Entry tax is a tax on the entry of goods into a local area for specific purposes, not a tax on goods. Entry tax does not discriminate between goods manufactured or produced within the State and those imported from outside. Entry tax is compensatory in nature, intended to compensate municipalities for the loss of octroi revenue. Entry tax does not offend articles 286(3), 301, or 304 of the Constitution.

U. L. BHAT, C.J. - These writ petitions which have been heard together and are being disposed of by a common order since common questions of law arise therein, have been filed by dealers in sugar, tobacco or iron and steel.

2. The Sales Tax Officers concerned have been levying entry tax under provisions of the Entry Tax Act, 1976, on the turnover of the petitioners in regard to the above goods. According to the petitioners, this is illegal and, therefore, they seek the following reliefs :

(a) Declaration that levy of entry tax is violative of the provisions of the Constitution and beyond the legislative competence of the State;

(b) declaration that the provisions of the Entry Tax Act, 1976, are ultra vires the provisions of article 286(3) and entries 92-A and 92-B of List I of the Seventh Schedule to the Constitution as also articles 301 and 304 of the Constitution;

(c) declaration that levy of entry tax on the above goods is ultra vires the charging section; and

(d) consequential reliefs such as quashing notices requiring them to deposit tax, prohibiting the Sales Tax Officers from proceeding with the pending assessment; restraining them from levying tax on the petitioners and directing them to refund tax illegally collected.

3. Respondents have filed returns as well as additional submissions. Additional submissions have been filed on behalf of the petitioners in some other cases. Shri M. S. Choudhary, learned counsel for the petitioners in some of the petitions who led the arguments and counsel in other petitions, made the following submissions in the course of their arguments :

(i) Dealers in the aforesaid goods are not covered by section 3 of the Entry Tax Act which is the charging section.

(ii) In view of the provisions of the Central Sales Tax Act, 1956, levy of tax on first purchase outside the State is hit by article 286(3) of the Constitution.

(iii) Levy on the aforesaid goods amounts to levy of consignment tax in the guise of entry tax and offends entry 92-A of List I of the Seventh Schedule to the Constitution.

(iv) The scheme of levy of entry tax under the Entry Tax Act discriminates between goods manufactured inside the State and goods imported from outside the State, thereby offending articles 301 and 304 of the Constitution, the conditions laid down in which have not been satisfied.

4. The first submission made on behalf of the petitioners is that liability under the Entry Tax Act arises only in the case of a dealer liable to pay tax under the Sales Tax Act; that in regard to goods covered by these cases, no dealer is liable to pay tax under the Sales Tax Act and hence no dealer is liable to pay entry tax in relation to such goods.

5. Section 3 of the Entry Tax Act deals with incidence of taxation. Sub-section (1) deals with the entry of two kinds of goods, viz., all goods specified in Schedule II on one hand and all goods specified in Schedule III on the other. In case of goods specified in Schedule II, entry in the course of business of a dealer into each local area for consumption, use or sale therein is the taxable event. We do not propose to refer to the provisions regarding goods specified in Schedule III, as it is not necessary for the purposes of these cases. According to sub-section (1), entry tax is to be paid by every dealer liable to tax under the Sales Tax Act who has effected entry of such goods. Item 3 of Schedule II refers to iron and steel; item 8 refers to cotton fabrics, item 11 refers to sugar and item 12(ii) refers to tobacco. Thus on the entry in the course of business of a dealer of these goods into each local area for consumption, use or sale, entry tax becomes leviable and every dealer liable to tax under the Sales Tax Act who has effected entry of the goods, shall pay the tax.

6. In this connection, we may also refer to sub-section (4) of section 3 which states that no entry tax shall be payable on the goods specified in Schedule I. Schedule I deals with goods specified in Sche