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2006 Supreme(Gau) 1011
IN THE HIGH COURT OF GAUHATI
Iqbal Ahmed Ansari, J.
Primus Imaging Pvt. Ltd. – Appellants
Vs.
State of Assam and Anr. – Respondent
Decided On: 17.11.2006
The main legal point established in the judgment is that the State has the legislative competence to levy entry tax on goods imported into a local area from outside the State for use, consumption, or sale therein, as provided under Section 3 of the Assam Entry Tax Act, 2001.
Headnote:
Entry Tax - Competency of State to levy entry tax on imported goods - Assam Entry Tax Act, 2001 - Section 3
Fact of the Case:
The case involved a challenge to the vires of the Assam Entry Tax Act, 2001, and a notification imposing entry tax on imported goods. The petitioners, running medical diagnostic clinics, imported sophisticated equipment from outside the country and were subjected to levy under the Act.
Finding of the Court:
The court found that the State is competent to levy entry tax on goods imported into a local area from outside the State for use, consumption, or sale therein, as provided under Section 3 of the Assam Entry Tax Act, 2001.
Issues: The main issue was whether the State had the legislative competence to impose entry tax on goods imported from outside the country.
Ratio Decidendi: The court interpreted Article 286 of the Constitution of India and clarified that the restriction on the State's power to levy tax on the sale or purchase of goods did not extend to the entry of goods into a local area for consumption, use, or sale therein. The court also emphasized the clear language of the statute and the legislative intent in determining the scope of the entry tax.
Final Decision: The imposition of entry tax on the imported goods was set aside and quashed, and the respondents were directed not to insist on payment of entry tax by the petitioners.
I.A. Ansari, J.
1. These writ petitions raise an issue of grave importance, and the issue is this whether the State is competent to levy entry tax on the goods imported into a local area from outside country ?
2. The Assam Entry Tax Act, 2001, (in short, 'the AET Act') was enacted by virtue of Entry 52 of List-II of the Seventh Schedule of the Constitution of India. The said AET Act provides for a levy of tax on the entry of goods into any local area for consumption, use or sale therein. Section 3 of the Act is the charging section, which reads as follows:
3. Levy of Tax. - (1) There shall be levied and collected an entry tax on the entry of the goods specified in the Schedule into any local area for consumption, use or sale therein at the rates shown against each item in the said Schedule and such tax shall be paid by every importer of such goods.
The entry tax payable by an importer under this Act shall be charged on the purchase value of the goods specified in the Schedule at the rates as shown in the said Schedule:
Provided that no such tax shall be payable on the entry of the goods which are meant or the exclusive use or consumption of the Defence Department of the Government of India:
Provided further that no entry tax shall be levied on the entry of the goods into any local area for consumption or use therein which are the exclusive property of the Union Government.
Provided also that no such tax shall be payable on the entry of such goods which are brought for the purpose of sale or use under the Assam Public Distribution of Articles Order, 1982.
Provided further more that no tax shall be levied under this section on the entry of Scheduled goods into a local area, if it is proved to the satisfaction of the assessing authority in such manner as may be prescribed, that such goods have already been subjected to entry tax or that the entry tax has been paid by the importer or any other person under the Act in respect of the same goods.
(3) The State Government may, by notification in the Official Gazette, grant exemption to any organization or undertaking of the Central Government or of the State Government in respect of such goods as may be specified in such notification, from payment of entry tax on entry of such goods into any local area for consumption or use therein provided that such goods are the exclusive property of such organization or undertaking.
(4) The State Government may, by notification in the Official Gazette, add to, delete, amend or otherwise modify the said Schedule and also may very the rates of tax of the goods specified in the Schedule and thereupon the said Schedule shall be deemed to have been amended accordingly.
(5) The State Government, if considers it necessary in the public interest so to do, may by notification in the Official Gazette, subject to such conditions and restrictions as it may impose, exempt any importer or class of importers, fully or partially from payment of entry tax on any specified good and the State Government also grant such exemption retrospectively:
Provided that the State Government may withdraw any such exemption at any time, as it may think fit and proper.
3. The words "entry of goods into a local area" is defined by Section 2(1)(b) of the AET Act as under:
2(1)(b). "Entry of goods into a local area" with all its grammatical variations and cognate expressions means entry of the goods as specified in the Schedule into a local area from any place outside that local area including a place outside the State for consumption, use or sale therein:
Provided further that in the case of specified goods both old and new which are being imported into any local area for use therein for a specified period and are taken back after completion of there use, the purchase value shall be,
Period of use of the specified goods in years X value of the specified goods/life of the specified goods in years.
4. It is Section 2(d), which defines the word "importer". The definition of the word "importer"
