2017 (3) TMI 1917 - SC - VAT and Sales Tax

Levy of Entry Tax - violation of Article 301 meaning thereby it will not be treated as a hindrance in trade commerce and intercourse - HELD THAT - In some of the cases particularly in the writ petition filed by M/s. Vedanta Aluminium Ltd. this issue was specifically raised in the High Court out of which SLP(C) No. 8199 of 2008 arises. But the High Court did not decide it. Instead the High Court in the impugned judgment has gone by the rate of Entry Tax vis-a-viz the rate of VAT/Sales Tax. Since in order to decide the question proper pleadings are required which are not before us it may not be possible for this Court to decide the issue. In these circumstances we permit the Appellants/Assessees to file fresh writ petitions with adequate material in the High Court. These petitions shall be filed within four weeks. The interim order passed in these cases shall continue for a period of four weeks. We make it clear that if the applications for stay are filed before the High Court the High Court shall be competent to decide these applications on their own merits and would not influenced by continuation of stay granted by this Court as these stay orders were granted before answering the reference by the Nine Judge Bench and we have continued the same for four weeks only to enable the Assessees to approach the High Court in the meantime. The interim orders dated 03.02.2010 were passed in these cases directing the Appellants to pay 33% of the tax - in many other cases coming from other States interim stay was given subject to deposit of 50% of the tax amount. Appeal disposed off.

Summary

Issues:
Challenge to judgment dated 18th February, 2008 regarding imposition of levy or tax not violative of Article 301. Interpretation of Article 304(a) of the Constitution of India. Challenge to findings of High Court regarding Entry Tax not being discriminatory. Validity of provisions of Orissa Entry Tax in light of recent clarifications. Modification of interim orders directing payment of tax. Expedited disposal of petitions by High Court.

Analysis:
1. The judgment dealt with appeals challenging a previous judgment where a batch of writ petitions were dismissed. The High Court summarized its findings regarding the imposition of levy or tax not violative of Article 301, suggesting three alternatives for a non-discriminatory levy or tax. The State's plea under Article 304(a) was discussed, emphasizing the non-discriminatory nature of the tax imposed under the Orissa Entry Tax Act. The judgment noted that some issues were decided against the State, leading to the State's appeals being allowed based on a previous Nine Judge Bench ruling.

2. The Assessees challenged the findings of the High Court regarding the non-discriminatory nature of the Entry Tax under Article 304(a). The Court considered the rate of Entry Tax and the benefits of VAT to determine non-discrimination. The Jindal Stainless Steel case was referenced, addressing the grant of exemption or credit on equivalent goods and the non-discriminatory nature of such provisions.

3. The Court allowed the Assessees to file fresh writ petitions with proper pleadings to address the validity of the Orissa Entry Tax Act in light of recent clarifications. Interim orders directing payment of tax were modified to require 50% payment within two weeks. The High Court was urged to expedite the disposal of these petitions within six months.

4. The judgment emphasized the need for proper pleadings to address the validity of the tax provisions, allowing the Assessees to file fresh petitions. The modification of interim orders highlighted the requirement for payment of 50% of the tax amount within a specified period. The directive for expedited disposal by the High Court aimed to resolve the issues promptly.

5. In conclusion, the judgment addressed various legal issues related to the imposition of taxes and the non-discriminatory nature of such levies under constitutional provisions. It provided directions for further legal proceedings and modifications to interim orders, ensuring a fair and efficient resolution of the matters at hand.