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Matrix Laboratories Ltd V/S Asst. Commissioner of Commercial Tax

    W.P. Nos. 3009 of 2005, 9444, 10557 of 2013, 2811 of 2014, 2799 of 2015, 2027 of 2017, 2007 of 2018 and 7228 of 2009

    Decided On, 19 April 2018

    At, High Court of Madhya Pradesh Bench at Indore

    By, THE HONORABLE JUSTICE: P.K. JAISWAL AND THE HONORABLE JUSTICE: VIRENDER SINGH

    For Petitioner: P.M. Choudhary, Senior Counsel and A. Prabhalkar And For Respondents: H.Y. Mehta, Government Advocate



Judgment Text


1. These writ petitions relate to entry tax levied on goods imported from different Countries and brought into local area of a State.

2. W.P. No. 3009/2005, has been filed for the Assessment Year 2000-2001, W.P. No. 7228/2009, has been filed for the Assessment Year 2004-05, W.P. No. 9444/2013, has been filed for the Assessment Year 2010-11, W.P. No. 10557/2013, has been filed for the Assessment Year 2008-09, W.P. No. 2811/2014, has been filed for the Assessment Year 2009-10, W.P. No. 2799/2015, has been filed for the Assessment Year 1-4-2012 to 31-3-2013, W.P. No. 2027/2017, has been filed for the Assessment Year 2014-15 and W.P. No. 2007/2018, has been filed for the Assessment Year 2013-14.

3. In W.P. No. 7228 of 2009, the petitioner is challenging, the order dated 25-6-2009, passed by the Revisional Authority, on the ground that the petitioner - company is 100% export unit and involved in the business of sale of Jumbo and purchase of large quantity of Poly Propylene granules in the course of import into the territory of India, which is used in manufacture of HDPE Sacks. According to the petitioner, these raw material were purchased in the course of import from out of India and the same being meant for manufacture of goods to be exported out of India. The petitioner claimed that firstly, the entry tax is not leviable on the import purchase of the raw material since no State Tax can be levied on any goods which is purchased in the course of import of the goods into the territory of India in view of the restriction placed by Article 286 of the Constitution of India. Secondly, no entry tax was leviable on purchase of such product, the same having been sold outside the State of M.P. or in the course of Inter-State trade commerce as provided in clause (ii) of the first proviso to section 3(1) of the M.P. Sthaniya Kshetra Me Mal Par Pravesh Kar Adhiniyam, 1976 (in short 'Entry Tax Act, 1976' or/'Entry Tax Act'). The Revisional Authority by impugned order dated 25-5-2009/25-6-2009, upheld the levy of Entry Tax by holding that the imposition of the Tax by the authority under section 3 of the Entry Tax Act is legal.

4. In W.P. No. 9444 of 2013, the petitioner has prayed for the following relief and his prayer is as follows:-

(a) a writ of certiorari and/or any other appropriate writ, direction or order, for quashing of the impugned order dated 22-3-2013 Annx. P/6 passed by the respondent No. 3 rejecting the claim of exemption from payment of entry tax be issued.

(b) any other appropriate writ, direction or order, which may be deemed just and proper by the Hon'ble Court, be also passed, restraining the Respondents or any authority, subordinate to them from initiating any proceedings against the petitioner for the recovery of any entry tax amount in respect of Assessment year 2010-11.

(c) Costs of this petition be also awarded to the petitioner.

5. In W.P. No. 2799 of 2015, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) a writ of certiorari and/or any other appropriate writ, direction or order, requiring the Respondents and in particular Respondent No. 1 to certify to this Hon'ble Court all the records of this case in which the impugned order dated NIL (Annx. P/1) have been passed and after examining the legality and/or propriety thereof, quash the same.

(b) a writ of Mandamus and/or any other appropriate writ, direction or order, for forbearing the respondents from levying Entry Tax on the value of imported raw material brought into the State of M.P. from countries outside India and for declaring that the petitioner is not liable to Entry Tax on such raw material.

(c) any other appropriate writ, direction or order and grant such other appropriate relief which this Hon'ble court may deem fit in the facts and circumstances of this case.

(d) to award the cost of this petition in favour of the petitioner.

