The main legal point established in the judgment is that the exemption notification must be strictly construed and defined according to legislative intendment.

JUDGMENT

M. S. Sonak, J. - Heard Mr Sudesh Usgaonkar with Ms R. Pereira, learned counsel for the Petitioners and Mr D. Pangam learned Advocate General, along with Mr Deep Shirodkar, learned Additional Government Advocate for the Respondents.

2. The Petitioners, by instituting the present petition, challenge the order dated 05.01.2006 made by the Commissioner of Commercial Taxes (R-2) confirming the communication/decision dated 11.08.2005 made by R-3, declining the tax concession for imported goods under item 9 of exemption notification No.5/11/2002 dated 19.05.2003 issued under Section 25(1) of the Goa Tax on Entry of Goods Act, 2000 ( Entry Tax Act).

3. The Petitioners amended this petition, among other things seeking a declaration that the State and its authorities were not competent to levy entry tax on imported goods. The Petitioners also sought a refund of entry tax paid by them under protest regarding imported goods under item 9 of the notification dated 19.05.2003 referred above.

4. Mr Usgaonkar, however, made it clear that the Petitioners were not pressing the contention about the competence of the State and its authorities to levy entry tax on imported goods given the decision of the Hon'ble Supreme Court in the State of Kerala and others Vs Fr. William Fernandez and others (2021) 11 SCC 705. In this case, the Hon'ble Supreme Court has held that the import of goods from any territory outside India ends when the goods enter the customs frontiers of India and are released for home consumption. After the import of goods ends, the State Legislature has complete legislative competence to levy entry tax under Entry 52, the Seventh Schedule to the Constitution of India. The Court held that the original package theory developed by the American Supreme Court in Brown Vs Marylandis [6 L Ed 678] is not applicable in India, and the imported goods are not exempted from entry tax until they reach factory premises/destination for their consumption, use or sale.

5. Accordingly, the only issue which arises for consideration in this petition is the legality and validity of the impugned orders dated 11.08.2005 and 05.01.2006, by which the R-2 declined to extend the benefit of exemption/concession notification dated 19.05.2003 on the vehicles imported by the Petitioners. The Petitioners paid entry tax of Rs.3,02,201/- and Rs.8,89,074/- under protest and, therefore, have sought a refund of these amounts. Such an issue arises in the facts referred to hereafter.

6. The Petitioners imported two Honda cars and one Toyota Camry car in 2005 under the Export Promotion Capital Goods (EPCG) Scheme. This scheme, formulated by the Central Government, allowed the import of capital goods at 5% customs duty subject to the export obligation equivalent to 8 times the duty saved on capital goods imported under the said scheme to be fulfilled over a period of 8 years. This scheme was amended vide notification No.28(IE-2003)/2002-07 dated 28.01.2004 by the Central Government permitting the import of motor cars, sports utility vehicles/all-purpose vehicles for hotels, travel agents, tour operators whose foreign exchange earning in the current licencing year or preceding 1/2/3 licencing years was Rs.1.5 crores.

7. In terms of the Entry Tax Act, 2000, which entered into force from 01.09.2000, there shall be a levy of tax to regulate the use of facilities, infrastructure etc., provided in the State of Goa on entry of goods into its local areas for consumption, use or sale therein.

Accordingly, the entry tax payable for motor vehicles was 12%.

8. The Petitioners have pleaded that under the mistake of law that the motor vehicles imported by it were chargeable to entry tax, the Petitioners on 20.07.2005 informed the Respondent No.3 about import and requested tax assessment in terms of the notification dated 19.05.2003 issued by the State Government under Section 25(1) of the Entry Tax Act.

9. Respondent No.3 vide impugned order dated 11.08.2005 declined the benefit of the c