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2021 (12) TMI 130 - HC - VAT and Sales TaxRefund of entry tax - appellant were paying 4% tax against ''C'' Form declaration for the inter-state sales - violation of Article 301 of the Constitution or not - HELD THAT - As on date, the legal position is that the Hon'ble Supreme Court in THE STATE OF TAMIL NADU ORS. VERSUS ITC LIMITED ANR. 2017 (8) TMI 1648 - SC ORDER has upheld the validity of the Act. As pointed out by the learned Single Judge in the impugned order, if at all there is any right for the appellant herein to seek for refund of the tax already paid, such right will arise only after the disposal of the issue whether the Ingots purchased by the appellant from outside the State, is liable for entry tax and whether there is any discrimination in classification of the goods. Without a declaration regarding the legality of imposing entry tax for Ingots is held to be unconstitutional, refund of tax already collected will not arise. Writ Petition filed for a Mandamus, seeking refund of entry tax, is premature and to be dismissed.
Issues:
Challenge to levy of entry tax under Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001; Refund of entry tax collected from appellant; Validity of the Act under Article 301 of the Constitution; Interpretation of Article 304(a) in relation to discriminatory taxes; Impact of Supreme Court rulings on entry tax laws. Analysis: 1. Challenge to Entry Tax: The appellant, a manufacturer of CTD & TMT bars, challenged the levy of entry tax under the Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001. The Act imposed entry tax on goods purchased from outside the State, leading to a legal battle questioning its validity under Article 301 of the Constitution. 2. Refund of Entry Tax: The appellant sought a refund of ?2,50,00,000 collected as entry tax, citing a previous Division Bench decision that declared the entry tax under the Act as illegal and unconstitutional. The appellant filed a writ petition requesting a Mandamus for the refund of entry tax collected during a specific period. 3. Validity of the Act: The Single Judge noted that the Act's validity was under challenge before the Supreme Court, and hence, the appellant was advised to wait for the Supreme Court's verdict before seeking a refund. The writ petition was dismissed based on the pending challenge to the Act's legality. 4. Interpretation of Article 304(a): The appellant contended that the levy of entry tax was discriminatory and violated Article 304(a) of the Constitution. However, subsequent Supreme Court judgments clarified that non-discriminatory taxes do not infringe Article 301, emphasizing that discriminatory taxes are prohibited under Article 304(a). 5. Impact of Supreme Court Rulings: The Supreme Court reversed the Division Bench judgment, upholding the validity of the Tamil Nadu Entry Tax Act. The Court clarified that while the Act was valid, certain levies during a specific period were found discriminatory and exempted from collection. This ruling influenced the legal position regarding the Act's enforcement and the appellant's claim for a refund. 6. Dismissal of Writ Appeal: The Court dismissed the writ appeal, stating that the appellant's request for a refund was premature as the legality of imposing entry tax on ingots was yet to be determined. The appellant was granted liberty to seek a refund if a favorable decision emerged from the pending batch of writ petitions challenging the entry tax laws. No costs were awarded in the dismissal of the appeal.
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