 49 to the effect that 'Cesses on the entry of goods into a local area for consumption, use or sale'. 129. Neither the Government of I .....

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um Borough Municipality, Belgaum, AIR 1963 SC 906, had addressed the history of octroi and the constitutional entry regarding entry of goods. This Court has stated that Constitution has avoided the word 'octroi', in para 15 following has been mentioned: "15. It will be noticed that in the Government of India Act 'octroi' was named but not described and now the Constitution avoids the word 'octroi', as did the Government of India Act 1935 before, and gives a descripti .....

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t into a Municipal area for consumption or use or sale. It is not necessary to cite the Municipal Acts prior to 1935 but a reference to them will amply prove that such was the tax which was contemplated as octroi. 18. When the Government of India Act 1935 was enacted terminal taxes became a central subject, vide entry No. 58 of List I, which reads as follows: " 58. Terminal taxes on goods or passengers carried by railway or air." At that time, it was suggested by Sir Walter Leyton that .....

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tax was mentioned in entry No. 49, which has been quoted already, and which read "Cesses on the entry of goods into a local area for consumption, use or sale . This scheme has been repeated in the Constitution with the difference that the entry relative to terminal tax now reads "terminal taxes on goods and passengers carried by railway, sea or air", and the word "taxes" replaced the word "cesses" in the entry relative to octrois. 131. The distribution of legi .....

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olicy as to how the tax is to be collected. The definition of taxation as given in Article 266 (28) that tax includes general or local tax does not in any manner support the contention of the petitioner that tax under Entry 52 is only a local tax which ought to be collected through local bodies. It is the matter of legislative policy that whether a tax is collected as a general tax or a local tax. The nature of tax, measure of tax and machinery for tax collection are all different aspects. The s .....

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the use of word 'octroi' which has to be given a meaning and purpose. While interpreting a taxing entry no shackles can be put nor use of any expression in the Constitution of India, referring to a tax can be tied up to any preconstitutional tax or levy. Further, any pre-constitutional tax practice cannot put any fetter on Constitution farmers to define any tax, to elaborate the concept of tax or to move away or forward from any kind of earlier levy. This Court in Municipal Corporation .....

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orporations and other self governing institutions in our country. 134. Thus, taxes which are to be used by the local authorities can be collected by the local authorities as well as by the State Government. It is the matter of legislative policy as to how the tax is collected and distributed. Under List II Entry 5, the State has legislative power to lay down powers of the Municipal Corporation by legislation. It is again legislative policy that as what machinery is to be provided by the State le .....

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ACT 1999 136. Part II of the Schedule to the Orissa Act, 1999 provides Item 9 as follows: Item 9. Machinery and equipments [including earthmovers, excavators, bulldozers and roadrollers] [and spare parts and components] used in manufacture, mining, generation of electricity, or for execution of works contract or for any other purposes. 137. The submission which has been pressed by learned counsel for the petitioner is that the plant which is imported by petitioners in completely knocked out con .....

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rocess. Webster defines the word plant to be the fixtures and tools necessary to carry on any trade or mechanical business. The word is defined by Worcester to be The machinery, apparatus or fixtures by which a business is carried on . The word is not equivalent to the word undertaking , which is defined by Webster as any business, work or project which a person engages in or attempts to perform; enterprise . 139. The Plant in a knocked out condition is nothing but a collection of machineries. T .....

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the writ petitioners also needs to be noted. Section 4 of Bihar Act, 1993 as inserted by Bihar Act 19 of 2006 was also challenged on the ground that it violates constitutional provision of Article 266. Section 4 deals with utilization of the proceeds of the levy under the Act . Section 4 sub-section (1) provides that the proceeds of the levy under the Act shall be appropriated to the fund and shall be utilised exclusively for the development of trade, commerce and industry in the State of Bihar .....

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respective States. There are two reasons due to which the above submissions cannot be accepted. Firstly, Section 4 relates to creation of fund and utilisation of funds received from the collection of entry tax. The creation of fund and its utilisation can in no manner effect the levy of the entry tax and the compensatory tax theory having already negated by nineJudge Constitution Bench of this Court in Jindal Stainless (supra), the inquiry as to whether tax is compensatory or not is not relevan .....

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entral Act is invalid because the moneys raised by it are not dealt with in accordance with the provisions of Part XII generally or particularly the provisions of Article 266. We will, however, assume that such a plea can be raised by a citizen for the purpose of this appeal. Even so, it is difficult to understand how the Act can be said to be invalid because the cesses recovered under it are not dealt with in the manner provided by the the Constitution. The validity of the Act must be judged in .....

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validity of the Act itself. 141. Although learned counsel for the writ petitioners sought to distinguish the above decision on the ground that the said observations were made while the Court was considering the entirely different issue that is an issue relating to interse transfer of money from Consolidated Funds of respective States to Consolidated Fund of India. As per aforesaid judgment the challenge to the validity of the Act on the ground that it is violative of Article 266 was repelled. Wh .....

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of India. Learned counsel for the petitioners have relied on order of this Court in Civil Appeal No. 4756 of 2017, M/s Bharati Airtel Ltd vs. Assessing Authority Orissa Entry Tax & Anr dated 29.03.2017 as well as order of this Court in Civil Appeal Nos. 997998 of 2004, State of UP and Ors vs. M/s Indian Oil Corporation Ltd. & Etc dated 21.03.2017. It is submitted that this Court has granted liberty to petitioner to file fresh writ petition in order dated 29.03.2017 to raise question of .....

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conclusively laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We are thus of the view that liberty be given to petitioners to raise the plea of discrimination under Article 304(a) in accordance with the law as laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We, however, are of the view that for the above purposes, it is not necessary to grant any liberty to file a fresh writ petition at this stage and at this distance of time. The ends of justice shall be served, .....

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issa Entry Tax Act, 1999, Kerala Tax Act, 1994 and Bihar Tax on Entry of Goods in Local Area for Consumption, Use or Sale, 1993 (before its amendment by Bihar Act, 2003 and 2006) do not exclude levy of entry tax on the goods imported from any place outside territories of India into a local area for consumption, use or sale. (ii) All the Entry Tax Legislations questioned in these appeals are legislations which are within the legislative competence of the State legislatures and do not intrude the .....

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yland(supra) is not applicable in this country and the imported goods are not exempted from entry tax till it reaches to the factory premises/destination of its consumption, use or sale. (vi) Non inclusion of custom duty in the definition of purchase value in the statute of entry tax is not an indicator of the fact that legislature never intended to levy entry tax on imported goods. (vii) Entry tax legislation are fully covered by Entry 52 List II and the submission that essence of Entry 52 is o .....

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