2006 (11) TMI 596 - HC - VAT and Sales Tax

Summary

Issues involved: Dispute regarding the demand for entry tax on wheat purchased by a company from the Food Corporation of India (FCI) u/s Assam Entry Tax Act, 2001.

Summary:
The petitioner, a company procuring wheat from FCI for public distribution, challenged the demand for entry tax by FCI after completing the transaction. The petitioner argued that FCI cannot pass on the entry tax liability to them as the sale was already concluded. The court examined the relevant provisions of the Assam Entry Tax Act, 2001, emphasizing that entry tax is imposed on the importer of goods for consumption, use, or sale in a local area. The court ruled in favor of the petitioner, stating that FCI cannot demand entry tax as the price of wheat after the sale transaction is completed. The judgment set aside the demand for entry tax and directed FCI not to insist on payment from the petitioner.

Key Points:
- The petitioner, a company procuring wheat from FCI, challenged the demand for entry tax after completing the transaction.
- The court clarified that entry tax is imposed on the importer of goods for consumption, use, or sale in a local area.
- FCI cannot pass on the entry tax liability to the petitioner after the sale transaction is concluded.
- The judgment set aside the demand for entry tax and directed FCI not to insist on payment from the petitioner.