TMI Blog2023 (5) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Bench has relied, inter alia, on the State of Kerala and ors. vs. Fr. William Fernandez and ors [[ 2017 (10) TMI 491 - SUPREME COURT] ], in which the contention based upon such legislations being beyond the legislative competence of the State under Entry 52, List II of the Seventh Schedule, was rejected. Having regard to the decision of the Constitution Bench in Fr. William Fernandez and ors, and Hindustan National Glass Industries Ltd., and by following the reasoning therein - Petition dismissed. - WRIT PETITION NO. 541 OF 2010 WITH WRIT PETITION NO. 542 OF 2010 - - - Dated:- 24-4-2023 - M.S. SONAK VALMIKI SA MENEZES, JJ. For the Petitioner : Mr Shivan Desai, Advocate. For the Respondents : Mr Suhas Parab, Addl. Govt. Advocate Ms Sapna Mordekar, Addl. Govt. Advocate. ORAL JUDGMENT : (Per M.S. Sonak, J.) 1. Heard Mr Shivan Desai for the Petitioners, Mr Suhas Parab, learned Addl. Govt. Advocate for the Respondents in Writ Petition No. 541/2010 and Ms Sapna Mordekar, learned Addl. Govt. Advocate for the Respondents in Writ Petition No. 542/2010. 2. Since common issues of law and fact arise in both petitions, they are disposed of by a comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erce and intercourse. Finally, they urge that there are no circumstances to save such a levy under Article 304 of the Constitution. 9. The Petitioners urge that the tax levy for entry of goods into a local area directly impedes the freedom of trade guaranteed under Article 301 of the Constitution. Since there are no features essential to save such a levy under Article 304(b), the levy of tax under the impugned Act is wholly unconstitutional, null and void. 10. The Petitioners urge that the impugned Act textually and contextually excludes imported goods from its purview. Yet, the State authorities insist upon the levy of entry tax on imported goods, and such levy is ultra vires the impugned Act and 301 of the Constitution of India. 11. The Petitioners rely on Atiabari Tea Co. Ltd. vs. State of Assam AIR 1961 SC 232, Automobile Transport Ltd. vs. State of Rajasthan AIR 1962 SC 1406; Bhagatram Rajiv Kumar vs. Commissioner of Sales Tax, M.P. - 1995 Supp. (1) SCC 673 , Godfrey Phillips India and anr. vs. State of U.P. and ors. - (2005) 2 SCC 515 and State of Bihars and ors. vs. Bihar Chamber of Commerce and ors (1996) 9 SCC 136 12. The learned Additional Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not produced within the taxing State. 1159. 8. Article 304(a) frowns upon discrimination (of a hostile nature in the protectionist sense) and not on mere differentiation. Therefore, incentives, set-offs etc. granted to a specified class of dealers for a limited period of time in a non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a) . The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 1160. States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken would not contravene Articles 304(a) of the Constitution. The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 1161. The questions whether the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country are left open to be determined in appropriate pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al area. This would result in a duplication of administration and taxation, which the State chose to do away with by levying entry tax on the first entry of the goods into a local area in the State. 63. In Jaika Automobiles vs State of Maharashtra 1992 Mah LJ 1658, this Court in paragraph No.23 has observed as follows : 23. Ground (d) Submission of the Petitioner is that there is in the field a tax in the nature of octroi duty imposed under the various municipal laws made under entry 542, List II and hence impost referable to that very entry amounts to double taxation and hence is bad in law. The submission is wholly misconceived. In the first place, there is neither constitutional nor statutory bar in express terms prohibiting levy of double taxes. Article 265 of the Constitution only mandates that, no tax shall be levied or collected except by authority of law . Upon same object and person, separate taxes can be imposed for different purposes by the same authority or by different authorities. Last word on the topic can be found in recent decision of the Supreme Court in the case of Sri Krishna Das v. Town Area Committee (1990) 183 ITR 401 SC, wherein it is obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of goods brought into a local area of the State and those already in such local area by virtue of being manufactured or produced there. The Petitioner's submission regarding the grant of exemptions and set off ignore the fact that the proviso to Section 3(5) of the Entry Tax Act clarifies that dealers who are registered under the MVAT Act and are importing goods into a local area covered by the Entry Tax Act for the purpose of resale or export are liable to pay entry tax if the goods are not resold and are dealt with in any other manner. Notably, such registered dealers would; be liable to pay VAT or Central Sales Tax to the Revenue at the time of the resale since the MVAT Act and Central Sales Tax Act also apply to the local areas within the State covered by the Entry Tax Act. Such importers are, accordingly, placed on the same footing as other dealers who sell or buy; goods within the State. Instead of levying entry tax on such dealers and then granting a set-off, the Legislature has opted to grant a conditional exemption under Section 3(5) of the MVAT Act. The grant of such an exemption is neither discriminatory nor unconstitutional. The Petitioner's submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on similar goods. 67. Article 286 comes into operation only when there is imposition of tax on sale or purchase of goods and not when tax is sought to be imposed on entry of the goods into local areas within the State, as in the present case. Article 304(a) does not fetter the States from ensuring an equality in the rate of tax levied on goods that are imported from other states and goods manufactured or produced within the State. Since, under the Entry Tax Act and MVAT Act, the rate of tax on specified goods which are imported into the local areas in the State of Maharashtra is brought at par with the rate on similar goods manufactured or produced in the State of Maharashtra, there is no infirmity in the provisions of the Entry Tax Act whether as alleged or at all. There is no unfair or arbitrary classification whether as alleged or at all. 68. ... 69. 70. The Act in no way makes any discrimination against the local purchases and importers much less any hostile discrimination. The importers are given input tax credit of Entry Tax Paid to the Government against the VAT liability and balance is payable or refundable as the case may be. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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