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2020 (5) TMI 520 - HC - VAT and Sales TaxValidity of Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1959 (Act 18 of 2002) dated 26.05.2002, w.e.f. 01.04.2002 - ilevy of tax on imported goods at 20 % vide Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1959 (Act 18 of 2002) dated 26.05.2002, w.e.f. 01.04.2002 as substituted by Tamil Nadu General Sales Tax (Seventh Amendment) Act, 1959 (Act 22 of 2002) inserting Section 3(2-C) and Eleventh Schedule (Item 9) to the Tamil Nadu General Sales Tax Act, 1959 dated 26.05.2002, w.e.f. 01.07.2002 - Agreement dated 28.02.1995 on Trade and Commerce between the Government of Kindom of Bhutan and the 3rd respondent Union of India. HELD THAT - The decision cited by the petitioner in the context of anti-dumping duty in the case of COMMISSIONER OF CUSTOMS, BANGALORE VERSUS M/S. G.M. EXPORTS OTHERS 2015 (9) TMI 1162 - SUPREME COURT is of no relevance. There the Supreme Court was concerned as to whether anti- dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid? - In the said decision there is no reference to the decision of the Division Bench of this court in SONY INDIA LTD. VERSUS COMMERCIAL TAX OFFICER, CHENNAI 2007 (9) TMI 530 - MADRAS HIGH COURT though it was stated by the learned counsel for the petitioner. The decision of the Honourable Supreme Court in JINDAL STAINLESS LTD. AND ANR. VERSUS STATE OF HARYANA AND ORS. 2016 (11) TMI 545 - SUPREME COURT is also of no relevance to the facts of the present case as it was concerned with entry tax. The issue canvased by the petitioner here has already been negatived by the Division Bench of this Court in the above case. The issue having attained finality in Sony India Ltd and others Vs. CTO, it is no longer open for this court to either refer the issue to a Division Bench of this Court or take a contra view - learned counsel for the petitioner has also neither produced any other decisions of the Hon'ble Supreme Court which has taken a contrary view nor has produced any order of the Hon'ble Supreme Court staying operation of the decision of the Division Bench of this court in Sony India Ltd and others Vs. CTO. Petition dismissed.
Issues Involved:
1. Constitutionality of the Tamil Nadu General Sales Tax (Fourth and Seventh Amendment) Acts, 2002. 2. Applicability of the amendments in light of the Agreement on Trade and Commerce between Bhutan and India. 3. Discrimination and violation of constitutional provisions. Issue-wise Detailed Analysis: 1. Constitutionality of the Tamil Nadu General Sales Tax (Fourth and Seventh Amendment) Acts, 2002: The petitioner challenged the levy of a 20% tax on imported goods under the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1959 (Act 18 of 2002) and the Tamil Nadu General Sales Tax (Seventh Amendment) Act, 1959 (Act 22 of 2002), arguing that these amendments were ultra vires the Constitution of India. The amendments inserted Section 3(2-C) and the Eleventh Schedule to the TNGST Act, specifying a 20% tax on certain imported goods. The court noted that the amendments were within the legislative competence of the state and did not violate any constitutional provisions. 2. Applicability of the Amendments in Light of the Agreement on Trade and Commerce between Bhutan and India: The petitioner argued that the amendments were not applicable due to the Agreement on Trade and Commerce between Bhutan and India, which stipulated free trade between the two countries. The petitioner contended that the amendments were contrary to the bilateral agreement and discriminatory. However, the court held that the state's power to levy sales tax on imported goods was not curtailed by the agreement. The court referenced the decision in Sony India Ltd. vs. CTO, which upheld the state's power to classify imported goods separately and levy higher sales tax rates. 3. Discrimination and Violation of Constitutional Provisions: The petitioner argued that the amendments imposed a discriminatory tax rate on imported goods, violating Articles 14, 301, and 304 of the Constitution of India. The petitioner relied on various Supreme Court decisions, including Ansraj vs. State of Tamil Nadu and Jindal Steel (P) Ltd vs. State of Haryana, to support the claim of discrimination. However, the court found that the classification of imported goods for higher tax rates was based on intelligible differentia and reasonable classification. The court also referenced the decision in Indian Sugar and General Industry Export Import Corporation Ltd. vs. Commercial Tax Officer, which stated that there was no reason to distinguish between indigenous and imported goods for tax purposes. The court concluded that the amendments did not violate constitutional provisions and were not discriminatory. Conclusion: The court dismissed the writ petition, holding that the Tamil Nadu General Sales Tax (Fourth and Seventh Amendment) Acts, 2002, were constitutional, applicable despite the bilateral agreement between Bhutan and India, and did not impose discriminatory tax rates in violation of the Constitution. The court relied on the precedent set by the Division Bench in Sony India Ltd. vs. CTO and found no merit in the petitioner's arguments. Consequently, the writ petition was dismissed with no costs, and the connected miscellaneous petition was closed.
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