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TMI Blog2016 (8) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... ountry or from other States within the same country is also an import within the meaning of the Act. We cannot, therefore, restrict the definition of the words “import” and “importer” in the manner suggested by Mr.Dada. His second contention must, therefore, fail. - Constitutional validity upheld - Decided against the assessee. Revenue neutrality - it was contended that the purpose of entry tax is to neutralize difference between sales tax in the importing State and the sales tax in the originating State - Held that:- proviso to Section 3 does not dilute or read down the definition of the terms “entry of goods”, “import” and “importer”, but it only clarifies that if the import is by the importer who has purchased the goods in another State or Union Territory of the country and in that area these goods when purchased attract general sales tax, then, the amount of such tax shall be reduced from the levy of entry tax. - Our conclusion is also reinforced by the language of sub-section (5) of section 3 which states that no tax shall be levied on the specified goods by the dealer registered under the Maharashtra Value Added Tax Act who brings such goods into any local area for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnace oil and residual furnace oil which is also included in petroleum fuel oil, then, NO ONE can enter into this factual controversy. It involved and included the product of the petitioners and if there is entry which takes care of it, then whether it is Entry No.12 or 13 should not be a matter of concern. The entries in the Schedule could describe the product as furnace oil and include therein heavy furnace oil and residual furnace oil, but to rule out any confusion or doubt even in relation to petroleum fuel oils so long as the description of a particular product or goods is of that category, then it would also include heavy furnace oil and residual furnace oil. Thus, no controversy. Unless the petitioners discharge their tax liability at their instance, no consideration to the plea of revenue neutrality – appeal dismissed – recovery of tax not stayed. - WRIT PETITION NO. 1321 OF 2015, MVAT APPEAL (LODG) NO. 20 of 2015, MVAT APPEAL (LODG) NO. 21 OF 2015 - - - Dated:- 2-8-2016 - S.C. Dharmadhikari and G.S.Patel, JJ. For The Petitioner : Mr. R.A. Dada, Senior Counsel with Mr. V. Sridharan, Senior Counsel, and Mr. P.C. Joshi, Mr. Puneeth Ganapathy, Mr. Aniket Ghosh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitutional provisions and some of the other laws referred therein. 7. The claim of the petitioners therein, as well as here, is that the raw material for their power plant at Chembur, Mumbai was imported from abroad through the Port of Mumbai. Writ Petition No.429 of 2003 was disposed of finally by a Division Bench judgment delivered on 16th January 2004. This Court, in paragraph 38 of its detailed judgment in the earlier petition, held that the levy of entry tax on furnace oil and low sulphur waxy residue oil created an imbalance between imported goods and local goods, and that this defeated the very purpose of enacting the Maharashtra Entry Tax Act. This Court also declared the levy of entry tax to be discriminatory and non-compensatory in nature. This Court relied upon an earlier judgment of the Hon ble Supreme Court of India in the case of M/s. Jindal Strips Ltd. Ors. vs State of Harayana Ors. (2003) 8 SCC 60 to reach this ultimate conclusion. Thus, Entry No.13 of the Schedule appended to the Maharashtra Entry Tax Act was declared as unauthorized and unconstitutional. 8. The 1st respondent-State preferred a Special Leave Petition before the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution of India being clear, the above objections were raised. Even the bar of limitation was pleaded. However, overlooking all this, the assessing authority passed orders of assessment on 29th June 2013, for the assessment year 2005-2006 and 30th March 2013, for the assessment year 2008-2009. Annexure D and D-1 are copies of the same. In both these orders, entry tax was levied at 12.5% along with interest under section 30(3) of the MVAT Act and penalty under section 29(3) of that Act read with section 6 of the Maharashtra Entry Tax Act, resulting in a very huge financial burden on the petitioners. The details of the demand are set out in paragraph 8 of the petition. 11. Aggrieved by the order of assessment, appeals were preferred before the First Appellate Authority. One of the grounds of appeal was that the order of assessment related to a period commencing from 1st April 2005 onwards. Entry No.13 was not on the statute book in view of the substitution of the Schedule by the Section 36 of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2006 with retrospective effect from 1st April 2005. The petitioner No.1 therefore pointed out that the entries under the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) read with Article 286 of the Constitution. 9b) The Petitioners submit that the definition of the term value of the goods in section 2 (n) no reference is made to the customs and other duties that an importer of goods from other countries was required to pay before the clearance of the consignment out of the customs counter, itself support the submission that the goods imported from abroad was never intended to be covered within the scope of the Act. 9c) The Petitioners submit that the restrictions on the power of the State in respect of levy of tax provided under Article 286 squarely apply to the import of goods from abroad. The provisions of section 5 (2) of the Central Sales Tax Act, 1956 also support the above submission. The said provision of section 5 (2) read as under: 5. When is a sale or purchase of goods said to take place in the course of import or export . (1) .................... (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the set off to such importers vis- -vis those who purchased the goods locally from or within Maharashtra. This, according to the Division Bench of this Court, violated Article 301 of the Constitution of India. This judgment of the Division Bench was challenged in the Hon ble Supreme Court of India. In the meantime, the State inserted sub-clause (iv) to clause (a) in sub-section (1) of section 42 of the Bombay Sales Tax Act, 1959 with retrospective effect. This was deemed to have been added with effect from 1st October 2002, by Maharashtra Act No.13 of 2004 dated 29th January 2004. This amendment was effected to remove the basis of the judgment of this Court. The insertions in section 42 enabled granting set off to dealers liable to pay entry tax. It is in the light of this development that the Hon ble Supreme Court of India observed that the Special Leave Petition of the State has been rendered infructuous. It was disposed of accordingly. It was also observed that the judgment of this Court shall not be treated as a precedent. 15. A similar provision for grant of set off under MVAT Act is to be found in section 48(1)(a)(iv). Reliance is placed thereon to urge that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax component. 18. It is also urged that is false to suggest that Entry 13 of the Schedule to the Act was not on the statute book from 1st April 2005 to 31st March 2006. A summary of the legislative amendments relevant for the decision of this Court is set out in paragraph 15 of the Affidavit in Reply at pages 339 and 340 of the paper-book. Relying on that it is submitted that with effect from 1st April 2005, the goods in question attracted entry tax. At all material times, the goods in question were covered by the Schedule to the Act. The dispute about the goods of the petitioner not falling under any of these entries cannot be a substantial question of law to be entertained at this stage. 19. Then the grounds of the writ petition are dealt with and it is submitted that once the levy is of tax, then no question of any quid pro quo arises. In paragraph 17 of the Affidavit in Reply various provisions of the two enactments are relied upon. It is pointed out that the present case is not of import of motor vehicles and hence provisions of entry tax on motor vehicles cannot be used for challenging the Maharashtra Entry Tax Act. Attention is invited to the Schedule of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not enable the respondents to overcome this binding judgment. It is urged that the absence of set off is not the only lacuna or defect pointed out by this Court in the Division Bench judgment. Once the levy of entry tax was held to be unauthorised and unconstitutional, then the Supreme Court order, one that is extremely brief, will not assist the State. 21. It is urged that Rule 8 of the Maharashtra Entry Tax Rules is a specific provision. That provides for a limitation of three months following the month for which the return was required to be furnished in the case of a registered importer like the petitioner. The order of assessment, though made by an officer under the MVAT Act, could not have ignored the Maharashtra Entry Tax Act and the Rules framed thereunder. If that enacts a bar of three months as provided in Rule 8(1)(ii) of the Maharashtra Entry Tax Rules, then the assessment was ex facie time barred. The State cannot erroneously assume that it would be the MVAT Act and the Rules framed thereunder which are the governing provisions. That would enable them to ignore Rule 8 of the Maharashtra Entry Tax Rules. This is a legally unsound and erroneous assumption. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the tax is concerned has gained finality. That cannot be revisited in any manner. As far as the discriminatory part of the levy is concerned, that is partially removed. Mr. Dada would submit that the validating law saved the levy for the period upto 31st March 2005. From 1st April 2005, onwards, even according to the Tribunal, there is no entry in the schedule to the Entry Tax Act under which the tax could be levied. Mr. Dada, therefore, submits that it is erroneous on the part of the Tribunal to hold that Entry No.13 exists. It is a non-existent entry on which the Tribunal has relied to uphold the assessment. 