6. In W.P. No. 2027 of 2017, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) a writ of certiorari and/or any other appropriate writ, direction or order, requiring the Respondents and in particular Respondent No. 1 to certify to this Hon'ble Court all the records of this case in which the impugned order dated 16-7-2017 (Annx. P/l) have been passed and after examining the legality and/or propriety thereof, quash the same.

(b) a writ of Mandamus and/or any other appropriate writ, direction or order, for forbearing the respondents from levying Entry Tax on the value of imported raw material brought into the State of M.P. from countries outside India and for declaring that the petitioner is not liable to Entry Tax on such raw material.

(c) any other appropriate writ, direction or order and grant such other appropriate relief which this Hon'ble court may deem fit in the facts and circumstances of this case.

(d) to award the cost of this petition in favour of the petitioner.

7. In W.P. No. 2007 of 2018, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) a writ of certiorari and/or any other appropriate writ, direction or order, requiring the Respondents to certify to this Hon 'He Court all the records of this case in which the impugned order dated 28-7-2017 (Annx. P/1) have been passed and after examining the legality and/or propriety thereof, quash the same.

(b) a writ of Mandamus and/or any other appropriate writ, direction or order, for forbearing the respondents from levying Entry Tax on the value of imported raw material brought into the State of M.P. from countries outside India and for declaring that the petitioner is not liable to Entry Tax on such raw material.

(c) any other appropriate writ, direction or order and grant such other appropriate relief which this Hon'ble court may deem fit in the facts and circumstances of this case.

(d) to award the cost of this petition in favour of the petitioner.

8. In W.P. No. 7228 of 2009, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) A writ of certiorari, or any other appropriate writ, direction or order for quashing of the impugned order dated 25-6-2009 (Annx P/7) passed by the respondent No. 2 and assessment order dated 30-1-2008 (Annx P/6) passed by the Assistant Commissioner, respondent No. 3, rejecting the claim of exemption from payment of entry tax be issued.

(b) Any other appropriate writ, direction or order, which may be deemed just and proper by the Hon'ble Court, be also passed, restraining the Respondents or any authority, subordinate to them from initiating any proceedings against the petitioner for the recovery of any entry tax amount in respect of Assessment year 2005-06.

(c) Costs of this petition be also awarded to the petitioner.

9. In W.P. No. 3009 of 2005, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) a writ of certiorari and/or any other appropriate writ, direction or order requiring the Respondents and in particular Respondent No. 2 to certify to this Hon'ble Court all the records of this case in which the impugned order dated 22-3-2005 (Annex. P/6) has been passed and after examining the legality and/or propriety thereof, quash the same.

(b) a writ of mandamus and/or any other appropriate writ, direction or order, for forbearing the respondents from levying Entry Tax on the value of imported raw material brought into the State of M.P. from countries outside India and for declaring that the petitioner is not liable to Entry Tax on such raw material.

(c) a writ of mandamus and/or any other appropriate writ, direction or order directing the respondents and in particular Respondent No. 1 to refund the Entry Tax illegally collected from the petitioner on the basis of the impugned orders.

(d) a writ of Prohibition and/or any other writ, direction for prohibiting and/or restraining the Respondents and in particular Respondent No. 1 from levying Entry Tax on the value of imported raw material and recovering the same from the petitioner' in the subsequent years.

(e) any other appropriate writ, direction or order and grant such other appropriate relief which this Hon'ble Court may deem fit in the facts and circumstances of this case.

(f) To award the cost of this petition in favour of the petitioner."

10. In W.P. No. 10557 of 2013, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) This Hon'ble Court be pleased to issue a writ of certiorari or any the appropriate writ, direction or order for quashing the impugned order date 20-6-2013 (Annx. P/5) passed by the respondent No. 2 and Assessment Order date 30-6-2011 (Annx P/4) passed by the respondent No. 3 rejecting the claim of exemption from payment of entry tax and said claim be allowed.

(b) This Hon'ble Court be pleased to restrain the respondents or any authority subordinate to them from initiating any proceedings against the petitioner for the recovery of entry tax for the Assessment year 2008-09.

(c) The cost of this petition also be awarded to the petitioner.

(d) Any other appropriate relief which this Hon'ble Court may deem fit also be granted to the petitioner."

