2011 (3) TMI 1726 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to orders for recovery of entry tax and interest u/s 8 of Act of 1993 and Section 39(4) of Act of 2005 for HDPE/Plastic Containers imported for packaging Lichi Pulp.

Judgment Summary:

The petitioner, a dealer challenging recovery orders u/s 8 of Act of 1993 and Section 39(4) of Act of 2005 for entry tax on HDPE containers imported for packaging Lichi Pulp, raised three main contentions. Firstly, lack of notice before assessment u/s 25 of Act of 2005, secondly, the containers being HDPE not plastic, and lastly, containers not consumed in Bihar as packed product exported. Additionally, challenge on interest recovery as Act of 1993 doesn't provide for it.

The Court analyzed the legal framework, noting the continuity of powers u/s 8 of Act of 1993 from Act of 1981 even after its repeal. It held that whether containers were plastic or HDPE is immaterial for tax liability. As containers were used for packaging in Bihar, they were deemed consumed there, attracting entry tax u/s 3 of Act of 1993.

Regarding interest recovery, the Court agreed with petitioner's argument that Act of 1993 doesn't authorize it. Thus, the petition was partially allowed, upholding entry tax assessment but quashing interest recovery orders. The assessing authority was directed to modify orders within two months in line with the judgment.

In conclusion, the petition was allowed partially, with each party bearing their own costs.