9911796707
TMI BlogCompensatory Or Complementary tax doctrineX X X X Extracts X X X X X X X X Extracts X X X X ..... minatory tax as achieving a legitimate local purpose that cannot be achieved through nondiscriminatory means. See Chemical Waste, supra, at 346, n. 9 (referring to the compensatory tax doctrine as a justification for a facially discriminatory tax). Under that doctrine, a facially discriminatory tax that imposes on interstate commerce the rough equivalent of an identifiable and substantially similar tax on intrastate commerce does not offend the negative Commerce Clause. Maryland, supra, at 758759. See also Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, MANU/USSC/0058/1987: 483 U.S. 232, 242243( 1987); Armco, U.S., AT 643. To justify a charge on interstate commerce as a compensatory tax, a State must, as a threshold matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commerce must be shown roughly to approximate but not exceed the amount of the tax on intrastate [516 US 333] commerce. Oregon Waste, 511 US, at 1103, 128 L Ed 2d 13, 114 S Ct 1345. Finally, the events on which the interstate and intrastate taxes are imposed must be 'substantially equivalent'; that is, they must be sufficiently similar in substance to serve as mutually exclusive 'proxies' for each other. The above cases of Supreme Court give different concept of compensatory tax as compared to cases in Australia as well as in Automobile Transport . In U.S., The compensatory tax doctrine was invoked to save facially discriminatory taxes imposed on interstate trade, to make interstate commerce bear a burden already borne by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rican Constitution corresponding to our Article 19(1)(g) or Article 301. In the United States the problem was that if gambling did not come within the commerce clause, then neither the Congress nor any State Legislature could interfere with or regulate inter State gambling. Our Constitution, however, has provided adequate safeguards in clause (6) of Article 19 and in Articles 302305. The scheme of the Australian Constitution also is different from that of ours, for in the Australian Constitution there is no such provision as we have in Article 19(6) or Articles 302304 of our Constitution. The provision of Section 92 of the Australian Constitution being in terms unlimited and unqualified the judicial authorities interpreting the same had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t XIII render such a construction of Art.301 at once unnecessary and impermissible. Gajendragadkar, J. in Khyerbari Tea Company Ltd.- 1963 (12) TMI 24 - Supreme Court, had also expressed opinion that compensatory or regulatory tax theory as introduced in the Australian decisions is not to be made applicable in Part XIII. Following was observed: The majority view in the Atiabari case proceeded on the basis that the Australian decisions which dealt with the scope and effect of s.92 of the Australian Constitution would be of no assistance in constructing the effect of the provisions in Part XIII of our Constitution, because the legislative, historical and political background, the structure and the effect of the relevant provisions contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory tax can be imposed only for public purpose which fact is not denied by any of the parties before us. Can it be said that a tax which is a compensatory in nature need not to be subject to restriction as contained in part XIII ? If it is accepted that once a tax is held compensatory tax it goes out of reach of Part XIII, it will be carving a new exception to Article 301 which is not contemplated in the constitutional scheme. The framers of the Constitution after providing for freedom of trade, commerce and intercourse in Article 301 laid down exceptions to the said freedom in Article 302 to 306. The exceptions laid down in the constitutional scheme are self contained and no new exception can be added by judicial interpretation. Can a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The scheme of Constitution of India indicates that wherever it was contemplated to insulate any provision from challenge, expressed provisions have been made to provide for such insulation. Article 31B is one of such examples which provides that none of the Acts and Regulations specified in IXth Schedule shall be deemed to be void or ever to have become void on the ground of such Act, Regulation or provision is inconsistent with or takes away or abridges any of the rights conferred by Part III. The Constitutional Scheme as delineated by Part XIII does not indicate that a particular type of legislation, i.e., compensatory tax is out of Part XIII. Reading any such protection to compensatory tax legislation is against the constitutional ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