11. In W.P. No. 10557 of 2013, the petitioner has prayed for the following relief and his prayer is as follows:-

"(a) This Hon'ble Court be pleased to issue a writ of certiorari or any the appropriate writ, direction or order for quashing the impugned order date 29-11-2013 (Annx. P/6) passed by the respondent No. 2 and Assessment Order date 27-6-2012 (Annx P/4) passed by the respondent No. 3 rejecting the claim of exemption from payment of entry tax and said claims be allowed and entry tax and interest imposed on the petitioner in respect of imported raw material be set aside.

(b) This Hon'ble Court be pleased to restrain the respondents or any authority subordinate to them from initiating any proceedings against the petitioner for the recovery of entry tax for the Assessment year 2009-10.

(c) The cost of this petition also be awarded to the petitioner.

(d) Any other appropriate relief which this Hon'ble Court may deem fit also be granted to the petitioner.

12. In all these batch of petitions, the levy of Entry Tax Act has been challenged on the same ground as challenged in W.P. No. 7228 of 2009.

13. In all the writ petitions the petitioner has challenged the Assessment order dated 22-3-2013 in writ petition under Article 226 of the Constitution of India, on the basis of judgment passed by the Kerala High Court in the case of Frank William Fernandez vs. State of Kerala, reported as : (1999) 115-STC-591.

14. By these bunch of writ petitions, the petitioner(s) is/are challenging the order of assessment passed by the Assessing Officer, Appellate Authority and Revisional Authority. For the levy of Entry Tax, under the provisions of M.P. Entry Tax, passed by the Assessing Authority/Appellate Authority, pertaining to different assessment year(s) as well as the order of revisionary authority passed in favour of revenue and upholding the assessment order. In sum and substance, the contentions of the petitioner(s) are that some goods have been purchased and imported by the company from outside the country and when it got entered into the local area of M.P. then the Department has assessed and imposed entry tax over the purchased goods whereas according to petitioner(s), the said imposition was bad in law because once the custom/excise duty has already been paid by the company, when the goods were imported into the country and, therefore, no logic exist in imposition of Entry Tax. The imposition of entry tax cannot be made by the State as the import is exclusive domain of Union of India and for that the petitioner(s) has taken the aid of Article 304 of the Constitution of India. At the time of filing these batch of writ petitions, a reliance was placed in the case of Frank William Fernandez vs. State of Kerala (supra).

15. The facts of the case are that petitioner - Bulk Pack Export Ltd., is a registered dealer under M. P. VAT Act, 2002 and under the Central Sales Tax Act, 1956, holding TIN No. 23190904192 and is a deemed registered dealer under the M.P. Entry Tax Act, 1976. The petitioner - Company is engaged in the business of manufacture and sale of jumbo bags. P.P. bags and P.P. jumbo bags (packing materials) which are manufactured at its factory situated in industrial area at Pithampur Dist. Dhar. The petitioner is purchasing raw material from out of India as well as within India and within State. The petitioner(s) has challenged the levy of Entry Tax on raw material purchased from out of India and entered into the local area of Pithampur on the ground that no tax can be levied on the purchases of goods in the course of import of goods in to India.

16. The Entry Tax is levied under the M.P. Entry Tax Act, 1976 on the entry of goods into the local area of Madhya Pradesh. The levy of Entry Tax is under Entry No. 52 of 7th Schedule of Constitution of India. The relevant provisions of incidence of levy Entry Tax is being extracted as under:-

"3. Incidence of taxation:

(1) There shall be levied an entry tax-

(a) On the entry in the course of business of a dealer of goods specified in Schedule II, into each local area for consumption, use or sale therein; and

(b) on the entry in the course of business of a dealer of goods specified in Schedule - III into each local area for consumption or use of such goods but not for sale therein; and such tax shall be paid by every dealer liable to tax under the [Vat Act] who has effected entry of such goods :"

17. The local area is defined under Clause (d) of section 2 of the M.P. Entry Tax Act, 1976, which is extracted as under:-

"(d) "local area" means the area comprised within the limits of a local authority,"
18. Local authority is defined in clause (e) of section 2 of M.P. Entry Tax Act, 1976, which is extracted as under:-