25. Then Mr. Dada would submit that as far as the effect of the Division Bench judgment on the levy being noncompensatory is concerned, that binds the State. Once it binds the State, then no attempt can be made to overrule the binding judgment of this Court. An attempt simpliciter by the Legislature to reverse or overrule a binding judgment of this Court is constitutionally impermissible. Hence, the levy remains unconstitutional and unauthorized. 26. Mr. Dada then relies upon Rule 8 of the Maharashtra Entry Tax Rules to submit that the assessment is ex facie t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and not the State. It is, therefore, the contention that the goods imported from abroad and brought in for use as raw materials by the petitioners herein cannot be subjected to entry tax. 28. Even with regard to the classification of the goods of the petitioners, Mr. Dada relied upon pages 137, 138, 176 to 178 and 202 of the paper book to submit that the views of the experts would demonstrate as to how the products or goods in question have been understood by the trade. Therefore, the attempt to bring them in the tax net is illegal and unconstitutional. 29. Mr. Dada has handed in two notes of written submissions. In these, after elaborating the above contentions, what is alleged is that the respondents invoke Entry No.13 of the Schedule as revised and reenacted in 2007 vide section 5 thereof. That view is incorrect. Entry No.12 of the Schedule has been referred for the goods in question in the written submissions of the State tendered before this Court. This is also incorrect. In that regard, reliance is placed on section 3 of the Maharashtra Entry Tax Act to submit that only goods expressly specified in the schedule are liable to a levy of entry tax. There is no resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently, it violates Article 301 of the Constitution of India. Reliance is placed upon the judgment of Eurotex Industries Exports Ltd. Anr. vs. State of Maharashtra Anr. 2004 (125) Sales Tax Cases 25 Taxes that are compensatory or regulatory in nature do not retard free trade and commerce throughout the country of India. Instead, they promote them and, therefore, Article 301 is not violated. However, the State pleads applicability of Article 304(b). In that regard, it is submitted that the levy must be understood correctly. The impugned levy is on goods entering into a local area of the State from outside the State. It does not tax the entry into a local area from another local area within the State of Maharashtra. Therefore, the only way in which the impugned legislation can be saved is to establish that it does not violate Article 304(a) of the Constitution of India. The impugned tax is levied only on goods that enter the local area from outside the State . A similar tax on goods that enter into local area within the State from any place within the State is not imposed. This is violative of Article 304(a). In the absence of assent of the Hon ble President of India, Arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aghuvar India Ltd. . (2000) 5 SCC 299 13) Ahmedabad Manufacturing and Calico Printing Co. v SG Mehta . (1963) 48 ITR 154 (SC) 14) S.S. Gadgil v Lal Co. . (1964) 53 ITR 231 (SC) 15) Hindustan Ferodo Ltd. vs. Collector of Central Excise . Bombay 1997 (89) E.T 16 (SC) 32. On the other hand, Mr. Sonpal, learned Special Counsel appearing on behalf of the Revenue, submits that there is no substance in the challenge which is raised in the Writ Petition. Equally, there is no merit in the appeals. These proceedings do not raise any substantial questions of law. The dealer is repeatedly raising the contentions to avoid compliance with the liability to pay entry tax. Mr. Sonpal submits that in repeated rounds, the same contentions have been raised, though the petitioners / appellants are aware that they are covered and dealt with in the earlier round. The conduct of the petitioner would, therefore, demonstrate as to how they wish to avoid compliance with the Maharashtra Entry Tax Act. 33. Mr. Sonpal invites our attention to both the Affidavit in Reply to the writ petition and the orders passed by the Assessing Officer and the First Appellate Authority. He would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered or registered. Then follows Rule 6 which prescribes the method of payment of tax, interest and penalty. Then comes Rule 7 which deals with return- cum challan. Rule 8 provides for assessment, rectification and review. According to Mr. Sonpal, the amount of tax due from an importer who is not registered shall be assessed by the assessing authority concerned within one month from the detection of his liability to pay the tax, and in case of a registered importer, this period would be three months running from the succeeding month for which return- cum -challan is required to be furnished. Therefore, Mr. Sonpal would submit that if by sub-rule (3) of Rule 8 it is open to the Assessing Authority in the case of an assessment of an unregistered importer to fall back on the MVAT Act and the period for the assessment provided by the said Act, then, it is inconceivable that only in the case of a registered importer, if the assessment is not done within three months in terms of Rule 8(1)(ii), the same would be a fetter on the power to assess. There cannot be different periods of limitation for registered and unregistered importers. To say, therefore, that thereafter no tax can be assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods into a local area for consumption, use or sale therein. It is only in that event that liability to pay the tax arises and not otherwise. The import of goods into the local area is not prohibited. It is their consumption, use or sale therein which attracts the tax. Mr. Sonpal submits that the petitioners do not dispute that import simpliciter does not attract the levy. Accepting Mr. Dada s contentions would be doing violence to the plain language of the statute. Once the levy is on the entry of goods specified in Column (II) of the Schedule to the Maharashtra Entry Tax Act into any local area for consumption, use or sale therein, then, it is not permissible to dilute the rigour of the provisions in that behalf. Mr. Sonpal submits that the three provisos to sub-section (1) of section 3 would clarify that the rate of tax to be specified by the Government in respect of any commodity shall not exceed the rate specified for that commodity under the MVAT Act and the tax payable by the importer under the Maharashtra Entry Tax Act shall be reduced by the amount of tax paid, if any, under the law relating to general sales tax in force in the Union Territory or the State in which the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods into a local area and is not qualified by words from any other State ; goods coming from any part of world or from any country attract the Entry Tax. Hence to contend that entry of goods does not apply to imports is incorrect. As stated earlier the provisions of Article 286 do not prohibit levy of Entry Tax when exclusive power of Entry Tax is earmarked for the State in List II. 39. He submitted that it is incorrect to contend that because the definition in Section 2(n) of the words value of the goods does not refer to customs and other duties, therefore this means that the levy of entry tax on imported goods is not provided by the Entry Tax Act. 40. Section 5(2) of the Central Sales Tax 1956 in no manner assists the petitioners contention that the imported goods are exempted or are out of purview of Entry Tax. 41. He would submit that any limitation imposed on use of coal for generating power under the Maharashtra Pollution Control Board s norms does not imply or mean that the entry tax is not attracted on imported fuel raw materials. Hence it is not sound to contend that the mandate of using low sulphur waxy residue ipso facto exempts the entry tax on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries. The definition of the term Schedule is inclusive, not exhaustive, as is the language of the entries, and hence it cannot be said that the appellants product is Furnace oil / residual Furnace oil. {some problem with this phrase; will discuss with SCD, J} The expert opinion is also inconclusive and vague. Even otherwise, the expert s opinion is in favour of the revenue, since it is stated that the appellant is importing residual fuel oil. 48. In view of the above submissions, Mr. Sonpal submitted that there is no merit in the Appeal and, therefore, it is liable to be dismissed. 49. Mr. Sonpal submits that in the entire petition one does not find any averments of violation of any fundamental or constitutional rights of the petitioners. Some general challenge has been raised, though the petitioners are aware that in the earlier round they could not succeed in doing away with the Entry Tax completely. Mr. Sonpal submits that the earlier judgment in the petitioners case, if properly and completely read, would denote that Entry No.13 was declared as unauthorized due to non availability of the set off to such importers vis - vis those who purchase the goods loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who imports any goods whether on his own account or on account of a principal or any other person, into a local area for consumption, use or sale therein; (ii) any owner of the goods at the time of the import of such goods into a local area; (h) local area means the area for the time being included within the limits of, - (i) the Municipal Corporation of Brihan Mumbai, established under the Mumbai Municipal Corporation Act; (ii) a Municipal Corporation, established under the Bombay Provincial Municipal Corporations Act, 1949; (iii) the Corporation of the City of Nagpur, established under the City of Nagpur Corporation Act, 1948; (iv) a Zilla Parishad, established under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961; (v) a Cantonment Board, established under the Cantonments Act, 1924: Provided that, the areas within the limits of the Poona Cantonment Board and the Kirkee Cantonment Board, the Aurangabad Cantonment Board and the Ahmednagar Cantonment Board shall be deemed to be included in the limits of the Municipal Corporation of the City of Pune, the Municipal Corporation of City of Aurangabad and the Ahmednagar Municipal Counci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided also that, no tax shall be levied and