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TMI Blog2025 (2) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... OF 2013 (Old No: GA 2729 OF 2013), WITH APO 117 OF 2018 IA NO: GA 2 OF 2013 (Old No: GA 2727 of 2013), WITH APO 122 OF 2018 IA NO: GA 2 OF 2013 (Old No: GA 2713 OF 2013) WITH APO 123 OF 2018 IA NO: GA 2 OF 2013 (Old No: GA 2719 of 2013) GA 3 OF 2017 (Old No: GA 3163 of 2017), WITH APO 125 OF 2018 IA NO: GA 2 OF 2013 (Old No: GA 2720 of 2013), WITH APO 126 OF 2018 IA NO: GA 2 OF 2013 (Old No: GA 2723 OF 2013), WITH APO 128 OF 2018 IA NO: GA 1 OF 2013 (Old No: GA 2187 OF 2013), MAT 1398 of 2013, MAT 1399 of 2013, MAT 1400 of 2013, MAT 1408 of 2013, COT 41 of 2017, MAT 1385 of 2013, MAT 1386 of 2013, MAT 1387 of 2013, MAT 1388 of 2013, MAT 1389 of 2013, MAT 1390 of 2013, MAT 1391 of 2013, W.P.T.T. 4 of 2023, W.P.T.T. 6 of 2023, IA NO: CAN 1 of 2024, CAN 2 of 2024, CAN 6 of 2024, W.P.T.T. 2 of 2024, W.P.T.T. 3 of 2024, W.P.T.T. 4 of 2024, W.P.T.T. 5 of 2024, W.P.T.T. 6 of 2024, W.P.T.T. 7 of 2024, W.P.T.T. 8 of 2024, W.P.T.T. 9 of 2024, W.P.T.T. 10 of 2024, W.P.T.T. 11 of 2024, W.P.T.T. 12 of 2024, W.P.T.T. 13 of 2024, W.P.T.T. 14 of 2024, W.P.T.T. 15 of 2024, W.P.T.T. 16 of 2024, W.P.T.T. 17 of 2024, W.P.T.T. 18 of 2024, W.P.T.T. 19 of 2024, W.P.T.T. 20 of 2024, W.P.T.T. 21 of 2024, W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alisha Das, Adv. For the Rohit Ferrotech Ltd. & Anr.: Mr. Jaybrata Mishra, Adv. Mr. Suman Bhowmik, Adv. Mr. Samrat Das, Adv. Ms. Elina Dey, Adv. Ms. Megha Datta, Adv. For the Respondent (in WPTT 6 of 2023), For Biocon Ltd., Tata Play Ltd., Banomali, Trading, Vistare, Pringing, Strides Sasun Ltd., Shyam Enterprise, Churiwal Commercial Co., Churiwal Technopack Pvt. Ltd., Premchand Jute Industries Pvt. Ltd.: Mr. Avra Mazumdar, Adv., Ms. Alisha Das, Adv., Mr. Suman Bhowmik, Adv., Mr. Samrat Das, Adv., Ms. Elina Dey, Adv. For the Respondent in WPTT 6 of 2023 (Ramco Industries Ltd.): Ms. Sweta Mukherjee, Adv. For the State: Mr. Kishore Dutta, Ld. A.G., Mr. Anirban Ray, Ld. G.P, Mr. T.M. Siddiqui, Sr. Adv., Mr. Debasish Ghosh, Adv., Mr. Tanoy Chakraborty, Adv., Mr. Saptak Sanyal, Adv. For the Respondent (Samsung) in WPTT 6 of 2023: Mr. Sujit Ghosh, Sr. Adv., Ms. Mannat Waraich, Adv., Mr. Ashray Behura, Adv. Mr. Pujon Chatterjee, Adv. Mr. Sutosom Bhattacharyya, Adv. DEBANGSU BASAK, J.:- 1. We have heard appeals directed against the impugned judgement and order dated June 24, 2013 passed in a batch of writ petitions assailing the vires of the West Bengal Tax on Entry of Goods into Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Single Judge observed that, compensatory tax is imposed for a specific purpose or for few specific identifiable purposes. The Act of 2012 has violated Article 309 and 304 (a) of the Constitution of India as it was not compensatory. Moreover, State has failed to obtain Presidential sanction under Article 304 (b) of the Constitution of India. Learned Single Judge has also observed that, where the assessee alleges discrimination, it is for the assessee to establish the same and that hardship of an assessee is no ground to challenge the validity of a fiscal statute. 8. Learned Advocate General has submitted that, learned Single Judge was pleased to stay the operation of the impugned judgement and order dated June 24, 2013 for a period of 6 weeks. Appeals had been preferred against the impugned judgement and order within time. The Appeal Court had passed an interim order on July 31, 2013 by which the Appeal Court permitted assessment proceedings to continue under the Act of 2012. Appeal Court however had directed that, there would be no refund of the entry tax already collected. 9. Learned Advocate General has contended that, during the pendency of the appeals, 101st Amendment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has submitted that, Entry Tax of the State had also fallen for consideration in Jindal Stainless Ltd (supra). He has pointed out the various paragraphs of Jindal Stainless Ltd (supra) where the State Act was referred to, in support of such contention. He has contended that, the only requirement is that Entry Tax must be non-discriminatory in the sense that, State must not discriminate between the goods imported from other States and the goods produced in the State. Moreover, according to him, Jindal Stainless Ltd (supra) has recognised that a discriminatory Entry Tax may be levied but on valid grounds. He has pointed out that, individual case of hostile discrimination, if any, is to be determined by the regular benches hearing the matters. According to him, learned Single Judge in the impugned judgement and order has also noted that, if discrimination is alleged, such a case has to be made out by the assessees. No specific case of discrimination has been made out by any of the assessees. 