"(e) "local authority" means an authority constituted under a law relating to local authority but shall not include a Janapada Panchayat, a Zila Panchayat, a Mandal Panchayat or such other local authority as the State Government may, by notification, specify"
19. Raw material is defined under clause (g) of section 2 of M.P. Entry Tax Act, 1976, which is extracted as under:

"(g) "raw material" means an article used as an ingredient in any manufactured goods, or an article consumed in the process of manufacture and includes fuel and lubricants required for the process of manufacture,"
20. Registered dealer is defined under clause (gg) of section 2 of M.P. Entry Tax Act, 1976, which is extracted as under:-

"(gg) "registered dealer" means dealer registered under the [Vat Act']"
21. Value of goods is defined under clause (1) of section 2 of the M.P. Entry Tax Act, 1976 which is extracted as under:

"(1) "Value of goods" in relation to a dealer or any person who has effected entry of goods into a local area shall mean the purchase price of such goods as defined in [clause(s) of section 2 of the VAT Act] [and shall include excise duty and/or additional excise duty and/or customs duty, if levied under the Central Excise and Salt Act, 1944 (No. 1 of 1944), the Additional Duties of Excise (Goods of Special Importance) Act, 1956 (No. 58 of 1957) or the Customs Act, 1962 (No. 52 of 1962), as the case may be] or the market value of such goods if they have been acquired or obtained otherwise than by way of purchase,"
22. Entry of goods in to local area is defined under clause 2(aa) of section 2 of M.P. Entry Tax Act, 1976, which is extracted as under:-

"(aa) entry of goods into a local area with all its grammatical variations and cognate expressions means entry of goods into that local area from any place outside thereof including a place outside the State for consumption, use or sale therein;"
23. M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 w.e.f. 1-9-1976 came into force. The statement of objects and reasons reveals that the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (No. 6 of 1976) was promulgated with a view to raising financial resources to compensate the local bodies upon the abolition of octroi. The multipoint Entry Tax was converted to single point levy of Entry Tax along with other changes.

24. Article 286 after 46th amendment of Constitution of India is reproduced as under:-

"286. Restriction as to imposition of tax on the sale or purchase of goods:

(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place

(a) outside the State; or

(b) in the course of the import of the goods into, or export of the goods out of, the territory of India

(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause

(3) Any law of a State shall, in so far as it imposes, or authorises the imposition of,

(a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce; or

(b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub clause (b), sub clause (c) or sub-clause (d) of clause 29-A of Article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."

25. The contents of Article 286 reveals that this Article imposes restriction of the tax levied on sale or purchase of goods as mentioned in this Article of Constitution of India. The Entry Tax is levied on the entry of goods into a local area of the State and the State Government is entitled to levy the tax on entry of goods into a local area for use, consumption or sale therein under Entry No. 52 of List II of Seventh Schedule to the Constitution of India. Therefore, there is no contravention of Article 286 of the Constitution of India when the tax is levied on the entry of goods into a local area of Madhya Pradesh. Entry Tax is levied in lieu of octroi which was being levied by each local bodies, even prior abolition of octroi.

26. The definition of value of goods contained in clause 2(1) of M.P. Entry Tax Act, 1976 clearly mention that value of goods in relation to a dealer or any person who has effected entry of goods in to a local area shall mean the purchase price of such goods and shall include excise duty and or additional excise duty and/or customs duty if levied under Central Excise and Salt Act, 1994 (No. 1 of 1994), The Additional Excise Duties of Excise (Goods of Special Importance) Act, 1957 (No. 58 of 1957) or the Customs Duty Act, 1962 (No. 52 of 1962) as the case may be or the market value of such goods if they have been acquired or obtained otherwise than by way of purchase. This shows that the legislature was fully aware of Article 286 of the Constitution of India and since Entry Tax is levied on the entry of goods into local area, has defined the notional value of goods for the purpose of calculation of Entry Tax at rate applicable to the goods. The inclusion of excise duty and custom duty clarifies that the Entry Tax is to be levied on the material purchased from out of India and entered into a local area of Madhya Pradesh for use, consumption or sale therein It is not a condition to levy Entry Tax that the goods should have been purchased by the person causing entry of goods into the local area. The crucial point for the levy of Entry Tax is the entry of goods into a local area of Madhya Pradesh and the imported goods have also been entered into the local area of Madhya Pradesh.