collected on specified goods entering into a local area for the purpose of such process as may be prescribed, and if such processed goods are sent out of the State. Explanation. - No tax shall be levied under this Act on entry of any fuel or other consumable contained in the fuel tank fitted to the vehicle for its own consumption while entering into any local area. (2) Notwithstanding anything contained in subsection (1), there shall also be levied a tax in addition to the tax leviable in accordance with sub-section (1) on the entry of Petrol and High Speed Diesel Oil in any local area for consumption, use or sale therein at the rate of one rupee per litre. (3) Any importer who is not liable for registration under this Act or rules made thereunder, shall not be liable to pay tax under this Act and any importer who during the course of any year becomes liable for registration under this Act shall not be required to pay the tax on any entry of goods effected by him into a local area immediately before the time he becomes so liable for registration. (4) The tax levied under sub-section (1) or (2) shall be payable by the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration under this Act to the Assessing Authority, make the application. The authority to whom that application is to be made on being satisfied that it is in conformity with the provisions of the Act and Rules, shall register the applicant and grant him a certificate of registration. Thus, a dealer registered or liable for registration under the Sales Tax Act and termed as an importer can obtain the registration. Similarly, an importer liable to pay tax under the Maharashtra Entry Tax Act though not registered as a dealer under the Sales Tax Act or liable for such registration can seek registration. Then comes section 5 which enables setting up of check posts. Prior thereto, we must notice sub-section (3) of section 4 which enables cancellation of registration. 53. Since heavy emphasis has been placed on section 6 of the Act falling in Chapter III we reproduce the same hereinbelow: 6. Levy and collection of tax, penalties and interest:- (1) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, review, collect and enforce payment of tax under the Value Added Tax Act shall assess, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) residual furnace oil 55. The Statement of Objects and Reasons would indicate that for mobilising additional revenue and to achieve an equitable tax burden to the extent possible on the consumption of goods within the State, some States have levied entry tax on the goods imported from outside the respective States into local areas for consumption, use or sale therein. In this backdrop, there was a demand for such an enactment in the State of Maharashtra. That demand was examined and found to be genuine. That is how the State proposed to levy entry tax on the specified goods. The salient features of the law are also set out in the Statement of Objects Reasons. 56. Thus the tax is on the entry of goods into a local area from any place outside the State for consumption, use or sale therein. The term import means bringing or causing to be brought or receiving any goods into a local area from a place outside the State. 57. The writ petition, which must contain the basic factual averments and lay a foundation for the challenge, states nothing except to refer to the orders of assessment for financial years 2005 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulphur furnace oil and low sulphur waxy residue oil brought from outside the State for use in the local area by taking recourse to the above judgment. The Assessing Officer, therefore, held that the levy of entry tax at ₹ 845,73,124,77/- is valid. He, therefore, determined the tax liability and directed issuance of demand accordingly. This order dated 29th June 2013, pertained to the period as noted above, namely, 2005 2006. For the period 1st April 2008 to 1st March 2009, the refund applications and the returns both were scrutinized and the Assessing Officer arrived at an identical conclusion. That order is to be found at pages 89 to 94 of the paper-book. It is dated 30th March 2013. Thereafter, appeals were brought before the First Appellate Authority and, in those, specific grounds were raised by the petitioners with regard to the constitutionality and legality of the levy. The petitioners appeared before the First Appellate Authority. They also tendered written submissions. The petitioners pointed out that they are registered under the MVAT Act, CST Act as well as the Entry Tax Act. They submitted that for generation of electricity, they require gas, coal, low sulphur hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioners submitted that they were not liable to pay the entry tax as demanded. It is based on these materials, including what is termed as an expert opinion, that the petitioners submitted that the assessment orders be set aside. 60. With the assistance of Mr. Dada, we have perused the written submissions, copies of which are annexed to the writ petition and tendered during the course of proceedings before the Appellate Authority. We have also perused a copy of the opinion of Mr. S.S. Bhagwat at pages 137 and138 of the paper-book. We have also perused the extracts of the Indian Standard Specification for Heavy Petroleum Stock. 61. The First Appellate Authority before whom the above materials were relied upon passed a detailed order on 13th March, 2014, a copy of which is at Annexure-O page 223 of the paper-book. The First Appellate Authority referred to several judgments of the Hon ble Supreme Court of India and other High Courts on the entry tax and came to the conclusion that this Court struck down the levy earlier on the point of discrimination insofar as set-off being not provided for payment of entry tax. The First Appellate Authority held that the enact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal, the argument of the petitioners counsel that the compensatory part of the order is not set aside has been dealt with. The State Government is stated to have admitted that they have not challenged the compensatory part of the the order. The amendment was carried out to the Act only to remove the discrimination and to provide a relief in the form of set off. The Tribunal concluded that by virtue of this amendment, the discrimination has been removed. 68. Then, in paragraph 9, the argument that according to the counsel for the petitioners still survives was pertaining to the levy of tax on imported raw material. The Revenue pointed out that the provisions for levy, assessment and collection are specific. Entry No.13 refers to both heavy furnace oil and residual furnace oil. The Entry has been reproduced in paragraph 9 of the order and the Tribunal held that in the face of its clear wording , the argument of the petitioners counsel cannot be accepted. 69. Then, in paragraph 10, the Tribunal concluded that by virtue of the Amendment Act and the words and expressions therein, Entry No.13 is valid and it covers all periods, earlier as well as subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench clarifies that though the point of legislative competence of the State to levy entry tax has been raised in the petition, that ground has not been pressed at the final hearing of the petition. The petitioners, namely, the present petitioners and one another entity, Eurotex Industries, restricted the challenge based on violation of Articles 14, 19(1)(g), 301, 304 and 286 of the Constitution of India. After referring to the primary facts and the Maharashtra Entry Tax Act, the Bombay Sales Tax Act and the Bombay Sales Tax Rules, the Division Bench noted the rival contentions. The judgment, upto paragraph 26 notes them in extenso and in paragraph 27, the Division Bench holds that imposition of entry tax on furnace oil and low sulphur waxy residue oil covered under Sr. No.13 to the Schedule of the Maharashtra Entry Tax Act cannot be sustained. The Division Bench in paragraphs 27, 28, 29, 30, 31, 32 and 33 held that by levy of entry tax on goods that enter the local area from outside the State while leaving out similar goods entering the local area from within the State, the State had in fact created a tax barrier in contravention of Article 301 which guarantees free flow of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t equals unequally which is not permissible in law. 35. It was contended on behalf of the State that because some States have levied entry tax on goods imported from outside their State, entry tax has been levied on similar goods entering the local areas in the State of Maharashtra so as to ensure a level playing field between the goods which enter the local area from within the State and those goods that enter the local area from outside the State. This contention of the State is without any merit because from the express words used in the Act it is seen that the entry tax is levied to ensure that the goods which enter the local area bear either the sales tax or the entry tax. Thus, from the provisions of the Entry Tax Act it is clear that the entry tax is not levied because some other States have levied entry tax on such goods. This reasoning is further fortified by the fact that the Entry Tax Act clearly provides that the rate of entry tax on any commodity shall not exceed the rate specified for that commodity under the BST Act, etc. Thus, by collecting entry tax on goods entering the local area from outside the State and refunding the sales tax on goods entering the local ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax. Apart from above, the ratio laid down by the Apex Court in the case of Bihar Chamber of Commerce (supra) to the effect that for establishing the compensatory nature of tax, it is enough if some connection, direct or indirect, is shown to exist between the tax and the trading facilities provided y the State does not support the case of the State, because, in the present case, admittedly the entry tax is levied to ensure that the goods entering the local area bear either sales tax or entry tax. Once it is found that the specified goods entering local area from within the State do not bear sales tax then entry tax on similar goods entering the local area from outside the State cannot be levied. In these circumstances subjecting the goods imported from outside the State to entry tax becomes unauthorised, arbitrary, discriminatory and violative of Article 301 of the Constitution. 