TMI Blog2018 (10) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... the local area - Entry tax is payable once either u/s. 3(1) or u/s. 3(2) of the Entry Tax Act by dealer or any person. Whether the Assesse being service provider not a dealer is liable to pay Entry Tax u/s. 3(1) or u/s. 3(2) of the Entry Tax Act? - Held that:- The Division Bench of this Court in the case of Sanjay Trading Co. V/s. Commissioner of Sales Tax others [1994 (2) TMI 284 - MADHYA PRADESH HIGH COURT], had held that M.P. Entry Tax Act is intended to levy Entry Tax on entry of specified goods into the local area for consumption, use or sale. The Entry Tax is not a tax on goods, but a tax on entry of goods into the local area for particular purpose. The Entry Tax is not a part and parcel of VAT Act, where a dealer who is covered under the VAT Act is only liable to pay Entry Tax. Any businessman who brings the goods for consumption, use or sale is liable to pay Entry Tax whether he is a dealer under the VAT Act or not because, provisions of u/s. 3(2), are applicable to such person who is not engaged in any business and simply brings the goods within the local area for any purpose. Section 3(1) is applicable to those persons who are engaged in the business and effectin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W.P. No.6304/2011 has been filed by the Assesse being aggrieved by order dated 29.3.2010 passed by Assessing Authority and order dated 30.4.2011 passed by the Appellate Authority, by which, entry tax has been imposed under the M.P. Entry Tax Act for the for the period 2007-2008 over various goods like building material, plant machinery, computer hardware, computer software, furniture fixers, office-equipment, vehicle, CWIP plant machinery, SIM cards, recharge voucher, marketing material, etc. brought within the local area. W.P. No.6645/2012 has been filed by the Assesse being aggrieved by assessment order dated 16.4.2012 passed by the Assessment Authority, by which, entry tax has been imposed over various goods brought within the local area under the M.P. Entry Tax Act for the for the period 2009-2010. W.P. No.2760/2014 has been filed by the Assesse being aggrieved by assessment order dated 21.12.2012 passed by the Assessment Authority, by which, entry tax has been imposed over various goods brought within the local area under the M.P. Entry Tax Act for the for the period 2008-2009. W.P. No.8408/2013 has been filed by the Assesse being aggrieved by assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Act, 2002 against the order dated 22.7.2012 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2003-2004 (entry tax). VATA No.2/2015 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 3.9.2015 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2004-2005 (entry tax). VATA No.3/2015 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 6.4.2015 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2005-2006 (entry tax). T.R. No.108/2017 , T.R. No.109/2017 and T.R. No.110/2017 are references sent to this Court by M.P. Commercial Tax Appellate Board, Bhopal vide order dated 26.12.2014 respectively for the period 1.4.1998 to 31.3.1999; 1.4.1999 to 31.3.2000; and 1.4.2000 to 31.3.2001 on following substantial questions of law : 1. Whether the appellant who is engaged in the activity of providing telecommunication services to its customers not involving any activity of buying, selling, supplying or distributing of goods can be said to be a dealer carrying on business within the meaning of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hroughout the country. That while obtaining the registration the Assesse Company has declared its activity as that of providing telecommunication service as its principal activity. The Assesse obtained the aforesaid registration as a matter of abundant caution which cannot be presumed that it has accepted the applicability of the Commercial Tax Act and the Central Sales Tax Act as there is no business of sale and purchase. The Apex Court in case of Bharat Sanchar Nigam Limited and Others Vs. Union of India Others, reported in (2006) 145 STC 91 has already held that mobile service is nothing but an electromagnetic waves and radio frequencies which do not constitute goods and no sale of goods as such is involved in the activity of providing telecommunication services. In order to provide the telecommunication services to its users, the telecommunication equipment, plant, machinery were brought within the local area of the State from outside place of Madhya Pradesh even from the outside of India. Such incident of taxation is under the MP Entry Tax Act is upon the dealer who is defined under the MACT / VAT Act and who in course of its business effects the entry of goods into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al commodity does not constitute either used or consumption in the course of business by the dealer, hence, imposition of entry tax and penalty is wholly unjustified and arbitrary. 