2024 (3) TMI 844 - HC - VAT and Sales Tax

Jurisdiction Of Authorities - Imposition of entry tax on Indian Made Foreign Liquor ('IMFL') - not placed item in the schedule to the New Act - replacement of the New Act as earlier Act has been declared ultra virus by the High Court - liability non est in law - HELD THAT - It is clear that the provisional assessment was done as per the earlier Act of 2000 while final assessment has been done under the New Act. The Appellate Authority while passing the order dated December 31, 2022 has not considered the arguments placed by the petitioner with regard to the absence of goods in question in the schedule. It is to be noted that if the goods in question are not in the schedule of the New Act, the authorities had no jurisdiction whatsoever to impose entry tax on the same. This question is going to the very root of the matter and the authority should have considered and answered the same. Thus, the orders passed are bereft of any reason with regard to imposition of entry tax on IMFL that is not even an item in the schedule to the New Act. Thus, impugned orders are unreasoned and have been passed in a non speaking manner. Accordingly, the impugned order dated December 31, 2022 is quashed and set aside. The instant writ petition is allowed.

Summary

Issues:
The issues involved in this judgment are the validity of the orders passed for recovery of entry tax under the Uttar Pradesh Entry of Goods into Local Area Tax Act, 2000, and subsequent proceedings under the Uttar Pradesh Entry of Goods into Local Area Act, 2007, specifically related to the imposition of tax on Indian Made Foreign Liquor (IMFL) which is not listed in the schedule of the New Act.

Validity of Provisional and Final Assessment Orders:
The petitioner challenged the final assessment order for recovery of entry tax under the New Act, contending that IMFL, the goods in question, is not included in the schedule of the New Act. The counsel for the petitioner argued that the entire proceedings leading to the liability are without legal basis due to the absence of IMFL in the New Act's schedule. The State relied on Sections 17 and 18 of the New Act to validate actions taken under the earlier Act.

Jurisdictional Issue and Lack of Reasoning:
The Court considered whether the authorities acted lawfully in passing the impugned orders. It noted that the provisional assessment was conducted under the earlier Act, while the final assessment was done under the New Act. The absence of IMFL in the New Act's schedule raised a jurisdictional question regarding the imposition of entry tax on such goods. The Court found the orders lacking reasoning for imposing tax on IMFL not listed in the schedule, deeming them unreasoned and passed in a non-speaking manner.

Judgment and Directions:
The Court quashed the impugned order and directed the authority to provide the petitioner with another opportunity for a hearing. The authority was instructed to pass a reasoned order specifically addressing the imposition of tax on goods not mentioned in the New Act's schedule. The parties were permitted to submit relevant documents and judgments. The Court mandated the completion of this process within three months, with the petitioner receiving a copy of the reasoned order within a week. The writ petition was allowed with no costs imposed.