Case Law Details
Case Name : Jindal Stainless Ltd. & Anr. Vs. State of Haryana & Ors. (Supreme Court)
Appeal Number : Civil Appeal No. 3453/2002
Date of Judgement/Order : 11/11/2016
Related Assessment Year :
Courts :
Supreme Court of India
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CA Bimal Jain
The Hon’ble Supreme Court on November 11, 2016, has upheld that constitutional validity of Entry tax imposed by States. A nine-judge Constitution Bench, overruling ‘compensatory tax’ theory propounded by 7 judges bench in the case of Atiabari Tea Co. Ltd. Vs. State of Assam & Ors. [AIR 1961 SC 232], declared that it does not restrict freedom of trade or other constitutional provisions on Inter-State trade.
We are sharing with you a landmark judgement of the Hon’ble Supreme Court of India in the case of Jindal Stainless Ltd. & Anr. Vs. State of Haryana & Ors. [TS-455-SC-2016-VAT], on the following issues:
Issues:
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Author Bio
In view of pending decsion on certain issues of levy of ET, whether Assesees can differ the payment of Tax.
If so, then states can co erce for payment by ED and isduing notice.
Assessee can again go to High Courts for relief in view of pending issues.
Reg praveen chavda Raipur
The judgement upheld the right of the States to levy entry tax act and set aside the compensatory theory. But, left the major issue of determining whether the entry tax levy of a State discriminates between goods imported from other States and within the State to be decided by regular bench. Further other two issues i.e., validity of levy on the goods imported from outside the Country and defining entire State as local area is left open to be decided by referral bench. Therefore, the judgement is not yet final on the validity of entry tax levy of the States. But, State Revenue departments, without applying their mind to the judgement, were under the mistaken impression that decision is in their favour and they can recover tax, which is totally illegal.
While theory of Tax being compensatory in nature is rejected by SC now , Obiter dicta that tax burden on goods imported from other States and goods produced within the State fall equally leaves with other issues of what defines equality i.e. equality on final price to consumer or equality on Taxes including Entry Tax.