6. After notice, the State Government filed the return by submitting that the writ petition is not maintainable in which the Assesse has directly approached this Court against the assessment order or against the order passed by the first appellate authority without resorting the remedy of second appeal to the appellate board, hence, petition is liable to be dismissed on this preliminary grounds. On merit, it is submitted that the Assesse is engaged in the business of providing telecommunication services and purchased the goods in the course of business and also consuming/using such goods in order to provide the telecommunication services is definitely liable to pay the Entry Tax. The scope of definition of Business under Clause (d) Section 2 of the MP VAT Act, 2002 is very wide and according to which any transaction of sale or purchase of good in connection with or incidental or ancillary to the trade, commerce, manufacture adventure or concerned are within the purview of Entry Tax. In order to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer and liable to pay Sales Tax/Commercial Tax. Thereafter Apex Court in case of Bharat Sanchar Nigam Limited (Supra) has held that the electromagnetic waves and radio frequencies do not constitute goods and no sale of goods as such is involved. The Assesse has brought various plants and machineries, electronic equipment etc. for installation in the State of Madhya Pradesh for the purpose of setting up the telecommunication network, but the Assesse is neither a dealer, nor carrying on business as defined under the MPCT Act, hence, not liable to pay the Entry Tax in its return. Since, the Assesse is not covered by charging section; no assessment could be made against it. According to Shri Nema, learned senior counsel appearing on behalf of the Assesse, Section 3 of the MP Entry Tax Act is a charging section and any person settled with the liability under the Act, must be shown that he falls within the charging section. Section 2(2) of the MP Entry Tax Act incorporates the definition of MP VAT Act, 2002 and according to which, any person who carry on the business of buying, selling, supplying and distribution of goods is a dealer. Since, the Assesse company is engaged in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 that SIM Card is nothing but device which helps the service provider to identify the subscriber. It has been observed that service provider also enables the subscriber to receive the service by means of electromagnetic waves, hence, the SIM card cannot be termed to be a good and even under Article 366 (12) SIM is not good as it has no intrinsic value and are not marketable or transferable, hence, the questions of law framed by this Court is liable to be answered in favour of the Assesse and impugned orders passed by the Assessment Officer and Appellate Authority are liable to be set aside. 10. Shri Nema learned senior counsel also addressed us on the point that Art. 286 of the Constitution of India does not permit the State to levy tax on sale and purchase on the goods which takes place in the course of import or export out of territory of India. The word including a place outside the state do not mean outside the country . 11. Per contra , Shri Romesh Dave, learned Government Advocate appearing for the respondents/State of M.P. and ors. refuted the arguments of Shri Nema and argued that the Assesse company is still having the permanent registration certificate wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he limits of city for consumption, use or sale and the Taxing Authority well within its power can levy LBT on SIM card and recharge voucher for SIM card and physical form. The provisions of Entry Tax Act are identical to the provisions of Section 127 of the Maharashtra Municipal Corporation Act, 1949. In view of the above, the issue is no more resintegra , hence, petitions as well as appeals are liable to be dismissed. 14. We have heard the learned counsel, gave anxious consideration to their submissions and perused the material available on record. 15. The core issue which is required to be answered first is that a dealer registered under the VAT Act, 2002 is only liable to pay Entry tax u/s. 3(1) of the Entry Tax Act. According to the Assesse it is company providing service not doing the business of sale and purchase of goods, therefore, not liable to pay Entry Tax also. The Madhya Pradesh Legislature has brought the Entry Tax Act in order to levy a tax on entry of goods into a local area of Madhya Pradesh for consumption, use or sale therein. Before coming into force of Entry Tax Act w.e.f. 2.10.1976, all local authorities used to collect Octroi on entry of any goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l area for consumption, use or sale therein. As per Clause (iii) of Section 3(1), on entry of goods specified in Schedule-III, for consumption or use of such goods, but not for sale therein, there shall be a levy of Entry Tax. Therefore, as per Section 3(1), the Entry Tax is chargeable on a dealer if he brings the goods in his course of business within the local area either for sale, use or consumption as per Schedule-II or Schedule-III. Under sub-section (2)(a) of Section 3, the Entry Tax is payable on entry of such goods specified in Schedule-II and III by such person or class of person as notified by the State Government. As per proviso appended to Section 3(2), that if it is proved before the Assessing Authority that such goods have already been subjected to Entry Tax by any other person or dealer under this Act, then there shall be no levy of Entry Tax on a person or class of persons. Thus, it is clear that Entry tax is payable once either u/s. 3(1) or u/s. 3(2) of the Entry Tax Act by dealer or any person. 