13. Referring to 2019 volume 17 Supreme Court Cases 815 (State of Uttar Pradesh versus Indian Oil Corporation) learned Advocate General has contended that, post Jindal Stainless Ltd (supra) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Entry Tax Act, 2012 by the West Bengal Finance Act, 2017. Referring to 1962 SCC Online SC 61 (Ram Krishna Rama Nath versus Janpad Sabha) learned Advocate General has contended that, a power to amend or repeal is coextensive with the power to make a law. 17. A number of assessees have made submissions in course of hearing of the appeals and the writ petitions. 18. Learned senior advocate appearing for Samsung India Electronics Private Limited (hereinafter referred to as Samsung) has submitted that, essentially, there are 4 areas of concern for the Court in the present appeals and the writ petitions. First amongst the areas of concern is whether the decision of Jindal Stainless Ltd (supra) has struck down the impugned judgement and order of the learned Single Judge dated June 24, 2013 or not. Secondly, did the impugned judgement and order of the learned Single Judge dated June 24, 2013 obliterate the Act of 2012 as it stood prior to its amendment or was such Act of 2012 in force in view of the limited stay order on not. Thirdly, was there a source of power vested with the State of West Bengal at the time when the amendment by the West Bengal Finance Act, 2017 had been affected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntentions, learned senior advocate appearing for Samsung has relied upon 1962 SCC Online SC 8 (Smt. Ujjam Bai versus State of Uttar Pradesh), 1996 Volume 1 Supreme Court Cases 435 (State of Kerala vs. M.K. Kunhikannan Nambiar Manjeri Manikoth, Naduvil and Others) and 1997 Volume 3 Supreme Court Cases 443 (Tayabbhai M. Bagasarwalla and Another vs. Hind Rubber Industries PVT. Ltd. and Others.). 24. Learned senior advocate appearing for Samsung has submitted that, discriminatory aspect of any Entry Tax Act is to be considered on an individual assessee bringing on record adequate material in that regard. In support of such contention, he has relied upon 2021 Volume 11 Supreme Court Cases 776 (Bharti Airtel Limited vs. Assessing Authority, Orissa Entry Tax and Another), 2019 Volume 17 Supreme Court Cases 815 (State of Uttar Pradesh and Others vs. Indian Oil Corporation Limited and Others) and 2017 SCC Online SC 2197 (State of Andhra Pradesh and Others vs. Sree Rayalaseema Alkalies and A. Che. And Others). 25. Learned senior advocate appearing for Samsung has contended that, there are various provisions in the Act of 2012 prior to its amendment, which are discriminatory in nature. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act of 2012 to be ultra vires and the Division Bench not having stayed such judgement and order, no formal amendment could have been legally carried out as purportedly effectuated by the West Bengal Finance Act, 2017. He has contended that, since the amendment is invalid, the discriminative burden of entry tax continues to remain. 30. Learned senior advocate appearing for Samsung has contended that, the transitional provision of section 19 of the 101st Constitutional Amendment Act does not vest the state legislature with the requisite legislative powers to validate the amendment made to the Act of 2012. He has pointed out that the 101st Constitutional Amendment Act, 2016 was promulgated on September 8, 2016 with effect from September 16, 2016. He has referred to section 19 thereof. He has pointed out that Entry 52 of List II was omitted with effect from September 16, 2016. State of West Bengal had promulgated the West Bengal Finance Act, 2017 on March 6, 2017 ostensibly in exercise of legislative powers conferred under section 19 of the 101st Constitutional Amendment Act of 2016. 31. Relying upon 2023 SCC Online SC 1376 (State of Telangana and Others vs. Tirumala Construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that, the amendments made to the Entry Tax Act, 2012 by the West Bengal Finance Act, 2017 were never meant to be implemented and brought about to nullify the judgement of the learned Single Judge without curing the defects in substance. 35. Learned advocate appearing for Godrej Consumer Products Ltd has contended that, his client challenged the constitutionality of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012 by way of a writ petition being WP No. 128 of 2018. Such a writ petition had been allowed by the impugned judgement and order of the learned Single Judge. He has contended that, the impugned judgement and order of the learned Single Judge should not be set aside, as the provisions of the Act of 2012 under challenge in the writ petition are unconstitutional and discriminatory. 