27. As regards the "entry of goods into local area" means entry of goods into local area from any place outside thereof is wide enough to cover foreign territory for the purpose of levy of Entry Tax, any area which is outside the "local area" including foreign territory is covered, for the purpose of levy of Entry Tax under the M.P. Entry Tax Act, 1976.

28. The incidence of taxation restrict the levy of Entry Tax only to the extent of which entry is effected during the course of business of a dealer. The petitioner has effected entry of imported goods into the local area of Pithampur is liable to pay Entry Tax under section 3(1) of the M.P. Entry Tax Act, 1976. The entry of goods into each local area is taxable subject to the provisions incorporated under this section.

29. The Entry Tax is payable on the entry of goods into the local area of Madhya Pradesh, when such goods are entered into the local area, for use or consumption of such goods in that local area. The tax levied is under Entry No. 52 of List II of Schedule VII of the Constitution of India and such tax not being on sale or purchase of goods, therefore, the provisions of Article 286 (1) of the Constitution of India are not application. The levy of Entry Tax is in lieu of octroi tax which has been abolished by the State of Madhya Pradesh w.e.f. 1-5-1976 by Ordinance of 1976 and which has been replaced by M.P. Entry Tax Act, 1976 w.e.f. 1-9-1976.

30. Section 3(1)(a) and (b) are reproduction of provisions of section 3 relating to incidence of taxation. The plain reading of this section reveals that the Entry Tax is payable on the entry of goods into a local area of Madhya Pradesh when entered for use or consumption of goods into the local area. The petitioner during the course of its business has entered the goods into the local area of Pithampur for use or consumption of such goods in the manufacture of goods for sale and, therefore, he is liable to pay tax on such imported goods.

31. The present levy is not on sale of purchase of goods under Entry 54 of the list II of Schedule VII of the Constitution of India. The present levy is on entry of goods of local area of M.P. and levy is of compensatory in nature. There is no provision under the M.P. Entry Tax Act, 1976 that the Entry Tax will not be levied on raw material used in manufacture of goods for sale in the course of export out of India. The levy is on the entry of goods into local area for consumption or use or sale in that local area in which such goods are entered. Section 2(1) of the Entry Tax Act, which defines value of goods and value of goods includes excise duty, Additional Excise Duty, Central Excise Duty and Customs Duty. The definition of value of goods indicates that "place outside the State" includes place out of India, which also a place outside the State.

32. The Apex Court, recently in the case of State of Kerala vs. Fr. William Fernandez, : (2017) 16 STD 633, wherein the Constitutional validity of Legislative competence of the State Legislature to impose entry tax on the goods imported from outside the country entering into local area of the State has been challenged. Further, the Apex Court in the same case held that Entry 52 also provided a legislative field, namely, 'taxes on the entries of goods into a local area for consumption, use or sale therein'. Legislation is thus concerned only with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to chargeability Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is same for all goods entering into local area. Entry tax provisions which expressly includes entering into local area from any place outside the territory of India, the said inclusion of words 'from outside the India' is a provision made by way of abundant caution. The taxing event for entry tax under Entry 52 List II is entirely different and has nothing to do with the customs duty. Taxing event with regard to levy of customs duty by Parliament and levy of entry tax by States under Entry 52 List II are entirely different and separate. Taxing event with regard to levy of customs duty by Parliament and levy of entry tax by States under Entry 52 List II are entirely different and separate. The taxing event pertaining to levy of entry tax occurs only after the taxing event of levy of customs duty is over. Thus, the State Legislation imposing entry tax in no manner encroaches upon the Parliamentary Legislation under Entry 41 and Entry 83. There is no invalidity in levy of entry tax by the States. The import of goods from any territory outside India comes to an end when the goods enter into the custom frontiers of India and are released for home consumption. Non-inclusion of custom duty in the definition of purchase value in the statute of entry tax is not an indicator of the fact that legislature never intended to levy entry tax on imported goods. Entry tax legislation are fully covered by Entry 52 List II and the submission that essence of Entry 52 is octroi which can be levied only by local authorities and State has no legislative competence to impose entry tax under Entry 52 List II is fallacious. Para 63, 64, 102, 105, 106, 144 and 145 of State of Kerala vs. Fr. William Fernandez are relevant, which reads as under:-

