General Circular on Deferment from payment of Entry Tax in Punjab issued by Punjab Govt.

[AMIT BAJAJ ADVOCATE]

As we know the Hon’ble Punjab & Haryana High Court has already stayed the levy of entry tax in Punjab in the case of M/s Bhushan Steel v State of Punjab case on 28-03-2011 and also in other similar writ petitions challenging the levy of entry tax in Punjab on 08-04-2011 . But the interim stay were applicable only to the persons who have filed writ petitions and the relief regarding deferment from payment of entry tax was available only to the concerned persons who have filed writ petitions in the High court as a result it was giving rise to filing of more and more writ petitions on the similar issue resulting in multiplicity of litigation in the High Court. Hence in the order of 08-04-2011 the Hon’ble High court expressed its opinion as follows:
 “We are further of the view that to avoid multiplicity of litigation, the State Government may evolve an appropriate mechanism by way of issuing a general circular in terms of the interim order passed by this court to deal with all similarly placed persons, as for as possible on or before 30.4.2011.”                  

Considering the above comments of the Hon’ble High Court the requisite circular dated 29-03-2011 has been issued by the Punjab Govt. which is produced hereinafter for ready reference of all concerneds. After the said circular the dealers who have not filed writ petition in the High Court, can also get relief in respect of deferment from payment of entry tax until the final Judgment of the Punjab & Haryana High Court in the writ petitions already filed wherein interim stay has been granted. To get the abovesaid relief an undertaking, an Affidavit in the manner prescribed in the circular issued, has to be filed before the concerned A.E.T.C incharge of the District where the importer is registered. An indemnity bond alongwith each transcation at the ICC of entry point alongwith the other statutory documents presently being submitted, has also to be filed. It is to be noted that an Indemnity bond for each transaction at the ICC of entry point has to be submitted, in my view furnishing of separate indemnity bond for every transaction is bit too harsh for the importers. One Indenmity bond should have been allowed to be filed for all transactions, once an undertaking and affidavit is given by the importer.  

The Circular is as follows.

GENERAL CIRCULAR REGARDING PUNJAB ENTRY OF GOODS IN TO LOCAL AREAS ACT, 2000 , PUNJAB.

(N-1-2011spl./1-30 Dated 29^th April,2011)

As per the orders of Hon'ble Punjab & Haryana High Court in CM No.5160 of 2010 in amended CWP No. 15378 of 2008 delivered on 28-3-2011 and in  CWP Nos. 18609 of 2007, 578, 1670, 3342, 5537, 6705, 7099, 11542, 16081, 18991, 19001 of 2008, 5362, 9237, 9906 and 10334, 15493, 21494 of 2010, 6064, 6066 and 6379 of 2011 delivered on 8-4-2011, the Department has evolved an appropriate mechanism to facilitate the extension of the applicability of the interim order of the Hon'ble High Court to "similarly placed persons" who have not filed any writ petitions in the Hon'ble Court, and who desire to avail of the relief afforded to the petitioner. As per this the concerned persons are required to submit the following documents (to be furnished before the concerned authorities), namely-

1) UNDERTAKING (before the AETC incharge of the District where the importer is registered)

2) AFFIDAVIT (before the AETC incharge of the District where the importer is registered)

3) INDEMNITY BOND (alongwith each transcation at the ICC of entry point alongwith the other statutory documents presently being submitted.)  

A. VENU PRASAD

Excise & Taxation Commissioner, Punjab.

Copy to,-

1. The Director (Investigation) Punjab

2. All the Deputy Excise & Taxation Commissioners in the State

3. All the Assistant Excise & Taxation Commissioners in the State

4. All the Officers Incharge of the ICC's in the State

Enclosed,- UNDERTAKING, AFFIDAVIT , INDEMNITY BOND & copy of Amended CWP No. 15378 of 2008, CM No. 5160 of 2010 in this CWP alongwith orders in this CM and in the bunch of petitions referred to above.

UNDERTAKING 

I, authorized signatory  on and behalf of M/s.___________________________________________________________state ,-

1) That I am an importer of goods leviable to tax under the Punjab Tax on Entry of goods in to Local Areas Act, 2000 as defined in Section 2(e) of the Act and intend to import such goods into the State of Punjab and,-

(a) have filed writ petition No.______________ in the Punjab & Haryana High Court

(b) that I am importing goods for consumption, use or sale by a taxable person falling under the jurisdiction of AETC _____________ (Name of Excise and Taxation Department District) and my TIN No. is_______

[tick (a) or (b) as applicable]

2) That, I have duly filed the affidavit required by the Excise and Taxation Department, Punjab

3) That being a "similarly placed person" as sworn in the accompanying affidavit,  I wish to defer my liability to pay entry tax on import of goods into Punjab and in order that proper information is furnished and compiled at the concerned I.C.C. of the State, I undertake to file at the ICC, alongwith each transaction of such import, an indemnity bond in such proforma and containing such particulars as required by the Excise and Taxation Department, Punjab, in order to comply with the directions of the Hon'ble Punjab & Haryana High Court.

