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TMI Blog2007 (11) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... tate by the petitioners in these applications and consequential demands are also set aside. Bank guarantees, if any, obtained from any of the petitioners in the present applications for securing consumption tax are directed to be released within one month from the date of communication of this order. - - - - - Dated:- 22-11-2007 - PRADIPTA RAY AND SAIKH ABDUL MOTALEB AND DIPAK CHAKRABORTI, JJ. PRADIPTA RAY (Chairman). In these applications the petitioners have questioned the constitutional validity of the West Bengal State Tax on Consumption of Goods Act, 2001 on the grounds that the provisions of the said Act are violative of article 301 of the Constitution of India and have challenged the orders imposing tax under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said Act in fact sought to levy sales tax on interState sales, which was beyond the competence of the State Legislature. The said Constitution Bench of the Supreme Court by its judgment in Jindal Stainless Ltd. v. State of Haryana reported in [2006] 145 STC 544 formulated the principles contained in articles 301, 302 and 304 vis-a-vis compensatory tax, disapproved the views expressed in Bhagatram Rajeev Kumar v. Commissioner of Sales Tax [1995] 96 STC 654 (SC) and upheld the tests applied in Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 and Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan AIR 1962 SC 1406. On the basis of the principles of law decided by the Supreme Court in Jindal Stainless Ltd. [2006] 145 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the State. It has been pointed out by the learned Advocates for the petitioners that till now the State Government has not levied consumption tax on goods purchased within the State. They have also submitted that such an interpretation is contrary to the declared objects of the impugned Act. In any event, none in the present application has raised any grievance that goods purchased in West Bengal have been taxed under the provisions of the Consumption Tax Act. All the impugned orders in these applications relate to imposition of consumption tax on goods imported from outside the State of West Bengal. Accordingly, it is not necessary for us to give our decision on such interpretation by Mr. Gupta. If and when such question arises in any ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax as evolved by the Supreme Court. The decision of the Supreme Court in Jindal Stainless [2006] 145 STC 544 and of several High Courts have further settled that the consumption tax as imposed on imported goods under the provisions of the Consumption Tax Act is not compensatory tax but a kind of general tax under taxing power to generate revenue. In view of the law settled by the Supreme Court in Jindal Stainless Ltd. [2006] 145 STC 544 and different High Courts as referred to hereinabove we hold and declare that the provisions of the West Bengal State Tax on Consumption or Use of Goods Act, 2001 levying tax on entry of goods into any local area from outside the State is violative of article 301 read with article 304 of the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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