63. There cannot be any dispute to the proposition as laid down by this Court in the above noted cases. Statutes which are in consideration are the statutes where clear charging provision has been enacted and charging of entry tax is on entry of the scheduled goods into a local area for consumption, use or sale. Thus, the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is same for all goods entering into local area. We, thus, are of the clear view that charging section is clear, unambiguous and the provisions cannot be read to mean that the imported goods coming from outside the country are excluded from charge of entry tax. No such indication is discernible from any provision of the Act. Charging event is complete as and when goods enter into local area for use, sale or consumption irrespective of its origin. We, thus, are of the view that definition clause, section 2(d) read with section 3 does not exclude the charging of the entry tax on goods entering into local area for consumption, use or sale from outside the country.

64. Insofar as reference of section 2(c) of the Bihar Act, 1993 as amended in 2003 by adding an explanation and as amended in 2006 by inserting a new section 2(c), section 2(1) (c) of Uttar Pradesh Tax on Entry of Goods into Local Area Act, 2007, section 2(1)(c) of the Uttarakhand Tax on Entry of Goods into Local Areas Act, 2009 as well as section 2(1)(c) of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012 which expressly includes entering into local area from any place outside the territory of India, we only say that the said inclusion of words 'from outside the India' is a provision made by way of abundant caution.

102. The law relating to customs has been consolidated by the Customs Act, 1962. The definitions of "import", "imported goods" and "importer" have already been noticed above. The definition of imported goods as given in section 2(25) is any goods brought into India from the place outside India but does not include goods, which have been cleared for home consumption. The provision clearly contemplates that once the goods are released for home consumption, the character of imported goods is lost and thereafter no longer the goods could be called as imported goods. The import transit is only till the goods are released for home consumption. The taxing event for entry tax under Entry 52 List II is entirely different and has nothing to do with the customs duty. The State by imposing entry tax in any manner is not entrenching in the power of the Parliament to impose customs duty. The goods are released for home consumption only after payment of the customs duty due to the Central Government. The goods which are imported cannot be held to be insulated so as to not subject to any State tax, any such insulation of the imported goods shall be a protectionist measure which will be discriminatory and invalid. When all normal goods are subjected to State tax no exemption can be claimed by goods, which have been imported from payment of entry tax. To take a common example, all goods, which pass through a toll bridge are liable to pay toll tax, can it be said that the imported goods which after having been released from customs barriers and are passing through a toll bridge, are not liable to pay the toll tax, the answer has to be in No. Thus, the event for levy of customs duty, which is in the domain of the Parliament, is entirely different from that of event of entry tax. The liability to pay State entry tax arises only when goods enter into a local area for consumption, use and sale, which event is entirely different and separate from the levy of a customs duty, which is on import.

105. In view of the foregoing discussions, we are of the clear opinion that taxing event with regard to levy of customs duty by Parliament and levy of entry tax by States under Entry 52 List II are entirely different and separate. The taxing event pertaining to levy of entry tax occurs only after the taxing event of levy of customs duty is over. Thus, the State Legislation imposing entry tax in no manner encroaches upon the Parliamentary Legislation under Entry 41 and Entry 83. There is no invalidity in levy of entry tax by the States.

106. The Original Package/Unbroken Package is a theory which was evolved by U.S. Supreme Court in reference to the imported goods. The genesis of the theory is from the Chief Justice Marshall, in the case of Brown vs. The State of Maryland, 6 L.Ed. 678. State of Maryland has enacted a law that all importers of foreign articles or commodities shall, before they are authorized to sell, take out a license for which they shall pay fifty dollars. The above provision of the State of Maryland was challenged by Brown on the ground that the provision is repugnant to following two provisions in the Constitution of the United States:

"1. To that which declares that 'no State shall, without the consent of Congress, lay any imposts, or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws.'