36. Learned Advocate appearing for Tata Play Limited and Biocon Ltd has submitted that, the impugned order of the learned Single Judge stands impliedly overruled by Jindal Stainless Ltd (supra) and 2021 Volume 11 Supreme Court Cases 705 (State of Kerala Vs. Father William Fernandez and others). However, he has contended that, the portion of the impugned judgement and order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition has not been disposed of by the Division Bench. In any event, he has contended that, the impugned judgement and order continues to remain in force. In support of such contention, he has relied upon 1992 volume 3 Supreme Court Cases 1 (Shree Chamundi Mopeds Ltd versus Church of South India Trust Association) and 2007 volume 3 Calcutta High Court Notes 178 (Pijush Kanti Chowdhury versus State of West Bengal). 41. Learned advocate appearing for Ruchi Soya Industries Ltd has contended that, the amending Act cannot have retrospective effect. He has relied upon 2016 Volume 15 Supreme Court Cases 125 (Jayam And Company Vs. Assistant Commissioner and Another). He has contended that, test laid down by the Supreme Court for giving retrospective effect have not been satisfied. He has pointed out that, Entry Tax Act came into effect from April 1, 2012 and that, the amendment introduced in March 2017 has created a new liability. According to him, benefit of nontaxability for intra-local area entries was enjoyed for the period from April 1, 2012 to March 2017 which is sought to be taken away by the amendment. 42. Learned advocate appearing for Ruchi Soya Industries Ltd has contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready collected. 47. Promulgation of the Constitution 101st Amendment Act, 2016 had occurred on September 8, 2016. The Constitution 101st Amendment Act, 2016 had come into force on September 16, 2016. 48. During the pendency of the appeals and the stay petitions of the State, Supreme Court had pronounced Jindal Stainless Ltd (supra) on November 11, 2016 holding that, compensatory tax theory is not compatible with the constitutional scheme delineated by Part III of the Constitution. It has however left the issue of levies of Entry Tax satisfying the test of whether the tax burden of goods imported from other States and goods produced within the State, to be determined by the regular bench hearing such matters. 49. State had applied before the Supreme Court in TP (C) No. 291 of 2017 for transfer of the pending matters before the High Court to the Supreme Court on February 23, 2017. By an order dated March 21, 2017 Supreme Court had dismissed TP (C) 291 of 2017 and directed the High Court to proceed with the matter in accordance with the law and in light of the judgement passed in Jindal Stainless Ltd (supra). 50. State of West Bengal had promulgated the West Bengal Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscriminatory tax would not constitute an infraction of Article 301. 1159.3. Clauses (a) and (b) of Article 304 have to be read disjunctively. 1159.4. A levy that violates Article 304 (a) cannot be saved even if the procedure under Article 304 (b) or the proviso thereunder is satisfied. 1159.5. The Compensatory Tax Theory evolved in Automobile Transport case [Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, AIR 1962 SC 1406 : (1963) 1 SCR 491] and subsequently modified in Jindal case [Jindal Stainless Ltd. (2) v. State of Haryana, (2006) 7 SCC 241] has no juristic basis and is therefore rejected. 1159.6. The decisions of this Court in Atiabari [Atiabari Tea Co. Ltd. v. State of Assam, AIR 1961 SC 232 : (1961) 1 SCR 809], Automobile Transport [Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, AIR 1962 SC 1406 : (1963) 1 SCR 491] and Jindal [Jindal Stainless Ltd. (2) v. State of Haryana, (2006) 7 SCC 241] cases and all other judgments that follow these pronouncements are to the extent of such reliance overruled. 1159.7. A tax on entry of goods into a local area for use, sale or consumption therein is permissible although similar goods are not produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned judgement and order of the learned Single Judge remained pending without a formal order of disposal of the same. The appeals therefore are required to be formally disposed of by us as an Appeal Court. We have to return a finding as to whether, the impugned judgement and order of the learned Single Judge following the overruled decisions of the Supreme Court rendered in Atiabari (supra), Automobile Transport (supra) and Jindal Steel Ltd (supra), in deciding the constitutional validity of the Entry Tax Act, 2012 should be sustained or not. 62. We have already returned a finding that, learned Single Judge, in the impugned judgement and order dated June 24, 2013 proceeded on the basis of the ratio laid down in Atiabari (supra), Automobile Transport (supra) and Jindal Steel Ltd (supra) to decide on the constitutional validity of the Entry Tax Act, 2012. Consequently, we hold that, the impugned judgement and order dated June 24, 2013 cannot survive, subsequent to the pronouncement of Jindal Stainless Ltd (supra). 