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TMI Blog2005 (10) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... lso been sought for, for quashing the assessment order and the demand notice both dated September 16, 2002 indicating the liability therein for the assessment year 2001-02 (copy at annexures C and D) in terms of the order dated August 4, 2003 allowing the amendment applications so as to include the challenge to the assessment order also. The challenge to the notification is mainly on the ground that the notification is ultra vires powers of the State Government for issue of such a notification as one beyond the power delegated under section 3(1) of the Act which is the charging section and which in turn also delegates power to the State Government to issue notifications to effectuate the charge as violative of articles 14, 19(1), 301 and 304(b) of the Constitution of India; that it is arbitrary, an instance of excessive delegation, a power conferred on the executive without any checks, guidelines, virtually amounting to conferring unguided powers, suffering from vice of excessive delegation, going beyond the permitted restrictions that could be imposed in terms of clause (b) of article 304 of the Constitution of India, etc. The entire challenge occurs in the context of the at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bituminised paper and hessian-based paper and the like. While not containing cork as an enumerated item, the effectuating notification for giving life to this entry in terms of the Notification No.FD 69 CET 92(I), dated April 30, 1992 also did not contain cork as an item indicating the rate at which tax can be levied under the provisions of the Act and therefore the present notification also has to meet the same fate. It appears that in the interregnum, while a number of other entries had been added to the First Schedule and what was earlier entry 16A packing material became entry 66 in the year 1995 on Act No.3 of 1995 becoming effective from May 1, 1995, the contents of entry 66 remained the same as in entry 16-A. It is to be noticed that by the very amendment, many more entries were added to swell it to 102 entries and a residuary entry was also added for a good measure by entry 103 which reads as under: 103. Goods other than those specified in any of entries in Schedule, but excluding those specified in the Second Schedule . It may be noticed that the number of entries which was in the Schedule which were in meagre three when the Act was enacted by the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gated to the State Government under section 3(1) of the Act; that the only limiting factor is the goods mentioned in the Second Schedule and except for the goods enumerated in the Second Schedule to the Act, the State Legislature had expressly evinced interest to levy entry tax on all other goods and the function of selection and effectuation of such levy on the items which comes within the First Schedule to the Act being given to the Government under section 3(1) of the Act, there is nothing lacking in competence or otherwise in the issue of the impugned notification; that the challenge is not tenable and therefore the writ petition deserves to be dismissed. On behalf of the petitioner, I have heard Sri R.V.Prasad, learned counsel as also his colleague Sri Sreedhar Murthy and Sri Veda Murthy, learned Government Pleader appearing on behalf of the respondents. The arguments have been heard on September 29, 2005 and again today. The scheme of one of the charging section, i.e., section 3(1) of the Act which reads as under: 3. Levy of tax. (1) There shall be levied and collected a tax on entry of any goods specified in the First Schedule into a local area for consumption, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government and therefore the notification is bad on such premise. It is alternatively contended that even otherwise the notification becomes bad for the reason that by reference to entry 103, the residuary entry, if the State Government is enabled to pick and choose goods which are not expressly mentioned in the Schedule itself; and if the State Government can keep on adding any goods as though the Government itself is competent to do and proceed to issue notifications in respect of such goods under section 3(1) of the Act, the power becomes an illustration that the exercise of such power by the executive part of the State becomes an instance of excessive delegation without proper checks and therefore violative of article 14 of the Constitution of India and yet again the notification deserves to be quashed. One another contention urged on behalf of the petitioner is that the levy of entry tax in respect of goods like cork is an impediment in free-flow of trade and commerce as cork is invariably brought in by the petitioner from outside the State and therefore the very levy is violative of article 301 as also article 304(b) of the Constitution of India, inasmuch as, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same, by the issue of mere notification, the goods like cork which has not been hitherto described or coming within the scope of packing material as it occurs in entry 66, cannot be subjected to tax under the notification. Apart from the challenge to the validity of the notification, the petitioner has included a prayer for quashing of the assessment order and the consequential demand notice in respect of the assessment year 2001-02 in terms of the order dated September 16, 2002 (annexures C and D). The assessment orders having placed reliance on the impugned notification, quite naturally the assessment order cannot be sustained if the notification itself is held to be invalid on any of the grounds urged by the learned counsel for the petitioner. Sri Vedamurthy, learned Government Pleader appearing on behalf of the respondents, submits that the notification is a valid one, it is well within the powers of the State Government, as in this case, under subsection (1) of section 3 of the Act, the Legislature having delegated the function of identifying the goods entering the local area and also stipulating the rate with an upper limit of 5 per cent and issue of notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contemplation of entry 103 read with section 3 of the Act. In this regard, the other argument of Sri Vedamurthy is that issue of notification like the impugned notification is by exercise of power delegated under sub-section (1) of section 3 of the Act and unless such delegation which used to be characterised as excessive, itself is challenged, the argument cannot succeed. In other words, the submission is that unless the delegated provisions, viz., sub-section (1) of section 3 of the Act is held to be bad, it cannot be said either entry 103 or the notification becomes bad so long as the notification is within the powers conferred under subsection (1) of section 3 of the Act and within scope of entry 103 to the First Schedule of the Act. In this regard, the learned Government Pleader placed reliance on the decision of the Supreme Court in the case of State of Karnataka v.Hansa Corporation [1980] 4 SCC 697, and submits that the Supreme Court having upheld the provisions of the Act including the charging section sub-section (1) of section 3 of the Act, it is not open to the petitioner to challenge the validity of sub-section (1) of section 3 of the Act and it is only because of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy it is inevitable a notification under subsection (1) of section 3 of the Act has to be issued, as otherwise, the charging section is not complete in the absence of specific goods, clear rate and the event. Though the Legislature had earlier thought of having a good number of entries in the First Schedule to the Act, it also chose to include a residuary entry entry 103 by the Amendment Act 3 of 1995. The language used for this entry leaves one with no doubt that all such goods which are not already covered under any one of the earlier enumerated entries, are now covered under this entry, viz., entry 103. The exception being goods mentioned in the Second Schedule. Entry 103 in fact achieves the object of the charging section even without existence of entries 1 to 102. But may be for better clarity, understanding or specification, if the entries are expressly made, there is nothing wrong in it. But at the same time, it does not necessarily mean that entry 103 should be totally ineffectuated or rendered innocuous if the submission of the learned counsel for the petitioner is to be accepted. If as suggested by the learned counsel for the petitioner that for adding any further good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 30, 1994 which was the subjectmatter in the decision in Avinyl Polymers Ltd.[1998] 109 STC 26 (Karn), and the validity of the notification whereunder imposition of levy in respect of goods which were brought into the local area from the outside State was concerned and the levy being only in respect of such goods which were brought from outside the State into the local area. This court examined the validity of such levy under this notification on the touchstone of article 304. This court also noticed that the language of the notification goes far beyond the scope of section 3 itself, as under the notification a distinction was sought to be made as between the goods brought into a local area within the State and goods brought into the local area from outside the State. While the situation is not the same under the present notification, though incidentally in the case of petitioner, it may so happen the petitioner may bring particular goods from outside the State, the decision in the case of Avinyl Polymers Ltd. [1998] 109 STC 26 (Karn), is also of not much consequence or avail in the light of the decision of the Supreme Court in the case of Widia (India) [2003] 132 STC 360, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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