2. To that which declares that Congress shall have power 'to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.'"

144. In view of foregoing discussion, we arrive at the following

CONCLUSIONS:

(i) Orissa Entry Tax Act, 1999, Kerala Tax Act, 1994 and Bihar Tax on Entry of Goods in Local Area for Consumption, Use or Sale, 1993 (before its amendment by Bihar Act, 2003 and 2006) do not exclude levy of entry tax on the goods imported from any place outside territories of India into a local area for consumption, use or sale.

(ii) All the Entry Tax Legislations questioned in these appeals are legislations which are within the legislative competence of the State legislatures and do not intrude the legislative domain of Parliament as reserved in Entry 41 and Entry 83 of List I.

(iii) The import of goods from any territory outside India comes to an end when the goods enter into the custom frontiers of India and are released for home consumption.

(iv) After import of goods comes to an end the State legislature has full legislative competence to levy entry tax under Entry 52 List II.

(v) The Original Package Theory as developed by the American Supreme Court in case of Brown vs. State of Maryland (supra) is not applicable in this country and the imported goods are not exempted from entry tax till it reaches to the factory premises/destination of its consumption, use or sale.

(vi) Non inclusion of custom duty in the definition of purchase value in the statute of entry tax is not an indicator of the fact that legislature never intended to levy entry tax on imported goods.

(vii) Entry tax legislation are fully covered by Entry 52 List II and the submission that essence of Entry 52 is octroi which can be levied only by local authorities and State has no legislative competence to impose entry tax under Entry 52 List II is fallacious.

(viii) A plant imported in knocked out condition is fully covered with the definition of machinery and equipment under Part II of Schedule of the Orissa Act, 1999.

145. In view of our foregoing discussion and conclusion, we decide all the appeals in this batch of appeals in following manner:

(i) All the appeals filed against the judgments of Orissa High Court are dismissed. The Transfer case is also dismissed.

(ii) All the appeals filed against the judgment of Patna High Court are dismissed.

(iii) The civil appeal filed against the judgment of Jharkhand High Court stands allowed.

(iv) The appeals filed by the State of Kerala are allowed. The judgment of the Division Bench holding that no entry tax was leviable on the vehicle imported from territories outside the country is set aside, restoring the judgment of the learned Single Judge. (v) Writ Petition 574 of 2003, Parisons Agrotech Pvt. Ltd. vs. State of Kerala and ors. is dismissed.

(vi) In Civil Appeals filed against judgment of Orissa High Court, appellants who were writ petitioners before the High Court are given liberty to file an application within 30 days from today to revive their writ petitions and urge ground of discrimination under Article 304(a) as per law laid down by Nine Judges Bench in Jindal Stainless Ltd. (supra).

33. Learned Senior counsel for the petitioner has raised three more grounds and submitted that the goods was imported by the petitioner - Company for the purpose of re-export and, therefore, he placed reliance on the decision of the Apex Court in the case of Entry Tax Officer, Bangalore vs. Chandanmal Champalal and Co.,: 1994 Vol. 95 STC Pg 95 and M/s. Acqueous Victuals Pvt. Ltd. vs. State of U.P. and ors. (decided on 8th May, 1998)/reported as : AIR 1998 SC 2278 the Apex Court has held thus:-

"that if beverages in liquid form contained in bottles are brought within the municipal limits and after such beverages are taken out of these bottles, those very empty bottles are found to have been re-exported from the municipal limits without being sold therein, the octroi duty paid on the weight of such bottles earlier could be subjected to claim for refund by the exporter of such empty bottles if the relevant factual data is found to the satisfaction of the authorities before whom such claim id lodged. The first point is, therefore, answered by holding that if the writ petitioner proves to the satisfaction of authorities that very bottles in which beverages were imported in given contingency for sale and consumption within the municipal limits were actually taken out of municipal limits as empty bottles for re-cycling without meanwhile, the octroi duty paid at the time of their entry on the weight of bottles could be subjected to claim for refund subject to the rider that it is also shown by the writ petitioner that the octroi duty on such empty bottles had not been passed on to the consumers or any other person so that the writ petitioner will not be found to be guilty of unjust enrichment by getting such refund. This question was also to be examined by the authorities before whom claim of refund is lodged. As held by the Constitution Bench of this Court in Mafatlal Industries Ltd. and ors. vs. Union of India and ors. [: (1997) 5 SCC 536], the question of unjust enrichment pertaining to such refund claims has to be examined by the authorities concerned. Before parting with discussion on Point No. 1, we may also mention that one decision of this court in Nagar Mahapalika, Meerut vs. Prem Nath Monga Bottlers Pvt. Ltd. and anr. [: (1996) 8 SCC 1] was pressed in service by learned counsel for the writ petitioner. In our view that decision is of no avail to the writ petitioner on the facts of the present case. This Court in the said decision was concerned with the question whe

