United Spirits Limited Vs State Of UP And 2 Others (Allahabad High Court)
State government issued circular dated 18.10.2006 stating that no entry tax could be realized from the manufacturer for the impugned period
The petitioner is a manufacturer of Indian Manufactured Foreign Liquor (IMFL). It sells IMFL to dealers for further sale in the State of Uttar Pradesh. It was assessed to entry tax under the UP Entry Tax Act, 2000. An appeal against the assessment orders did not meet with success. It was contended that said 2000 Act was held to be ultra vires by the Hon’ble Allahabad High Court. An ordinance was passed the State Legislature bringing into the UP Entry Tax Act, 2007 retrospectively from 1999. However, the schedule in the 2007 Act did not mention IMFL and hence, no tax could be levied on such goods; the savings and validation clause does not save the assessment orders which are not as per the new Act. Hence, writ petition came to be filed before the High Court.
The Hon’ble Allahabad High Court set aside the orders and allowed the writ petition. It held: (i) that the state government issued circular dated 18.10.2006 stating that no entry tax could be realized from the manufacturer for the impugned period; (ii) there is a categorical finding of fact that the manufacturer had not collected the tax from the dealers; (iii) hence; the said circular is binding on the authorities; relies on constitution Bench judgment of the Supreme Court in case of Ratan Melting.
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