IMFL- Tax on Entry of Goods under Local Area Act, 2007 – HC grants stay

United Spirit Limited Vs State of U.P. (Allahabad High Court)

The Revenue contended that the petitioner has an alternate remedy of appeal to the Commercial Tax Tribunal. The petitioner already has gone to the appellate authority once, hence, petition should not be entertained

The petitioner is a manufacturer of Indian made foreign liquor. It was assessed to entry tax under the Uttar Pradesh Tax on Entry of Goods into Local Area Act, 2007. The Assessment order was challenged before the appellate commissioner. Against rejection of appeal, the petitioner filed a writ petition.

The petitioner contended that under the schedule to the Entry Tax Act of 2000, IMFL was a notified commodity. However, the said act was held to be ultra vires by the Hon’ble High Court of Allahabad. The state, via ordinance, introduced the 2007 Act retrospectively. However, the schedule of the 2007 Act did not contain IMFL. Hence, the entire proceedings is without jurisdiction.

The Revenue contended that the petitioner has an alternate remedy of appeal to the Commercial Tax Tribunal. The petitioner already has gone to the appellate authority once, hence, petition should not be entertained.

The Hon’ble High Court of Allahabad, holds that there is substance in contention of the petitioner. Rejects preliminary objection of the Revenue. Grants stay against recovery of dues.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

Heard Sri Bharat Raichandani along with Harshul Bhatnagar, learned counsel for the petitioner and Vineet Pandey, learned C.S.C along with Rishi Kumar, A.C.S.C. and perused the records.

Shri Vineet Pandey raised a preliminary objection about maintainability of the present writ petition and submits that against the order, there is an alternative remedy of second appeal before the Commercial Tax Tribunal, Bareilly, where the jurisdiction lies to the petitioner.

Reverting to the said submission, learned counsel for the petitioner submits that present petition has been filed raising the issue of jurisdiction as under Entry Tax Act, 2000 in the schedule Indian made foreign liquor, where it is mentioned. Thereafter, the act was reintroduced by Act No. 30 of 2007 Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007. In the schedule of items, Indian made foreign liquor, was not mentioned. Therefore, proceedings initiated against petitioner is without jurisdiction.

In view of the above, on perusal of records, counsel for the petitioner have substance.

The matter requires consideration.

Respondents may file counter affidavit within four weeks. Two weeks thereafter for rejoinder affidavit.

List again on 20th of July, 2023.

Till the next date of listing, no coercive action shall be taken against the petitioner provided petitioner furnishes surety other than cash or bank guarantee to the satisfaction of Assessing Authority.