Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2012 Supreme(J&K) 1

JAMMU & KASHMIR HIGH COURT
Muzaffar Hussain Attar, J.
VIOM Networks Limited -Appellant
Versus
State & Anr.[And connected matters] -Resopndent
OWP No. 725/2008 CMP No. 1459/2008, OWP No. 726/2008 CMP No. 1460/2008, OWP No. 761/2009 CMP No. 1083/2009, OWP No. 914/2009 CMP No. 1413/2009, OWP No. 364/2010 CMP No. 612/2010, OWP No. 11/2009 CMP No. 14/2009, OWP N0.998-J/2008 & OWPNo.992-J/2008
Decided On : 01-01-2012

Advocates Appeared:
Mr. Z. A. Shah, Sr. Advocate with Mr. Asif Maqbool , Umais Kawoosa, Mr. Sachin Sharma, Advocate Mr. Subash Dutt, Advocate Mr. Sunil K. Jain, Advocate Mr. Momin Khan vice Mr. Javaid Iqbal, Adv. for Petitioners.
Mr. M. L. Verma, Sr. Advocate with Mr. M. I. Qadri, Advocate General Mr. T. H. Khawaja, Advocate, Mr. Satvik Verma, Advocate, for Respondents.

The impugned Act of 2000 is a regulatory measure, thus Article 301 of the Constitution is not attracted.

Headnote:
Jammu and Kashmir Entry Tax on Goods Act, 2000 - Validity - Article 301 - [TAXATION] - [REGULATORY MEASURE] - [Article 301, Section 2(b), 2(d), 2(e), 2(h), 2(2), 3, 6 of the Act of 2000, Part XIII of the Constitution of India, Section 5 of the Constitution of J&K] - The court held that the impugned Act of 2000 is a regulatory measure, thus Article 301 of the Constitution is not attracted. The Hon'ble Supreme Court in Automobile Transport's case by judicial engineering made it permissible for the State to legislate a law which is either regulatory or compensatory in nature. This issue is not before the larger bench of the Hon'ble Supreme Court.
Fact of the Case:

The petitioners challenged the validity of the Jammu and Kashmir Entry Tax on Goods Act, 2000, claiming it violated Article 301 of the Constitution of India. The petitioners were telecom service providers and infrastructure companies, subject to entry tax under the Act. The State argued that the Act was a regulatory measure to prevent tax evasion.
Finding of the Court:

The court found that the Act of 2000 was a regulatory measure and did not impede the free flow of trade, thus not violating Article 301. The court dismissed the petitions and ordered the petitioners to pay costs to the State for the welfare of orphaned children.
Issues: Validity of Jammu and Kashmir Entry Tax on Goods Act, 2000 under Article 301 of the Constitution of India.
Ratio Decidendi: The impugned Act of 2000 is a regulatory measure, thus Article 301 of the Constitution is not attracted.
Final Decision: The court dismissed the petitions and ordered the petitioners to pay costs to the State for the welfare of orphaned children.

1. The validity of Jammu and Kashmir Entry Tax on Goods Act, 2000 (for short "Act of 2000") is called in question in all these petitions. Petitioners have filed these petitions with the prayer that the said Act be declared unconstitutional on the principle ground that it violates the mandate contained in Article 301 of the Constitution of India. Since a common thread is running through all these petitions they were heard together and are being disposed of by this common judgment.

2. Viom Networks Company Ltd. is petitioner in OWP No. 725/2008. It is a limited company incorporated under the provisions of Companies Act, 1956 (for short Act of 1956). As pleaded in the writ petition, petitioner-company is primarily engaged in building infrastructures in telecom sector and also provides infrastructure to various telecom service providers.

3. Dish-net Wireless Ltd. has filed OWP No. 988J/2008 and claims to be a subsidiary company of M/s Aircel Ltd. which is providing GSM Mobile Services in the State of J&K under brand name of Aircel. Petitioner-company is providing GSM Mobile Service and procures required telecom equipment parts, towers, accessories etc. being mobile goods as well as consumable goods.

4. Bharti Tele-media Ltd has filed OWP No. 364/2010. It is a limited company incorporated under the provisions of Act of 1956. Petitioner-company provides Direct to Home (DTH) satellite television service in the State of J&K. Petitioner-company requires network equipment for providing DTH service which include Dish Antenna, Set top box, Cable, Connector, LNBF, Viewing Cord and remote control. These equipments are brought in the State for providing services.

5. Cellular Idea Ltd. has filed OWP No. 761/2009. It is a limited company incorporated under the Act of 1956. The said company in order to conduct its business imports goods into the State of J&K.

6. Bharti Infratel Ltd. has filed OWP No. 914/2009. It is a limited company and is incorporated under the Act of 1956. The main object of the petitioner's company is to carry on business of establishing, operating, maintaining and managing wireless communications towers either on its own or in alliance with any other person body/bodies corporate incorporated in India or abroad either under a strategic alliance or joint venture or by any other arrangement. This company in order to conduct its business imports goods into the State of J&K.

7. Bharti Airtel Company Ltd. has filed OWP No. 11/2009. The said company also provides telecom services and in order to effectuate the aforementioned purpose, goods/equipments are imported into the State of J&K.

8. Tata Tele Services Ltd. has filed OWP No. 726/2008. The main object of the company is to carry on business of providing basic telecommunication services, manufacturers, franchisers, dealers, importers, exporters, assemblers, fabricators, repairers, maintainers, owners and operators of all kinds of telecommunication equipments, cryptographic equipment which includes terminator equipment, exchange equipment, subscriber end equipment and equipment of all kinds which is being used to provide voice text data or image communication services etc. Petitioner-company in order to carry on its business is importing goods into the State of J&K.

9. Reliance Communication Ltd. has filed OWP No. 992J/2008. It is limited company incorporated under the Act of 1956. This company is engaged in providing telecom services. For effectively carrying on its business, the company is importing goods into the State of J&K.

10. The majority of the petitioner-companies are telecom service providers and other companies are providing the infrastructure facilities to these companies. In terms of the Act of 2000, petitioner companies have been brought under the entry tax net. Petitioner companies are registered with the competent authority under the J&K General Sales Tax Act, 1962 (for short Act of 1962), Value Added Tax, 2005 (for short Act of 2005).

11. Section 2(h) of the Act of 2000

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