38. The ration laid down by the Apex Court in the case of R. K. Garg (supra) is distinguishable on facts. In the present case unlike the case before the Apex Court, the Petitioners are not contending that the exemption granted to the raw materials purchased within the State should also be exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the appeal / Special Leave Petition against this judgment. The Hon ble Supreme Court of India clarifies that the Maharashtra Entry Laws (Levy, Amendment and Validation) Act, 2004, removes retrospectively the levy of entry tax on furnace oil and hence nothing survives in the Special Leave Petition. It was dismissed as infructuous. The impugned order of the High Court was held not be used as a precedent in any other matter. 76. The petitioners have understood the position accordingly, and have, therefore, raised several contentions. They are not merely relying on the earlier Division Bench, for they are aware of the above clarification by the Hon ble Supreme Court of India. Secondly, they are aware that now another statute has intervened, namely, the MVAT Act. Thirdly, after the judgment of the Division Bench, the present statute, namely, the Maharashtra Entry Tax Act, underwent some changes and amendments. For these reasons, they do not rest their submissions any longer only on the judgment of the Division Bench. We are, therefore, spared the effort of deciding as to whether this decision binds the respondents or otherwise. We are also spared the task of taking of any dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-technical. What we look for and demand is not a slavish, mindless adherence to technicalities. We seek sufficiency of compliance with the law; and there is a sound, well-established rationale, one that is centuries old, for demanding that an assault on the constitutionality of an enactment is not lightly mounted, nor lightly entertained. The legal requirement is the jurisprudentially established presumption of constitutionality; to dislodge that presumption requires a very high standard. The material must be cogent, and it must be clear and unequivocal. After all, when a statute is attacked as unconstitutional, this is a frontal assault on legislative wisdom. If that wisdom is to be undermined by constant attacks based on feeble and flimsy grounds, then it is the rule of law that is threatened. Doctrines fundamental to our Constitutional framework also demand that vires challenges are not filed or entertained on slight causs. In the present petition we do not know how many consignments of the goods were imported, from which destination or country abroad, when and whether that import is at a particular port, viz., Mumbai and how the goods found their way to the petitioners uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brihan Mumbai, a Municipal Corporation established under the Maharashtra Provincial Municipal Corporations Act,1949 and other areas as are defined to mean local areas within the meaning of clause (h) of section 2 of the Maharashtra Entry Tax Act. 81. In this regard, a reference to some of the decisions of the Hon ble Supreme Court of India would be necessary. In a 5-Judge Bench judgment in the case of The Central India Spinning and Weaving and Manufacturing Company Limited; the Empress Mills, Nagpur vs. The Municipal Committee, Wardha , AIR 1958 SC 341 the Hon ble Supreme Court had an occasion to consider the issue of applicability of C.P. and Berar Municipalities Act and the Terminal Tax Rules (Wardha) under that Act to the import of goods within the limits of the Municipality. The Hon ble Supreme Court explained the difference between a terminal tax and a levy of that nature and an entry tax. Prior thereto, the Hon ble Supreme Court was considering the contention of the Empress Mills, appellant before it, that the words imported into or exported from do not merely mean to bring into or to carry out or away from but also have reference to and imply the termination or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss a particular stretch of territory or across a particular area with the object of being transported to their ultimate destination which in the instant case was Nagpur. 82. True it is that this decision deals with a terminal tax. However, not only did the Hon ble Supreme Court trace the history of the Constitutional entries by referring to the Government of India Act, 1935, and the Constitution of India, but also analysed the two levies, their meaning and object. By referring to the decision of the Federal Court in the case of Punjab Flour and General Mills Co. Ltd. vs. Chief Officer, Corporation of city of Lahore , AIR 1947 FC 14 it was held as under : 33. The vires of the tax has not been assailed but the difference in the language of the two items in List I and II has been pressed before us for the purpose of showing that the word terminal implies the terminus of a journey and not the end of the jurisdictional limits of a Municipality. Terminal in item No. 58 of List I of the 1935 Constitution Act has reference to the terminus of carriage of goods. There is no reason to give to this word a different meaning in item No. 8 of Scheduled Tax Rules under the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing passage from the judgment of Spens C. J. shows the meaning to be attached to the word terminal : There appears to us a definite distinction between the type of taxes referred to as terminal taxes in Entry No. 58 of List I of Sch. 7 and the type of taxes referred to as cesses on the entry of goods into a local area in Entry No. 49 of List II. The former taxes must be (a) terminal (b) confined to goods and passengers carried by railway or air. They must be chargeable at a rail or air terminus and be referrable to services (whether of carriage or otherwise) rendered or to be rendered by some rail or air transport Organisation. The essential features of the cesses referred to in Entry No. 49 of List II are on the other hand simply (a) the entry of goods into a definite local area and (b) the requirement that the goods should enter for the purpose of consumption, use or sale therein... In our judgment there is no limitation to be implied in Entry No. 49, List II, in regard to the manner in which goods may be transported into a local area. It follows that so far as rail-borne goods are concerned the same goods may well be subjected to taxation under Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mport and this is also defined, and if the particular act complained of falls within the definition, then there is no escape from the levy. It is in this context that we must look at section 3 of the Act which also has been reproduced by us above. We are not in agreement with Mr. Dada that only those goods which have been brought within the local area from a place outside the State of Maharashtra but within the territory of India will attract the levy and not those goods which enter the local area after being imported from abroad. The argument of Mr. Dada is that the expression outside the State cannot mean outside the territory of India. We do not find any support for such an argument. The reported decisions seem to hold otherwise. Even otherwise, it is difficult to appreciate the implications of this argument. It would lead to needless complexity and incongruous and inconsistent results. For instance, if goods are imported into the port of Mumbai, and used in Mumbai, then, according to Mr. Dada s formulation, such goods are not covered by the levy and entry tax is not attracted. But what might happen if the goods were imported into Kandla, Vishakapatnam or Kolkata, for instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (or animals) brought into a local area (a) for consumption (b) for use or (c) for sale, and the Boroughs Act, before the amendment, had selected only two, namely, consumption and use and left out the third that is, sale . The tax was thus payable only when the goods or animals were brought for consumption or use, by the person who brought them in, but not when the goods or animals were brought in and sold and were consumed or used by the purchaser or someone else. It is conceded that after the amendment the tax was intended to be collected even in respect of goods brought for sale but here it is pointed out that the procedure under sections 75, 76 and 77 has not been followed as required by section 60 of the Boroughs Act and the imposition of octroi on goods and animals brought in, for sale fails to be effective. It is said that this amounts to a new tax and it needed to be imposed according to the provisions above- mentioned and reliance is placed ,upon Burmah Shell Oil Storage and Dist. Co.v. Manmad Municipality AIR 1958 Bom 43. (12a) The Boroughs Act defines octroi in section 2 (12)- octroi shall include a terminal tax. In clause (v) of section 73(1) terminal tax is menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingate tolls because they were collected at toll gates or barriers. Normally, they were levied on goods meant for consumption but in Seligman s Encyclopaedia of Social Sciences Volume IX page 570, octrois are described without any reference to consumption or use. This is how the editors describe octrois :- As compared with the facilities of the National Government the possibilities of raising revenue by local bodies arc quite limited. All forms of indirect taxation are practically closed to local authorities. They are unable to levy customs duties, although they may collect the so-called octrois that is, duties levied on goods entering town. 15. It will be noticed that in the Government of India Act octroi was named but not described and now the Constitution avoids the word octroi , as did the Government of India Act 1935 before, and gives a description. In the Boroughs Act the definition of octroi includes Terminal Tax. Terminal Tax, as the Indian Statutory Commission points out, formerly meant in Indian fiscal, terminology a tax which was levied at Railway Stations and collected by the Railway Administration on all goods imported or exported from the Station. