TMI Blog2019 (4) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case, the fact of the entry of goods into the local area is not in dispute but the question is as to whether the entry point could be created at the point marked ‘A’ as per the diagram only to avoid the entry tax being levied including the VAT as indicated in the invoice when crude oil continues to pass through the pipeline without any check being made at point ‘A’. The point of delivery in the local area will have to be considered as the entry of goods to the local area. If that be the position, even if the contention that the processing is to be done at the refinery and only thereafter VAT would be payable is taken note of, the same is also incidental to the purchase, irrespective of the fact as to whether the same is included in the invoice or not it would get attracted. The value of the VAT also would, therefore, get included in the import value for the purpose of processing the entry tax as it would fall under “other charges incidentally levied on the purchase of such goods” which is paid or payable. Revision petition dismissed. - Case No. : Revn.Pet. 1/2017 - - - Dated:- 28-2-2019 - Chief Justice Mr. A.S. Bopanna And Mr. Justice Arup kumar Goswami For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment as made by including the VAT amount also for the purpose of calculation of the entry tax, is justified. In that view, the petitioner claiming to be aggrieved by the same is before this Court in these petitions. 5. From the contentions as urged, the fact that the petitioner is purchasing crude oil from Oil India Ltd. in the instant case and the same is supplied through pipeline from Duliajan to the refinery of the petitioner at Numaligarh is the accepted position and the said two places are situated in different local area is the factual position. The position is also that the petitioner is liable to pay the entry tax as the crude oil supplied from one local area will enter another local area though through the pipeline, thus making the petitioner liable to pay the entry tax. The charging Section under the Entry Tax Act, namely, Section 3 of the Act which provides for levy of tax states that there shall be levy and collection of the entry tax on the entry of the specified goods into any local area for consumption, use or sale therein at the rate respectively specified against each item in the Schedule. The entry tax shall be leviable on the import value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of purchase value. It is in that light contended that when there is no such specific indication in the Entry Tax Act , the levy on entry tax even on that component is not justified. 8. The contention on behalf of the respondents is that firstly, as per the provision as contained in Section 2 (f) of the Entry Tax Act , it provides for the value of the goods ascertained from the original invoice as the import value. In that light, it is contended that in a circumstance where in the instant case the invoice for the crude oil supplied as at Annexure-P-I indicates the value by including the VAT at the rate of 5%, the requirement under the Act would get attracted and the entry tax would become liable to be paid by the petitioner on such value. Even otherwise, when as per the contract the supply of crude oil is made through the pipeline and vendor is situated at Duliajan, one local area and the petitioner is in Numaligarh, another local area, which admittedly are two different local areas, the sale of the crude oil from one local area and purchase of the same in another local area would attract the entry tax on the entire value including the VAT. In such circumstance, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidiary points were sought to be made en passant by Mr. S. T. Desai and a brief mention of them would be in order. It was urged that there is a certain amount of vagueness in Section 3 inasmuch as no light is thrown by the words of the section or the other provisions of the Act on the question as to computation of tax to be made at specified percentage ad valorem without specifying which price is to be taken into consideration for levy of tax, namely, the sale price or the purchase price of the concerned scheduled goods. It was said that sale price and purchase price of a dealer would be different and in the absence of any guideline in the charging section or any other provision in the Act it would lead to arbitrary determination or computation of tax by taking in one case sale price of the scheduled goods and in another case purchase price . The contention overlooks the specific guideline to be found in the charging section itself. The taxing event is the entry of scheduled goods into a local area. The tax becomes payable on the entry of scheduled goods in a local area. Therefore, the price of the scheduled goods at the time of entry paid by the dealer who is the importer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increase due to various factors. Hence, he further contends that it is held that the price of the scheduled goods paid at the time of entry by the dealer who is the importer of the goods within the scheduled local area would be the value for ad valorem tax to be computed. No subsequent rise or fall in price has any relevance to the computation of the entry tax. However, from the decision cited supra, it is noticed that what was in issue before the Hon ble Supreme Court was the challenge to the validity of the Karnataka Tax on Entry of Goods into Local Area for Consumption, Use and Sale Therein Act, 1979. In the circumstance where a contention was raised that the provision as contained is arbitrary, ultra-vires inasmuch as there is no certainty with regard to the value that would be taken for the purpose of charging the ad valorem entry tax, the High Court in that context had left it to the option of the purchaser to pay the ad valorem entry tax either on purchase value or the sale value, whichever is beneficial to the purchaser. The Hon ble Supreme Court in that context, had arrived at the conclusion that the value to be taken cannot be indefinite as permitted by the High Court. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question, non-inclusion of custom duty is indicator of fact that the legislature never intended to levy entry tax on the imported goods. In that background what was considered is that under the provision, to determine the import value, whether custom duty , though was not included as one of the items in the Section, can also be included for the purpose for determining the value for charging the entry tax by bringing it under the other charges contained in the Section. The Hon ble Supreme Court in that regard having taken note of the definition of purchase value and after noticing that custom duty was not included specifically, was of the opinion that, thirdly, other charge incidental to the purchase of such goods is provided for. It was noticed that the original invoice of the bill of the Schedule goods generally included 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 necessarily means all charges including custom duty which is incidental to the purchase. It was, therefore, held that in such case the non-inclusion of customs duty specifically in the definition of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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