18. Shri Sumit Neema, learned senior counsel appearing for the Assesses, has rightly submitted that Section 3(1) is applicable to a registered dealer and Section 3(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of dealer is not confined to the business of selling and buying; it is also an activity of supplying or distribution of goods for cash or other valuable consideration. Sec2(i) of VAT Act defines the word Dealer which is as follows: (i) Dealer means any person, who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes - (i) a local authority, a company, an undivided Hindu family or any society (including a co-operative society), club, firm or association which carries on such business; (ii) a society (including a co-operative society), club, firm or association which buys goods from, or sells, supplies or distributes goods to its \members; (iii) a commission agent, broker, a del-credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of the principal; (iv) any person who transfers the right to use any goods including leasing thereof for any purpose, (whether or not for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the form of second hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or waste material; and (b) goods which are obtained as waste products or by-products in the course of manufacture or processing of other goods or mining or generation of or distribution of electrical energy or any other form or power; Therefore, the Assesse is covered under the provisions of Section 3(1) of Entry tax Act . 22. The Assesse is providing service of telecommunication and in order to do the business, brings the plant machinery, equipment, etc. to the local area for the use and consumption, therefore, Assesse is subjected to the liability of Entry Tax. The main concern of the Assesses is in respect of payment of Entry Tax on a SIM Card. As held by the apex Court in the case of BSNL (supra), the SIM Card is not goods and the company is not engaged in the business of selling the SIM Card. The contention of the Assesse that the goods has not been defined in the Entry Tax Act, but defined under the VAT Act. As per Entry 52 List II of Seventh Schedule of Entry Tax Act, the tax on an entry of a goods into the local area for consumption, use or sale therein. As per Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing for determination before us, cannot be determined by reference to definitions given in other statutes. This we say for more reasons than one. Firstly, none of the statutes referred to by Shri Iyer, the learned Senior Counsel, can be called statutes in pari materia. Secondly, it is common knowledge that the definition coined by the legislature for the purpose of a particular enactment is often an extended or artificial meaning so assigned as to fulfil the object of that enactment. Such definitions given in other enactments cannot be freely used for finding out meaning to be assigned to a term of common parlance used in an altogether different setting. And lastly, as Justice G.P. Singh points out in Principles of Statutory Interpretation (9th Edn., 2004, at p. 163): [I]t is hazardous to interpret a statute in accordance with a definition in another statute and more so when such statute is not dealing with any cognate subject or the statutes are not in pari materia. 24. The Division Bench of Bombay High Court in its recent judgment passed in case of Bharti Airtel Ltd. V/s. Mira Bhayandar Municipal Corporation. : 2017 SCC OnLine Bom. 8555 = 2018 (3) Mah. Law Journal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registration under the VAT Act and supplied the list of goods chargeable under the VAT Act. One hand assesse is counting with dealer registration certificate and other hand challenging the applicability of VAT Act and Entry Tax. 25. That as per definition of 2(1)(aa) entry of goods into a local area means entry of goods into that local are from any place outside hence assesse is liable to pay entry tax on goods brought from outside . Hence Entry tax is chargeable on entry of good into local area brought from outside other than that local area. The Division Bench of this Court in the case of Sanjay Trading Co. V/s. Commissioner of Sales Tax others : (1994) STC 589, had held that M.P. Entry Tax Act is intended to levy Entry Tax on entry of specified goods into the local area for consumption, use or sale. The Entry Tax is not a tax on goods, but a tax on entry of goods into the local area for particular purpose. Hence it is immaterial whether good is coming from place outside the state or outside the country. 26. In case of DDA v. Bhola Nath Sharma,reported in (2011) 2 SCC 54 the apex court has explained the word includes used in definition clause and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 695, para 23) 23. when in the definition clause given in any statute the word means is used, what follows is intended to speak exhaustively. When the word means is used in the definition it is a hard-and-fast definition and no meaning other than that which is put in the definition can be assigned to the same. On the other hand, when the word includes is used in the definition, the legislature does not intend to restrict the definition: it makes the definition enumerative but not exhaustive. That is to say, the term defined will retain its ordinary meaning but its scope would be extended to bring within it matters, which in its ordinary meaning may or may not comprise. Therefore, the use of the word means followed by the word includes in [the definition of banking company in] Section 2(bb) of the ID Act is clearly indicative of the legislative intent to make the definition exhaustive and would cover only those banking companies which fall within the purview of the definition and no other. 27. In N.D.P. Namboodripad v. Union of India13 the Court observed: (SCC p. 509, para 18) 18. The word includes has different meanings in different contexts. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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