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em 52 of List II of Sch. VII of the Constitution. The Municipality derives its power to tax from the State Legislature and can obviously not have authority more extensive than the authority of the State Legislature. If the State Legislature is competent to levy a tax only on the entry of goods for consumption, use or sale into a local area, the Municipality cannot under a legislation enacted in exercise of the power conferred by item 52, List II have power to levy tax in respect of goods brought into the local area for purposes other than consumption, use or sale. The authority of the State Legislature itself being subject to a restriction in that behalf, s. 126 may reasonably be read as subject to the same limitations. When the power of the Legislature with limited authority is exercised in respect of a subject-matter, but words of wide and general import are used, it may reasonably be presumed that the Legislature was using the words in regard to that activity in respect of which it is competent to legislate and to no other; and that the Legislature did not intend to transgress the limits imposed by the Constitution: see In re Hindu Women s Rights to Property Act, 1937(1). To in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution. After examining the history of octrois and terminal taxes, this Court held that octrois were taxes on goods brought into the local area for consumption, use or sale , and that they were leviable in respect of goods put to some use or other in the area but only if they were meant for such user. It was specifically clarified that the word sale was included only in 1954 in order to bring the description of octroi in the Act in line with the Constitution, and that the expression consumption and use together connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes or uses them up. 4. Looking to the trade of the Company, this Court held that sale by it directly to consumers or to dealers was merely the means for putting the goods in the way of use or consumption and that the word therein does not mean that all the act of consumption must take place in the area of the municipality. The Court therefore went to hold as follows.- In other words, a sale of the goods brought inside, even though not express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in Burmah Shell s case has been repeatedly taken. 92. In the case of Man Mohan Tuli vs. Municipal Corporation of Delhi Ors ., AIR 1981 SC Delhi 144 the Hon ble Supreme Court of India underlined the difference between a terminal tax and octroi. In doing so, it referred to the Federal Court judgment in Punjab Flour General Mills , the judgments in The Central India Spinning and Weaving and Manufacturing Company Limited, Burmah Shell , and others and then held as under: 14. Thus, from a consideration of the cases cited above, the following propositions emerge:- (1) Terminal tax and octroi are similar kinds of levies which are closely interlinked with (1) destination of the goods, (2) the user in the local area on arrival of the goods. Where the goods merely pass through a local area without being consumed therein the mere fact that the transport carrying the goods halt within the local area for transshipment or allied purposes would not justify the levy of either the terminal tax or octroi duty. This is because the halting of the goods is only for an incidental purpose to effectuate the journey of the goods to the final destination by unloading, sorting and relo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods were for its own consumption and use; the godown and siding were within Municipal Board limits; and, therefore, octroi was payable under the bye laws of the Municipal Board published under a Notification dated 18th May 1960; yet, no octroi has been paid, and hence the complaint. This complaint was sought to be quashed by filing a Criminal Case No.3291 of 1972 in the High Court of Allahabad under section 561-A of the Code of Criminal Procedure 1898, which is akin to or on par with section 482 of the Code of Criminal Procedure, 1973. Amongst several contentions raised before the High Court, it was found that the company admitted that it had brought into the Municipal area sugarcane by railway as pleaded by the Municipal Board without paying octroi, but submitted that octroi was not payable in view of the exemption granted by the State Government under section 157(3) of the U.P. Act.. The High Court rejected this argument and dismissed the petition. The aggrieved employees of the company carried the matter to the Hon ble Supreme Court of India. In dealing with the rival contentions, particularly about the nature of the levy, the Hon ble Supreme Court held as under : 6. The fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its. The Punjab Flour and General Mills Co. Ltd., Lahore which was importing for use or consumption grain into its factory which was situated within the Lahore municipal limits contended that the tax in question was a terminal tax, by whatever name it might have been called, falling under entry 58 of List I of the Seventh Schedule to the Government of India Act, 1935 and was not imposable in 1938 or in 1940 after the relevant provisions of the Government of India Act, 1935 had come into force. It was contended by the company that the tax in question did not fall under entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935. The Federal Court after explaining the difference between the terminal taxes and cesses which can be levied on goods imported into a local area for purposes of use, consumption or sale therein rejected the contention of the company with these observations: There appears to us a definite distinction between the type of taxes referred to as terminal taxes in entry No. 58 of List 1 of the Seventh Schedule and the type of taxes referred to as cesses on the entry of goods into a local area in entry No. 49 of List II. The former taxes must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is observed that the element of service to be rendered is treated as an ingredient of a terminal tax but that does not mean that when tax is clearly laid on goods when they are brought into a local area for purposes of use, sale or consumption, it ceased to be a tax levied under section 128 (1) (viii) read with entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 merely because of the reason given for granting exemption under the order the Provincial Government dated November 20, 1936 issued under section 157 (3) of the Act. There is no doubt that the octroi which was being levied in 1936 when the exemption was granted and the subsequent levy imposed in the year 1960 are both taxes levied under the Act and fall within the State List both under the Government of India Act, 1935 and under the Constitution. It was not a terminal tax falling under entry 58 of List I of the Seventh Schedule to the Government of India Act, 1935. It does not also fall under entry 89 of List I of the Seventh Schedule to the Constitution now. The said levy came within entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 and now falls under entry 52 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter open for determination by Provincial or local taxing authority, and the existence or non-existence of a provision of system of refunds cannot affect the tax being or not being a cess within entry No. 49. 8. It is also significant that the word octroi in section 128 (1) (viii) of the Act is found in the group of taxes referred to in section 128. All sums received by a Municipal Board on account of the various levies made under section 128 have to be credited to the municipal fund under section 114 of the Act which can be utilised for the purposes of the Municipal Board as stated in section 120 of the Act. The sum received as octroi is also dealt with like any other tax. There is no element of quid pro quo between the person who pays the octroi and the Municipal Board. Hence octroi being a tax it was competent to the Provincial Government to make an order under section 157 (3) of the Act exempting railborne sugarcane from payment of octroi. 94. Then, in the case of Indian Oil Corporation vs. Municipal Corporation Jullundhar Ors ., AIR 1993 SC 844 a somewhat similar controversy was considered by the Hon ble Supreme Court of India. There, the Indian Oil Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin that area. It rightly held that the authority of the state Legislature in those matters is subject to the restrictions imposed by Entry 52 and since source of power of section 113 of the Municipal Act is traceable to Entry 52, the wide language employed in section 113 of the Municipal Act had to be read down to mean that the Municipal corporation could levy octroi on articles and animals imported into a local area for consumption, use or sale therein and construing the provisions of section 113 in that manner held the same to be intra-vires. 8. We are in agreement with the High Court that the provisions of section 113 of the Municipal Act are not beyond the competence of the state Legislature and the same are to be read alongwith Entry 52 of List II of schedule VII of the Constitution. 