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Entry Tax - Legislative competence of the State Legislature toimpose Entry Tax on goods imported from outside the countryentering into local area of the State - Held: The import of goods from any territory outside India comes to an end when the goodsenter into the custom frontiers of India and are released for homeconsumption -After import of goods is complete, the State legislaturehas fall legislative competence to levy entry tax under Entry 52 List11 - The submission that essence of Entry 52 is octroi which can belevied only by local authorities and State has no legislative competence to impose entry tax under Entry 52 List 11 is fallacious- Constitution of India - Seventh schedule, List II, Entry 52 - OrissaEntry Tax Act, 1999 - Kera/a Tax Act, 1994 - Bihar Tax on Entry ofGoods in Local Area for Consumption, Use or Sale, 1993 - UttarPradesh Tax on Entry of Goods into Local Area Act, 2007 -Uttarakhand Tax on Entry of Goods into Local Areas Act, 2009 -s.2(1)(c) - West Bengal Tax on Entry of Goods into Local AreasAct, 2012 - s.2(1)(c).Entry Tax - State Legislations on levy of Entry Tax on goodsimported from outside the country entering into local area of theState - Held: Orissa Entry Tax Act, 1999, Kera/a Tax Act, 1994 andBihar Tax on Entry of Goods in Local Area for Consumption, Useor Sale, 1993 (before its amendment by Bihar Act, 2003 and 2006)do not exclude levy of entry tax on the goods imported from anyplace outside territories of India into a local area for consumption,Entry Tax - Taxable event - Entry 52 provides a legislativefield, namely, 'taxes on the entries of goods into a local area forconsumption, use or sale therein' - The charging event arises onentry of scheduled goods into a local area - The origin of goods has no relevance with regard to changeability of entry tax - Anygoods which are entering into a local area of a State whether comingfrom another local area of State, any other State or outside thecountry, the charging event is same for all goods entering into localarea - Constitutions of India - Seventh Schedule, List II, Entry 52.B Entry Tax - Taxable event - Custom duty vis-a-vis entry taxon imported goods - Held: The event for levy of customs duty, whichis in the domain of the Parliament, is entirely different from that ofevent of entry tax - The liability to pay Stale entry tax arises onlywhen goods enter into a local area for consumption, use and sale,which event is entirely different and separate from the levy of acustoms duty, which is on import - The taxing event pertaining tolevy of entry tax occurs only after the taxing event of levy of customsduty is over.Entry Tax - Whether doctrine of original/unbroken packageas evolved by the American Court are to apply with ·regard to imported goods and thereby prohibiting the State from levying anytax till the goods are first sold/dealt by the importer - Held: TheOriginal Package Theory as developed by the American SupremeCourt in case of Brown v. State of Maryland is not applicable inIndia and the imported goods are not exempted from entry tax till it E reaches to the factory premises/destination of its consumption, useor sale.Entry Tax - Non-inc/usicn of custom duty in the definitionof purchase value in the statute of entry tax - Held: Such non-inclusion is not an indicator of the fact that legislature neverintended to levy entry tax on imported goods.Constitution of India - Seventh Schedule, List I, Entry 41and 83 - Entry Tax Legislation - Whether intr11de into exclusivelegislative Joma.in of Parliament as reserved imder Entry 41 andEntry 83 List I - '1fe/d: Entry tax legislation s do not intrude in theG legislative field reserved for Parliament under Entry 41 and underEntry 83 of Lisi I - The State Legislature is fully competent to imposetax on the entry of goods into a local area for consumption, saleand use - Orissa Entry Tax Act, 1999 - Kera/a Tax Act, 1994 -Bihar Tax on Entry of Goods in Local Area for Consumption, Useor Sale, 1993.Constitution of India - Art.286 - Restriction on imposition under Entry 52 List II - Held: The restriction in the legislativepower of the State as contained in Art.286 is with regard to taxingon sale or purchase of goods which takes place outside the State orin the course of import of the goods or services or export of goodsor services - The restriction of Art.28.6 ipso facto cannot be placed while considering the legislative field of the State under Entry 52and by virtue of Art.286, no restriction can be put on the legislativecompetence of the State in the field as defined under Entry 52.Tax/Taxation - Nature of tax - Held: It is well settled that thenomenclature or form of a tax is not a decisive factor to find out thenature of the tax - It is the matter of legislative policy as to how thetax is to be collected.Tax/Taxation - Entry tax - The definition of taxation as givenin Art.266(28) that tax includes general or local tax does not in anymanner support the contention of the petitioner that tax under Entry52 is only a local tax which ought to be collected through localbodies - It is the matter of legislative policy that whether a tax iscollected as a general tax or a local tax - The nature of tax, measureof tax and machinery for tax collection are all different aspects - Itis well within the jurisdiction of the legislature to formulate its policyregarding levy qftax and its collection - No capital can be made onthe submission that since tax is not being collected by localauthorities it is beyond the power of the State under Entry 52 ListII.Interpretation of statutes - Taxation laws - While interpretinga taxing entry, no shackles can be put nor use of any expression inthe Constitution of India, referring to a tax can be tied up to anypre-constitutional tax or levy - Further, any pre-constitutional taxpractice cannot put any fetter on Constitution framers to defineany tax, to elaborate the concept of tax or to move away or forwardfrom any kind of earlier levy.Interpretation of statutes - It is well known rule of statutoryinterpretation that by process of interpretation. the provision cannotbe re-written nor any word can be introduced.Interpretation of Constitution - In deciding whether anyparticular enactment is within the purview of one Legislature or the other, it is pith and substance of the legislation that has to be lookedinto - Whenever a legislation is challenged as being under thecompetence of the State Legislature, the test, that one must find outby applying the rule of pith and substance that whether thelegislation falls with in any of the List JI, if it does, no further questionarises and attack on the ground of legislative competence must fail.Orissa Entry Tax Act, 1999 - ss.2(d), 3 - Whether Entry TaxLegislations contemplated levy of Entry Tax on imported goods -Held: Jn s.2(d), the word used is 'any place outside that local areaor outside the State' - The word 'any' is a word of very wide meaningand use of word 'any' excludes any limitation - All the threelegislations clearly did not exclude goods coming from outside theterritory of India and the definition of entry of goods read withcharging section clearly included all goods entering into a localarea - The expression "any place" before the words "outside theState" is also indicative of wide extent - The words 'any place'cannot be limited to a place within the territory of India when nosuch indication is discernible from the provisions of the Act - Thus,the submission that entry tax legislation did not include importedgoods cannot be accepted - Kera/a Tax Act, 1994 - Bihar Tax onEntry of Goods in Local Area for Consumption, Use or Sale, 1993.Orissa Entry Tax Act, 1999 - Schedule, Part JI Item 9 - Plantimported in knocked out condition - Whether covered by expression" machinery and equipment" as used in the schedule of Orissa Act,1999 ·- Held: The Plant in a knocked out condition is nothing but acollection of machinery - Machinery and equipment are widewords which shall also cover plant in a knocked out condition -Thus, a plant which is imported in knocked out condition is coveredby the Part JI of Schedule of Orissa Act, 1999.Bihar Tax on Entry of Goods in Local Area for Consumption,Use or Sale, 1993: s.4 as inserted by Bihar Act 19 of 2006 - Pleaof petitioner that s.4 indicates that the tax levied under the Act wouldG be collected and kept in a separate fund which is contrary to theconstitutional mandate of Art.266 which mandates that all publicmoney must be credited to consolidated fund of respective State -Held: s.4 relates to creation of fend and utilisation of funds receivedfrom the collection of entry lax - The creation of fund and itsutilisation can in no manner effect the levy of the entry tax and the compensatory tax theory having already negated by nine-JudgeConstitution Bench of this Court in Jindal Stainless, the inquiry asto whether tax is compensatory or not is not relevant ~ Constitutionof India - Art.266.Words and phrases - Word 'any' - Connotation of - Held:Word 'any' is a word of very wide meaning and excludes anylimitation.Words and phrases - Import and export, concept - In thecontext of Art.286 of Constitution of India, discussed - CustomsAct, 1962 - ss.2(23), 2(25), 2(26). |
