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JAMMU & KASHMIR HIGH COURT
Muzaffar Hussain Attar, J.
VIOM Networks Limited & Others -Appellant
Versus
State of J. & K. and Anr. -Resopndent
OWP No. 725 of 2008
Decided On : 06-02-2012
Jammu and Kashmir Entry Tax on Goods Act, 2000 - Validity - Article 301 - [TAXATION] - [REGULATORY MEASURE] - [Jammu and Kashmir General Sales Tax Act, 1962, Jammu and Kashmir Value Added Tax Act, 2005, Jammu and Kashmir Motor Spirit and Diesel Oil (Taxation of Sales) Act, Samvat 2005] - The court upheld the validity of the Jammu and Kashmir Entry Tax on Goods Act, 2000 as a regulatory measure, not impeding the free flow of trade and commerce, and therefore not violating Article 301 of the Constitution of India. The Act was enacted to regulate the conduct of traders and prevent tax evasion, rather than to augment state revenue. The court also dismissed the argument of double taxation, stating that the provisions of the Act of 1962 and Act of 2000 operate in different circumstances. The judgment referred to various legal provisions and judgments, including the Constitution of India, to support its decision.
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 State argued that the Act was a regulatory measure to prevent tax evasion and did not impede the free flow of trade and commerce.
Finding of the Court:
The court found that the Jammu and Kashmir Entry Tax on Goods Act, 2000 was a regulatory measure and did not violate Article 301 of the Constitution of India. It upheld the validity of the Act and dismissed the petitions.
Issues: The main issue was the validity of the Jammu and Kashmir Entry Tax on Goods Act, 2000 and its compliance with Article 301 of the Constitution of India.
Ratio Decidendi: The court held that the Act was a regulatory measure aimed at preventing tax evasion and did not impede the free flow of trade and commerce, thus not violating Article 301 of the Constitution of India.
Final Decision: The court dismissed the petitions challenging the validity of the Jammu and Kashmir Entry Tax on Goods Act, 2000, and ordered the petitioners to pay costs to the State, to be spent on the welfare of orphaned children.
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/body 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 tele-communication services, manufacturers, franchisers, dealers, importers, exporters, assemblers, fabricators, repairers, maintainers, owners and operators of all kinds of tele-communication 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(
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