9. Entry of goods within the local for area for consumption, use or sale therein is made taxable by the state Legislature on the authority of Entry 52 of List legislature and it obviously cannot have any authority more extensive than the authority of the state Legislature. since the state Legislature in view of Entry of goods for consumption use or sale into a local area, the municipality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e precise question which was involved was as to whether octroi was leviable on the goods imported within the municipal limits, stored in its depot there and exported therefore for use or consumption of the ultimate consumer outside the municipal limits. That case related to the sale of petroleum products by the IOC from its depot within the municipal limits of Jodhpur, Rajasthan, to its dealers outside the municipal limits. After considering the facts and circumstances of the case and various clauses of the agreement (which is identical to the agreement in the present case) Sabyasachi Mukharji, J. (as is Lordship then was) dealt with the case put by the Indian oil Corporation Respondent No. 2 and noticed: According to respondent 2, it had allotted the retail outlets to various dealers under dealer s agreement. Under the terms of the said agreement, respondent 2 was obliged to transport petroleum products out of its depots and supplied petroleum products to its dealers at the destination in its own truck tankers or the tankers of its contractors and obtained the signatures of the dealers of the retail and obtained the signatures of the dealers of the retail outlet in token of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they do not affect the levy. For the reasoning in Burmah Shell and Punjab Flour ( supra ), this argument must fail. It is apparent that the above submission overlooks the Constitutional entries and the nature of the levy. The levy is on entry for consumption, use or sale within the local area irrespective of whether the goods are brought from within the territory of India or from abroad. Mr. Dada s submissions overlook the intrinsic evidence in the Entry Tax Act. It is well-settled that all the provisions of the Act will have to be read together with the Schedule and the language thereof cannot be ignored. In the instant case, the wording of Entry Nos.2, 3 and 5 of the Schedule demonstrates the insertion of the words duty paid in Sr. No.2, 3 and 5 and Bonded is with reference to acts of bringing in the goods from abroad. Thus, considering the wide definitions and even the Schedule entries the acts and deeds of the petitioners fall within the charging provision of the Entry Tax Act. 96. Finally, the decision in the case of Tata Engineering Locomotive Company Limited Anr. vs. Municipal Corporation of the City of Thane Ors. , AIR 1992 SC 645 would also clinch the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use and consume . And concluded holding (at p. 912 of AIR) : In our opinion, the Company was liable to pay octroi tax on goods brought into local area (a) to be consumed by itself or sold by it to consumers direct and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area irrespective of whether such consumers bought them for use in the area or outside it . The Company was, however, not liable to Octroi in respect of goods which it brought into the local area and which was reexported . The ratio is thus not a mere sale inside that attracts octroi but a sale intended for consumption of the goods inside the octroi area though ultimately the person to whom it was sold for consumption does not consume the goods inside but does the same outside the limit. 11. After consideration of the judgment in Burmah Shell Company s case (supra) the Gujarat High Court in one of the cases arising for refund of octroi duty paid, took the view that octroi leviable on goods brought within the octroi limits for consumption, use or sale therein and that the word sale could not be given the narrow meaning of a sale for consumption to the ultimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out of such limits within a period of six months from the date of their import in such limits . 97. Mr. Dada has placed reliance on the judgment of this Court in the case of Batliboi Co. Pvt. Ltd. ( supra ). 98. A careful perusal of this decision becomes necessary. In Batliboi s case, it had entered into a contract with M/s. Kirloskar Brothers Limited who sold certain goods / articles complete with standard equipment and electrical equipment manufactured in Czechoslovakia. Batliboi had an import licence for import of this machinery. Prior to their contract with Kirloskars, Batliboi placed an order with the Czech manufacturer of the machine for the import of the machine in question. Batliboi also had filled in a tender with the Defence Department under which, inter-alia, they were required to supply this machine to that department. Thereafter, they made this offer to M/s. Kirloskar to sell the same machine. In the letter addressed to Kirloskars, they had mentioned that the machine would be sold provided the Defence Department releases the same. The terms of delivery are referred in the Division Bench judgment. After the order was placed with Batliboi for purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own the reliance placed on section 4 of the Sales Tax Act by Batlibois. A careful reading of paragraph 7 would denote as to how all the contentions of Batlibois have been rejected. 100. This judgment, therefore, cannot be of any assistance to Mr. Dada. It is apparent from a perusal of this decision that it does not support the argument canvassed before us nor it is a decision on the point at all for the levy of sales tax was in question and not entry tax. Secondly, on facts it was held that levy was on sale within the State of Maharashtra. 101. Then, reliance is placed on judgments of the Kerala and Gauhati High Court and the Patna and Jharkhand High Court. 102. Insofar as the Kerala judgment is concerned, we have carefully perused it. There the appellants were nonresident Indians who imported to India motor vehicles which they had used abroad. They had obtained customs clearance on payment of customs and levies as due. Some of them had their vehicles registered under the Motor Vehicles Act but a demand was raised for payment of entry tax. The other appellants were contractors who had brought in certain equipments manufactured abroad for the purposes of their busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the words employed by the Legislature are outside the State and with no further prescription, then, with great respect it is not possible to read any such limitation, much less a restriction in the Entry Tax Act. Therefore, and may be in peculiar facts of some cases, it is possible to hold that the entry tax cannot be sustained. However, upon a clear perusal of the provisions of the Act and merely relying upon a definition of the term value of the goods , with respect, it is difficult to agree with the view of the Division Bench. It is in these circumstances, with greatest respect to the Hon ble Division Bench of the Kerala High Court, that we differ. 108. If this view is taken, then, there is no difficulty in disagreeing with the single Judge judgment of the High Court of Gauhati in the case of Primus Imaging Private Limited ( supra ). There as well, after negating the challenge to the applicability of Article 286 and holding that this Article does not permit States to levy tax on the sale or purchase of goods which takes place in the course of import into or export out of the territory of India and would not cover the entry tax which levy is derived from Entry 52 of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinguish the judgment of the Jharkhand High Court. 112. For the above reasons, we are unable to agree with Mr. Dada that contextually the expression Entry of goods from outside the State would not include entry from outside the territory of India. Given the nature of the levy, we do not think that contextually or otherwise any restrictive or prohibitive prescription can be read into the Act. The provisions of the Act read together as a whole so also harmoniously lead to the conclusion that the State is not denuded of its power to impose entry tax on the import of goods from outside the country. The words outside the State cannot be restricted in their application to the boundaries or territory of a State. That would mean entry tax is not leviable on goods imported from abroad but brought within the local area for consumption, use or sale therein though such a tax is leviable on the goods brought in from other States within the territory. The latter Act of bringing the goods from other parts of the country or from other States within the same country is also an import within the meaning of the Act. We cannot, therefore, restrict the definition of the words import and imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (1) of section 2. The first proviso only states that the rate of tax to be specified in respect of any commodity shall not exceed the rate specified for that commodity under the Value Added Tax Act or the Maharashtra Purchase Tax on Sugarcane Act,1962. The second proviso states that the tax payable by the importer under this Act shall be reduced by the amount of tax paid, if any, under the law relating to general sales tax in force in the Union Territory or the State in which the goods are purchased by the importer. With greatest respect to the senior counsel, this proviso does not dilute or read down the definition of the terms entry of goods , import and importer , but it only clarifies that if the import is by the importer who has purchased the goods in another State or Union Territory of the country and in that area these goods when purchased attract general sales tax, then, the amount of such tax shall be reduced from the levy of entry tax. Beyond that, we do not see how the proviso controls the definition of the above terms and expressions. It rather reinforces our conclusion. Our conclusion is also reinforced by the language of sub-section (5) of section 3 which states ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Batliboi s and Diwan Brother s case (supra). 118. We are now left with another contention and namely that a tax on entry of goods into a local area is patently in violation of Article 301 and no further burden is required to be discharged by the petitioners. 119. We must at once clarify that in the entire petition we have not noticed any plea based on violation of the mandate of Article 301 of the Constitution of India. The entire petition is silent as far as such challenge is concerned. In the petition there is no plea as to how the petitioners act of bringing the goods in the local area for consumption, use or sale therein is interfered with contrary to the constitutional mandate. Even in the grounds from para 15 of the petition, there is not a single ground which would enable us to consider this plea. The petition has been amended and the riders are added. Even by the amendments, no such plea is raised. The plea is raised on the basis that in the Annexures to the writ petition, while furnishing a reply to the show cause notice and elsewhere during the course of arguments before the Assessing Authority, the First Appellate Authority and the Tribunal, there is speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. 