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TMI Blog2004 (1) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... in the stock transfer invoice issued by the manufacturing unit which represents the value declared for the purposes of Central excise duty as increased by freight incurred in transporting the goods from the manufacturing unit into its godown at Bangalore. Entry tax was paid accordingly on such value. The petitioner would contend that this practice is being followed ever since air-conditioners and refrigerators became taxable goods in the year 1982 though they ceased to be taxable goods in and around from 1984 to 1992. The assessing officer did not accept the petitioner's return on the ground that the entry tax is required to be paid on the market price of the goods in the recipient local area and not on the value mentioned in the stock receipt memos. According to the assessing authority the word value occurring in section 2(A)(8a) of the Act in respect of goods received otherwise by way of purchase meant effectively eventual sale price. In so far as the refrigerators, the assessing authority held that the petitioner had marketed the same for consideration of a gross profit of 15.5 per cent and therefore proposed to add the same to the stock receipt value. In respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat for the purpose of levying tax what is required to be looked into is the sale price and thus confirmed the order passed by the assessing authority as well as the appellate authority. The said orders of the authorities are challenged by the petitioner in the above revision petition. Mr. K.P. Kumar, learned counsel appearing for the petitioner strenuously contended that the assessing authority, the appellate authority as well as the Tribunal have not taken into consideration the principle laid down in the decision of the honourable Supreme Court in the case of State of Karnataka v. Hansa Corporation AIR 1981 SC 463. He submitted that the entry tax will have to be levied on the entry point and not on the sale price. He submitted that section 3 is the charging section which would clearly indicate that entry tax can only be levied on the basis of the value at the time of entry which in the present scenario is the stock transfer price. He submitted that the assessing authority, the appellate authority as well as the Tribunal had not gone into this question at all. All the authorities including the two authorities and the Tribunal have proceeded to consider the levy of tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by notification and different dates and different rates may be specified in respect of different goods or different classes of goods or different local areas. The definition of the value of the goods as defined under section 2(A)(8a) of the Act reads thus: 'Value of the goods' shall mean the purchase value of such goods, that is to say, the purchase price at which a dealer has purchased the goods inclusive of charges borne by him as cost of transportation, packing, forwarding and handling charges, commission, insurance, taxes, duties and the like, or if such goods have not been purchased by him, the prevailing market price of such goods in the local area. Section 3 of the Act is a charging section which provides for levy of entry tax on any goods specified in the First Schedule which enters the local area for consumption, use or sale therein at such rates not exceeding 5 per cent of the value of the goods as may be specified only retrospectively or prospectively by the State Government by notification, etc. The said section also provides that the rates may be specified by issue of different notifications in respect of different goods or different class of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods which enters the local area. The decision in the case of State of Karnataka v. Hansa Corporation AIR 1981 SC 463 strongly relied upon by Sri Kumar no doubt supports his contention that even if the dealer is a manufacturer of goods at a place outside the local area and brings the goods within the local area, since at the time of entry of the goods in the local area, the dealer would have determined the price of the goods he is required to pay the tax based on the price of the goods. In this connection, it is useful to refer to the observation made by the Supreme Court at paragraph 38 of the judgment which reads as hereunder: 38. . . . The contention overlooks the specific guideline to be found in the charging section itself. The taxing event is the entry of scheduled goods into a local area. The tax becomes payable on the entry of scheduled goods in a local area. Therefore, the price of the scheduled goods at the time of entry paid by the dealer who is the importer of goods within the scheduled area would be the ad valorem price on the basis of which tax would be computed. No subsequent rise or fall in price has any relevance to the computation of the tax. The chargin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market price of such goods on the date of entry of the said goods into the local area. What is contemplated is the determination of the market value of the goods when the goods enter the local area and not the market price or the sale price of such goods on a later date. In the light of the view expressed above, we are of the view that the judgment of the Madhya Pradesh High Court in the case of Commissioner of Sales Tax v. Hindustan Steel Ltd. [1996] 29 VKN 320 has no application to the case of the petitioner. When section 2(A)(8a) specifically provides for determination of the market value of the goods as noticed by us earlier, it is not permissible to determine the market price of the goods in a manner other than the one provided under section 2(A)(8a) of the Act. If the market price as shown by the petitioner is on stock transfer basis, the determination of the said market value would run counter to the mandate of section 2(A)(8a) of the Act. That cannot be permitted. In the instant case, the assessing authority in the absence of any material placed by the petitioner with regard to the prevailing market price of the goods which has entered the local area, has proposed to add gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketing, etc. Though it contended that the value of the goods arrived at by the lower authorities was the sale price declared to the Central Excise Department, the appellant has not produced any material to show the sale price declared by it before the Central Excise Department. Thus under these circumstances, we do not find any reason to interfere with the impugned order of the first appellate authority. Therefore, from the reading of the order passed by the assessing officer as well as the appellate authority and the Tribunal what emerges is that in the absence of the material placed by the petitioner with regard to the prevailing market price of such goods in the local area on the date of entry of the goods to the local area, while the assessing authority has added 15.5 per cent to the price shown by the petitioner in stock transfer, the first appellate authority has modified it to ten per cent which is made applicable both for refrigerators and air-conditioners and its parts. The said order was affirmed by the Tribunal which is the second appellate authority. Therefore, we are unable to accede to the submission of Sri Kumar, learned counsel appearing for the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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