63. In view of the discussions above, respectfully, we answer the first issue by setting aside the impugned judgement and order dated June 24, 2013 passed by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd being made. 69. Shree Chamundi Mopeds Ltd. (supra) has considered the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 and held that, when the High Court passes an interim order staying the operation of the order of the Appellate Authority exercising powers under the provisions of the Act of 1985, the same does not revive the appeal which had been dismissed as no such proceedings was pending before the Appellate Authority. 70. Pijush Kanti Chowdhury (supra) has held that, passing of an interim order staying the operation of a judgement, does not mean that, the existence of the judgement is wiped out. 71. Applying the principles of Shree Chamundi Mopeds Ltd (supra) and Pijush Kanti Chowdhury (supra) in the facts of the present case, the interim order passed by the appeal Court dated July 31, 2013 did not wipe out the impugned judgement and order of the learned Single Judge dated June 24, 2013, nonetheless, at the same time, the interim order had the effect of keeping the Entry Tax Act, 2017 in operation, in the manner as modulated by the appeal Court. 72. Authorities that have been cited at the bar namely, Ujjam Bai (supra), M.K. Kunhikannan Nambiar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 2012 were amended. Amendments were given retrospective effect from April 1, 2012 that is the date when the Entry Tax Act, 2017 came into effect. 76. Prior to the amendment of section 4 (5) (b) and (c) of the Entry Tax Act, 2012 the same were as follows: - "4. ....................................................................................... (5)........................................................................................ (b) turnover of imports relating to entry of specified goods into a local area, have been purchased in the same form against a tax invoice, or invoice, or bill issued under the West Bengal Value Added Tax Act, 2003, or the West Bengal Sales Tax Act, 1994, by a dealer registered under the West Bengal Value Added Tax Act, 2003, or the West Bengal Sales Tax Act, 1994, as the case may be; (c) turnover of imports relating to entry of specified goods into a local area where it is proved to the satisfaction of the Commissioner that such goods have been transported from within West Bengal from another place of business of such dealer or importer other than a dealer;" 77. Section 5 of the West Bengal Finance Act, 2017 is as follows: - "5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, interest, late fee or penalty so paid; (iii) refund shall be made upon assessment to a dealer who has already paid the tax but is covered by clause (b) of sub-section (5) of section 4 of the said Act; and (iv) no court shall enforce any decree or order directing the refund of any tax, interest, late fee or penalty so paid: Provided that nothing in this section be construed as preventing any person from questioning, in accordance with the provisions of the said Act and rules made thereunder, the assessment of any tax for any period, or from claiming refund of any tax, interest or late fee paid by him in excess of the amount payable by him under the said Act." 79. Section 6 of the West Bengal Finance Act, 2017 validates the steps taken under the Entry Tax Act, 2012 notwithstanding anything contained in any judgement, decree or order of any Court or other authority. By the deeming clause introduced, it has made steps taken under the Entry Tax Act, 2012 to be done as amended by section 5 of the principal Act. 80. Bharti Airtel Limited (supra), has permitted the assesses to file a fresh writ petition with adequate pleadings. Similar liberty has been granted in State of Utta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the teeth of the prohibition contained in Article 13 (2) of the Constitution is ab initio void in its entirety, non-nest, nullity and still born, no rights whatsoever could have flown from such an enactment and that enactment could not have any operation whatsoever. 86. Tirumala Constructions (supra) has considered section 19 of the 101st Constitutional Amendment Act and held that, section 19 and 20 thereof constitute incidental and transitory provisions with limited life. With regard to section 19 thereof it has held that it was not comparable to a mere parliamentary enactment and was not a mere legislative device. 87. Jayam and company (supra) has considered retrospective amendment to a tax act in the context of Tamil Nadu Value-Added Tax Act, 2006. It has observed that, in the realm of fiscal legislation, legislature has the power to make provision retrospectively. However, it has laid down principles and test which must be kept in mind while enacting a fiscal legislation with retrospective effect. 88. Applying the principles that have been laid down in Jayam and company (supra), it cannot be said that, the retrospective amendments introduced to the Entry Tax Act, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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