304. Restrictions on trade, commerce and intercourse among States -Notwithstanding anything in article 302 or article 303, the Legislature of a State may by law- (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. 122. A bare perusal of Article 303 and particularly clause (1) would indicate that notwithstanding anything contained in Article 302, neither Parliament nor State Legislature shall have power to make any law giving or authorising the giving of any preference to one State over another or making or au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia as may be required in the public interest. Article 304: Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law: (a) impose on goods imported from other States (or the Union territories) any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest; Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the (1) [19661 1 S.C.R. 865. Legislature of a State without the previous sanction of the President. 7. The true scope and effect of those Articles was the subject matter of consideration in Atiabari Tea Co. Ltd. v. The State of Assam (1961) 1 SCR 809 = (AIR 1961 SC 232). The majority view was expressed by Gajendragadkar J. at p. 860 as follows: In construing Article 301 we must, therefore, have regard to the general scheme of our Constitution as well as the particular provisions in regard to taxing l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Government to levy a tax at such rate not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory Was constitutionally valid. It was held by this Court that normally a tax on the sale of goods-did not ,directly impede or hamper the flow of trade and Section 21 was no exception and was not violative of Article 301 of the Constitution. A similar view was expressed in the State of Madras v. K. Nataraja Mudaliar AIR 1969 SC 147 in which the question at issue was whether sections 8(2) and 8(5) of the Central Sales Tax Act, 1956 were intra vires of Arts. 301 and 303 of the Constitution. It was pointed out that an Act which was merely enacted for the purpose of imposing tax which was to be collected and to be retained by the State did not amount to a law giving or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, merely because of varying rates of tax prevailing in different States. At p. 150 of the report Shah, J., speaking. for the Court observed: The flow of trade does not necessarily depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fettered. 124. Thus, the test that must be satisfied is that the restrictions should directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions, but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. The argument that all taxes should be governed by Article 301, whether or not their impact on trade is immediate, direct or even remote is an extreme approach, one that the Hon ble Supreme Court of India has not upheld. We have already held in the foregoing paragraphs that in the present petition, such pleadings as might enable us to inquire further into this issue are hopelessly lacking. We have not been shown any material on which we can hold that the imposition of entry tax affects the movement of goods. The petitioners themselves have stated that the imported goods / commodities have been brought within the local area and for their own use and consumption. The goods are but a part of the raw material said to have been brought from abroad. The petitioners do not claim that the movement of these goods into the local area was restricted. However, the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay Sales Tax Act. However, the absence of any provision by which a refund / rebate / set off of the liability to pay entry tax vis- -vis the sales tax enabled the Division Bench to hold that even though goods entering the local area from within the State do not bear sales tax, goods entering the local area from outside the State are subject to entry tax. That is how it proceeded to summarize the controversy in paragraphs 28, 29 and 30. Eventually, after the entire discussion on the subject of absence of refund / rebate / set off, what the Division Bench holds is that by levying an entry tax on goods which enter the local area from outside the State, while exempting from sales tax similar goods entering the local area from within the State, the State has, in fact, created a tax barrier in contravention of Article 301 s guarantee of free flow of trade, commerce and intercourse throughout the territory of India. This is the understanding of the Division Bench of the tax barrier created by the levy of entry tax. On introduction of entry tax, manufacturers opted to purchase raw materials from within the State because the entry tax barrier made bringing materials from outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any further. What we have thus before is no pleading, no materials but a general submission. It would be too risky and improper on our part to consider the issue in further details. 126. We are also taking the above view because the affidavit that is filed in reply by the State to the writ petition contains a specific statement of fact that this Court has earlier held that Entry No.13 to the Schedule to the Maharashtra Entry Tax Act insofar as it purports to levy entry tax on furnace oil and low sulphur waxy residue oil to be unauthorized and unconstitutional. Although the tax was held to be non-compensatory, according to the respondents, the main reason for holding Entry No.13 as unauthorized was due to non-availability of set off to such importers of the raw materials who utiliized it for manufacture of final product in the local area vis- -vis those manufacturers of final product who purchased the raw material locally, namely, within Maharashtra and that according to the Division Bench violated the mandate of Article 301. The State inserted sub-clause (iv) of clause (a) of sub-section (1) of section 42 of the Bombay Sales Tax Act, 1959, retrospectively and it was deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are 1st April 2005 to 31st March 2006 and 1st April 2008 to 31st March 2009. According to Mr. Sonpal, by virtue of section 23(3A) of the MVAT Act, the assessment has to be completed on or before 30th June 2013, for the year 2005 2006 and as per the third Schedule to section 23(2) on or before 30th June 2013, for the year 2008 2009. The assessment for 2005 2006 is completed on 29th June 2013 and for 2008 2009 on 30th March 2013. 132. On the other hand, Mr. Dada has contended that we cannot ignore and brush aside Rule 8, for what we are dealing with is an assessment of entry tax. It is the liability to pay entry tax which is in issue. If the machinery for assessment under a distinct statute has to be resorted to for assessing the liability to pay entry tax, that does not mean a substantive provision in the Entry Tax Act must be ignored or termed as irrelevant. 133. What is important to note is that the Tribunal in the impugned order has endorsed the view of the respondents. It relies on section 6 to hold that the Assessing Authority under the MVAT Act has authority to assess the entry tax. The Tribunal has emphasized for this purpose they may exercise all or any of the pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exception with regard to the offences and penalties are to be found in sections 7 and 8 of the Entry Tax Act. However, we have noted from the arguments of Mr. Sonpal that Chapter III of the Entry Tax Rules deals with payment of tax, namely, the procedural provision regarding filing of returns, and payment into Government Treasury and/or method of payment of tax, interest and penalty are incorporated in the Rules (See Rules 5 and 6). The return- cum -challan has to be filed in the form specified. A registered importer shall furnish the return- cum -challan under sub-rule (1) of Rule 7 within 25 days immediately succeeding the month for which the return- cum -challan is required to be filed. By sub-rule (3) of Rule 7, an importer may furnish revised return- cum challan in the same Form within three months from the date prescribed for submission of the original return. 135. Then comes Rule 8 and which states that the amount of tax due from an importer shall be assessed by the concerned Assessing Authority within one month from the date of detection of his liability to pay the tax. This is the stipulation regarding unregistered importer and for a registered importer, the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter three years from the end of the year containing the said period. (2) Where the return in respect of any period is filed by a registered dealer by the prescribed date and if the Commissioner considers it necessary or expedient to ensure that return is correct and complete, and he thinks it necessary to require the presence of the dealer or the production of further documents, he shall serve on such dealer, a notice requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced all documents on which such dealer relies in support of his return, or to produce such documents or evidence as is specified in the notice. On the date specified in the notice, or as soon as may be thereafter, the Commissioner shall, after considering all the documents or evidence which may be produced, assess the amount of tax due from the dealer: Provided that, if a registered dealer fails to comply with the terms of any notice issued under this sub-section, the Commissioner shall assess, to the best of his judgment the amount of tax due from him: Provided further that, no order of assessment under this sub-section shall be made after the expiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of sale or purchase, or that any claim has been incorrectly made, then, in such a case, notwithstanding that any notice for assessment has been issued under other provisions of this section or any other section of this Act, the prescribed authority may, after giving such dealer or person a notice in the prescribed form and a reasonable opportunity of being heard, initiate assessment of the dealer or person in respect of such transaction or claim. (b) During the course of any proceedings under section 64, if the prescribed authority is satisfied that the tax has been or is sought to be evaded, as provided under clause (a) by any dealer or person, the said authority may, after issuing a notice in the prescribed form and after giving a reasonable opportunity of being