2003 (3) TMI 744 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of assessment under Bihar Tax on Entry of Goods into Local Areas Act, 1993 - Contravention of Article 286(1)(a) of the Constitution of India - Availability of alternative remedy - Interpretation of entry tax on inter-State sale - Determination of entry tax on sale for consumption, use, or sale within local areas.

Analysis:
The petitioner contested an assessment order levying entry tax for the assessment years 1999-2000 and 2000-2001 under the Bihar Tax on Entry of Goods into Local Areas Act, 1993. The petitioner argued that the order contravened Article 286(1)(a) of the Constitution of India, asserting that entry tax on inter-State sale is not permissible. However, the Court noted that entry tax is a fee for the entry of goods into local areas for consumption, use, or sale therein, and is within the State Legislature's power under Entry 52 of List II of the Seventh Schedule of the Constitution. Therefore, the contention of violating Article 286(1)(a) in relation to entry tax was deemed unfounded, and the challenge on this ground was rejected.

The Court emphasized that not every sale in a local area is subject to entry tax under the Act. Sales must be intended for consumption, use, or sale within the local area or for consumption in other local areas to attract entry tax. Referring to a previous ruling, the Court highlighted that the authorities must determine whether the sale is connected to the specified purposes, and it is the dealer's responsibility to prove this to the assessing authority. This factual determination does not amount to a pure question of law warranting interference in writ jurisdiction, underscoring the importance of the authorities' competence to evaluate such matters based on established legal principles.

In conclusion, the Court directed the petitioner to pursue the remedy of appeal against the assessment order. If the authorities find that the sale does not align with the specified purposes, entry tax will not apply. The petitioner was granted a two-week window to file an appeal, with an assurance of condoning any delay due to the initial filing of the writ application. The Court instructed prompt disposal of any stay petition, emphasizing adherence to legal procedures. The writ application was disposed of with these directives, underscoring the significance of following the statutory appeal process in matters concerning entry tax assessments.