Case Law Details
Shri Baalaaji Steel Rolling Mill Vs Assistant Commissioner (CT) (Madras High Court)
In Shri Baalaaji Steel Rolling Mill Vs Assistant Commissioner (CT), the Madras High Court reviewed the case in continuation with a previous order from 28.10.2024. The case involved the levy of entry tax on goods imported to Tamil Nadu, which was challenged in light of a Madras High Court judgment dated 22.03.2007. The judgment had previously declared the entry tax levy as unconstitutional, violating Article 301 of the Constitution, as it was not compensatory in nature. Despite the Tamil Nadu government’s filing of a Special Leave Petition in the Supreme Court, the court upheld that the levy was invalid for the petitioners involved. Following this, the Court directed the authorities to implement Section 4 of the Entry Tax Act in full, quashing the orders dated 16.11.2009. The writ petitions were allowed, with no costs, and connected miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Read this order in continuation of and in conjunction with order dated 28.10.2024, where the issue arising in these writ petitions has been crystalised in the first paragraph.
2. Learned Government Advocate circulates Circular bearing No.MM2/8697/2007 dated 03.10.2007 reads as follows:
‘MM2/8697/2007
Office of the
Commissioner of Commercial Taxes, Chepauk, Chennai-5
Dated:3.10.2007
Circular
Sub: Tamil Nadu Tax on Entry of Goods into Local Areas Act 2001 – Levy held not valid – Judgment of the High Court of Madras dated 22.3.2007 – Instructions – Certain – issued.
Ref: Judgment of the High Court of Madras in WA 1320, 1321/06 and Writ Petition 12553/02 filed by Tvl. ITC Limited, dated 22.3.2007.
The High Court of Madras in the decision cited held that the levy of entry tax on the goods imported from other
States to the State of Tamil Nadu and from other countries is not compensatory in nature and the Act is violative of Article 301 of the Constitution. The High Court set aside the levy and quashed the demand notices. Operative portion of the above decision has already been communicated to all Deputy Commissioners for necessary action and the same has been reported in (2007) 7 VST 367 (Mad).
The above decision of the Division bench of the Madras High Court has not been accepted by the Government and Special Leave Petition has been filed in the Supreme Court.
Meanwhile the Supreme Court of India in another case in Civil Appeal No.3453/2002 dt. 17.4.07 in its interim order pointed out that the High Court’s orders, wherever it has been passed in favour of the tax payers, shall operate so far as the concerned Writ Petitioners are concerned.
On 05.09.2007 our Special Leave Petitions Nos.15082 to 15085/2007 with stay prayer came up for hearing before the Supreme Court. Pending Supreme Court orders on the stay prayer, and in view of the further individual Writ Petitions filed by the dealers being disposed of by the Madras High Court following the decision rendered in the reference cited, the following instructions are issued in respect of Entry Tax on Goods.
6. Set off of entry tax paid may be allowed in full against tax, surcharge and additional tax under TNGST/TNVAT Acts.
The Joint Commissioners/Deputy Commissioners are requested to issue suitable instructions to all the officers under their control.
The receipt of the circular may be acknowledged early.
Sd/- T. Jacob.
Commissioner of Commercial Taxes.’
3. In view of the same, the impugned orders dated 16.11.2009 are quashed and the respondents are directed to give effect to the provisions of Section 4 of the Entry Tax Act in full.
4. Both writ petitions are allowed. No costs. Connected miscellaneous petitions are closed.
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