heard to such dealer or person, proceed to assess such dealer or person as provided in clause (a) in respect of any such transaction or claim relating to any period or periods and such authority shall, notwithstanding anything contained in section 59, be deemed to have the requisite jurisdiction and power to assess such dealer or person in respect of such transaction of sale or purchase or claim, covered by clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that, the assessment order shall be passed, by the Commissioner to the best of his judgment, where necessary, within six years from the end of the year containing the said period. (7) Where a fresh assessment has to be made under this section to give effect to any finding or direction contained in any order made under this Act including an order made by the Tribunal or the High Court or the Supreme Court, then, notwithstanding anything contained in this section, such assessment shall be made within a period of thirty-six months from the date of communication of such finding or, direction contained in the order, as the case may be, to the Commissioner: Provided that, if a certified copy of the said order is supplied by the dealer concerned to the Commissioner earlier than the said date of communication, then the period of thirty six months shall be counted from the date of the said supply. (8) The Commissioner may call for the record of any matter and conduct an examination in respect of the same, in the manner as provided in subs-section (2), call for the books of accounts and other evidence in such matter and after hearing the dealer concerned pass an appropriate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of assessment. Provided further that if no order is passed within the aforesaid period of three months, then the assessment order shall be deemed to be cancelled. (12) Notwithstanding anything contained in subsection (2), (3) (4) or, as the case may be, (5), the fresh order of assessment as provided under subsection (11) may be passed before the expiry of a period of eighteen months from the date of service of the cancellation order or, as the case may be, from the date on which the assessment order is deemed to have been cancelled under the second proviso to sub-section (11). (13) Notwithstanding anything contained in this section, in case of a dealer, who undertakes the construction of flats, dwellings or buildings or premises and transfers them in pursuance of an agreement, along with land or interest underlying the land and in whose case, the limitation for making an order of assessment, for any of the periods, expires on the 31st March 2014, then the order of assessment, for such periods, may be made on or before the 30th September 2015. 140. A perusal of this section would indicate that it is a code by itself for assessment. There, sub-section (1) provides th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arred. 142. Now, a perusal of the requisite forms would reveal as to how they deal with distinct sections. Form-501 is traceable to Rule 17A(2) and Rule 60(1) of the Maharashtra Value Added Tax Rules, 2005. The same is a form in which application for refund under section 51 of the Maharashtra Value Added Tax Act, 2002, has to be filed. 143. In the present case, section 51 was invoked by the petitioners and which deals with grant of refunds. There we must notice that this section as a whole was substituted by Maharashtra Act No.32 of 2006. Where the registered dealer under the MVAT Act has in any return, fresh return or revised return, shown any amount to be refundable and has not undertaken to adjust such amount against the amount due as per any return in accordance with section 50, then, the Commissioner shall, on an application made by the dealer and subject to Rules and other provisions of the Act grant refund of such amount to the dealer. How that application has to be dealt with and how refund has to be granted is specified in the further sub-sections of section 51. The order of assessment does not indicate nor it is the petitioners case that they have filed any ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not be required to pay the tax on any entry of goods effected by him into a local area immediately before the time he becomes so liable for registration. This is a provision specifically referring to the importer and sub-section (4) of section 3 deals with payment by the importer. 146. The burden of payment of tax falls on the entry of goods into a local area from any place outside the State for consumption, use or sale therein. Since import means bringing or causing to be brought or receiving any goods into a local area from a place outside the State, and importer means person who imports any goods into a local area for consumption, use or sale therein, it is apparent that the import to a local area for consumption, use or sale therein would be taken as entry of goods for that purpose and that is how the importer would be obliged to register himself. The registration is contemplated by section 4 of the Maharashtra Entry Tax Act and every importer who is liable to pay tax under this Act shall, if he is a dealer registered or liable for registration under the Sales Tax Act, within such time as may be prescribed for the purpose of making an application in the prescribed form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46C. It in these circumstances that we are unable to uphold the argument of Mr. Dada that the proceedings are time-barred. The return- cum -challan duly filed and as indicated in the notice was not the only issue dealt with by the Assessing Officer. Rather, the proceedings were to verify the correctness of the returns filed by the petitioners and to verify the tax liability of the dealer coupled with an application in Form-501 to the MVAT Rules filed by the petitioners for refund. The application for the period 2005 2006 and the revised application for refund in Form-501 of the MVAT Rules was dated 30th March 2009. Partial refund was already granted. The dates thereof are specified. However, the petitioner were not satisfied with this partial refund and made a revised application for refund. The petitioners, therefore, invoked the Maharashtra Value Added Tax Act, 2002, the Maharashtra Value Added Tax Rules, 2005 and all the the prescriptions thereunder enabling seeking refund. The petitioner could not have filed any application for refund after the prescribed time-limit for the same and if indeed there is one. Therefore, it is too late in the day to raise the plea of a time-bar. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the Assessing Authority in its order dated 21st June 2013, for the period 2005 2006 made no reference to the relevant Schedule Entry whereas in the second assessment order dated 30th March 2013, for the financial year 2008 2009, a passing reference has been made to the Schedule Entry No.12. The Revenue submitted that the goods were covered under Entry No.13 and this has been accepted by the Tribunal. 150. The argument further is that Entry No.13 relied upon by the Tribunal read as petroleum fuel oil, including heavy furnace oil and residual furnace oil. The argument is that this entry was deemed to be in force from the inception of the Act till 31st March 2005. By way of revival the amendment of the Schedule as per section 5 of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2007, which was enacted in August, 2007, Entry No.13 was revived retrospectively but only for the period prior to 31st March, 2005. This amendment is not relevant to the period in question. So far as Entry No.12 is concerned, that is relied upon by the respondents in the present case, namely, the writ petition. 151. To appreciate these contentions of the petitioners, we must also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule to the Maharashtra Entry Tax Act, 2002, as it existed before 1st April 2005, shall be deemed to have been revived and reenacted in the same form as it then existed with certain modifications and that is petroleum fuel oil, including heavy furnace oil and residual furnace oil. Thus, furnace oil, including heavy furnace oil and residual furnace oil is common in the description of goods. It is a substantive entry by itself (Entry No.12) and it is also part and parcel of the petroleum fuel oils (Entry No.13). 154. The Tribunal in this case has held that the attempt of the petitioners to demonstrate as if there was no Schedule Entry during the relevant period must fail. We also agree with the Tribunal in that regard. This is an attempt of desperation. An argument of this nature and though canvassed in different form before us has been noted by the Tribunal and in paragraphs 9 and 10 of its order it states that the entries referred to furnace oil are also inclusive of residual furnace oil. Entry No.13 covers furnace oil and low sulphur waxy oil. If the Schedule Entry No.13 mentions petroleum fuel oil, inclusive of heavy furnace oil and residual furnace oil, then, the attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the position emerging from the record. We do not think that in the extraordinary, equitable and discretionary jurisdiction of this Court, we should, therefore, interfere with the concurrent findings of fact. 157. As a result of the above detailed discussion, we do not find any merit in the Writ Petition and the Appeals. 158. In the view that we have taken, we think that unless the petitioners discharge their tax liability at their instance, we have no reason to consider their plea of revenue neutrality. It is demonstrated that they have failed to discharge the tax liability and in full. The figures in that regard are pointed out in the affidavit-in-reply and which emerge from the record of the taxing authorities. We have no reason to discard them. Therefore, other pleas need not be examined at the instance of the petitioners and particularly when justice does not lie on their side. 159. In the view that we have taken, we need not make any reference to the decisions cited by Mr. Sonpal and further details. Equally, once we have negatived the contentions of Mr. Dada on the main issue, then, we need not examine whether the mandate of Article 301 is complied with. That ..... X X X X Extracts X X X X X X X X Extracts X X X X
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