4) That in case of eventual dismissal of the writ petitions mentioned in the accompanying affidavit of the petitioners or in case of any directions to the effect by the competent Court, I undertake to pay the full amount of tax as compiled by the Excise and Taxation Department, alongwith interest as determined by the Hon'ble Court on all transactions for which indemnity bond has been furnished on behalf of M/s._____________________________________________, at the respective ICC's.

This undertaking is hereby furnished on the_________date of_________, _________(year) before the A.E.T.C. _______________(District of the Excise and Taxation Department)

for, _________________

      _________________

     __________________

(signatures)

Name 

Designation 

Stamp of Importer 

AFFIDAVIT

I, the Declarant, for and on behalf of M/s.____________________________________________ do hereby solemnly affirm and declare as under -

1.That I have examined the amended CWP 15378 of 2008 and CM number 5160 of 2010 in this petition and the orders of The Hon'ble Punjab & Haryana High Court in the case of Bhushan Power  & Steel Limited Versus The State of Punjab and another in C.M. No. 5160 of 2010 in amended C.W.P. No. 15378 of 2008, delivered on 28-3-2011 and in CWP Nos. 18609 of 2007, 578, 1670, 3342, 5537, 6705, 7099, 11542, 16081, 18991, 19001 of 2008, 5362, 9237, 9906 and 10334, 15493, 21494 of 2010, 6064, 6066 and 6379 of 2011, delivered on 8-4-2011.

2. That I have fully understood the legal implications of these above said orders and the legal requirements stipulated therein regarding the factual positions of the Declarant vis-a-vis the factual position of the petitioner M/s. Bhushan Power & Steel Limited in amended CWP No. 15378 of 2008 as averred by the petitioner in this writ petition and declare that the Declarant is " a similarly placed person" as M/s. Bhushan Power & Steel Limited. qua the arguments put forth by M/s. . Bhushan Power & Steel Limited in the amended CWP No. 15378 of 2008 apart from being a "concerned person" as construed from the meaning of this phrase in the order dated 28-3-11 referred to above.

3. That as stipulated by the Hon'ble High Court in its order dated 28-3-2011, I submit to the requirement of furnishing an undertaking, if so required, before the Hon'ble  High Court.

4. In the event of dismissal of the writ petitions of the petitioners in the above stated writ petitions, I as a "similarly placed person" agree to pay the full amount of entry tax due as compiled by the Department under the orders of Hon’ble High Court and to further pay such interest on such amount as may be directed by this Hon'ble High Court.

Deponent

on behalf of M/s. _________________________

_________________________

Designation __________________________

Verification

It is certified that the contents of paras No. 1 to 3 of the averments above are true to the best of my knowledge and belief and nothing has been concealed therein.

Date

Place

Deponent

INDEMNITY BOND 

It is for the information of all that I _________________ (Give full name and address of the taxable person) registered under the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005), in the State of Punjab vide Registration No.____________ dated the _______________ (hereinafter called the Obligor), am bound to the Government of Punjab (hereinafter called the Obligee), in the sum of rupees _________ (write rupees in words) (hereinafter referred to as 'the said sum') to be paid to the Government on demand  for which payment, I bind myself  and my heirs and assigns.

Signed this __________day of __________Two thousand and _________________.

Whereas in order to furnish information  of all transactions leviable to tax under the Punjab Tax on Entry Goods in to Local Areas Act 2000 at the concerned information collection centre of Punjab and to enable such information to be compiled by the Excise and Taxation Department, Punjab in order to comply with the directions of the Hon'ble Punjab & Haryana High Court, an indemnity bond is required to be furnished by the importer, who makes claim for deferring the collection of entry tax due under the charging sections of the Punjab Tax on Entry of goods in to Local Area Act,2000.

Whereas, the obligor has imported goods___________________ (specific goods) leviable to tax under the Punjab Tax on Entry of Goods in to Local Area Act, 2000 of value Rs.__________________(value is to be calculated as per section 2(o) of the Act upon which entry tax is calculated at Rs._____________.

Whereas, in case of any loss to the Government, which shall be decided by the Government, or by the authority appointed by it, for the purpose of calculating the quantum of such loss, shall be final and binding on the obligor.

Now, the condition of this Indemnity Bond is such that, the obligor shall in the event of any loss caused to the Government for failure to deposit such entry tax, pay to the Government on demand and without demur, the said sum of rupees ______________ (write rupees in words)

IN WITNESS WHEREOF the obligor has set his hand/or his authorized representative on the day, month and the year written above, in the presence of :-

1.__________________

2.__________________

(Obligor's Signature) 

Accepted for and on behalf of the Obligee by name and designation of the officer duly authorized to accept the indemnity Bond for and on behalf of the Government of Punjab. In the presence of :-

1.__________________

2.__________________

(Signature of the Designated Officer with name, designation and seal)"