2007 (7) TMI 617 - HC - VAT and Sales Tax

Summary

Issues: Challenge to order for entry tax collection and refund, interpretation of the Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001, applicability of Division Bench judgment.

Analysis:
The writ petition was filed to challenge an order for the collection of entry tax and seek a refund. The petitioners, who are manufacturers of mild steel products, were made liable to pay entry tax for importing M.S. Ingots from other states. The respondent determined the purchase price of the ingots and collected tax accordingly. The petitioner argued that the impugned order contradicted a Division Bench judgment, which held the levy of entry tax as illegal and violative of the Constitution. The Additional Government Pleader acknowledged the Division Bench decision and agreed to set aside the impugned order. The court, following the Division Bench judgment, overturned the order for entry tax collection.

The Division Bench judgment in ITC Limited v. State of Tamil Nadu deemed the levy of entry tax on goods from other states and abroad as discriminatory and violative of constitutional provisions. It concluded that the entry tax was not compensatory in nature and was illegal. The court directed the quashing of demand and collection notices related to entry tax. The respondent, in this case, accepted the applicability of the Division Bench decision and agreed to set aside the impugned order. The court, in line with the Division Bench ruling, annulled the order for entry tax collection.

Regarding the refund of entry tax, the court directed the respondent to consider the petitioner's representation for refund and pass appropriate orders within six weeks. The court did not award any costs in the matter. The judgment emphasized adherence to the law and principles established by the Division Bench decision, ensuring the proper application of legal provisions and constitutional safeguards in matters concerning entry tax collection and refund.