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ther the exemption of octroi granted to mineral water bottles would include aerated water bottles also. It was held that the mineral water bottles would include latter type of bottles also. Such is not the controversy before us. Point No. 1 is answered accordingly." 34. He has further drawn our attention to Clause A of sub-section (1) of section 3 of Clause (a) and (b) and submitted that though the petitioner is a dealer of goods specified in Schedule II, but Clause (b) of section (1) of section 3 will be applicable and as per aforesaid, no Entry Tax is leviable to the petitioner. To support the aforesaid, he has placed reliance on the decision of the Apex Court in the case of State of Tamil Nadu vs. M.K. Kandaswami Etc. Etc., reported as : (1975) 36 STC 191, the Commissioner of Central Excise Pondicherry vs. Acer India Ltd., reported as (2004) 3 SCRC 421, The Commissioner of Income Tax, Bombay vs. The Elphinstone Spinning and Weaving Mills Ltd., reported as : AIR 1960 SC 1016. He lastly placed reliance on section 18 (4) (a) of the VAT Act and submitted that levy of interest is not sustainable because petitioner has paid full tax along with the return. To support the aforesaid, he has drawn our attention to the decision in the case of Indian Oil Corporation Limited vs. State of Madhya Pradesh and others, reported as : 2017 MPLJ Online 47 : (2018) 32 GSTJ 185 (MP) and submitted that the Assessing Officer denied ITR to the extent of credit notes issued in favour of petitioner by GAIL due to price revision as per the direction of Petroleum Planning and Analysis Cell of Govt. of India, and also levied interest under section 18(4) of the VAT Act. The court found that the law does not envisage the assessee to predict final assessment and expect from the assessee to pay tax on that basis to avoid liability to pay interest. As the petitioner had paid tax as per the return filed in time and it is not a case which falls under four clauses of section 18(4)(a), therefore, the levy of interest is not sustainable. 35. In these cases, the petitioner is challenging the assessment order on the ground that entry tax is not leviable on the goods imported from outside the countries. No entry tax was deposited by the petitioner on the goods imported from country outside India. The Assessing Officer assessed the entry tax at the rate of one percent on the goods purchased from outside India and as the same was not paid as per the provisions of Entry Tax Act, therefore, the Assessing Authority has levied interest under section 18(4) (a) of M.P. VAT Act, 2002. The contention of the petitioner that he has deposited entry tax, which was worked out. The Assessing Authority levied interest under section 18(4)(a) on the amount, which was not deposited in time. In the case of Indian Oil Corporation (supra), the petitioner therein has paid the tax as per return filed in time and it is not a case, which falls under Clause 4 of section 18(4) (a) of M.P. VAT Act, 2002. Looking to the facts and circumstances of the present case, the judgment cited by the learned Senior counsel for the petitioner is distinguishable on the facts. 36. In view of the law laid down by the Apex Court in the case of State of Kerala vs. Fr. William Fernandez (supra) and a nine - Judge constitution Bench in Jindal Stainless vs. State of Haryana, : (2016) 15 STD 493 (SC), had answered several questions pertaining to entry tax legislations of different States, which has largely settled various issues relating to entry tax, the petitioner is liable to pay entry tax as per section 3 of the Entry Tax Act. The issue is no more res integra. The other two grounds raised by the petitioner has no merit, the contention of assessee in raising the issue in the writ petitions and earlier was not entirely bona fide. 37. For the above mentioned reasons, the Writ Petition Nos. 3009/2005, 9444/2013, 10557/2013, 2811/2014, 2799/2015, 2027/2014, 2007/2018 and 7228/2009 filed by the petitioners have no merit and are, accordingly, dismissed with cost of ` 10,000/- in each writ petitions.
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