Calcutta High Court
State Of West Bengal And Ors vs Pepsico India Holdings Private Limited on 30 January, 2025
Author: Debangsu Basak
Bench: Debangsu Basak
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
APO 106 of 2018
IA NO: GA 2 of 2013 (Old No: GA 2741 of 2013)
STATE OF WEST BENGAL AND ORS.
VS.
PEPSICO INDIA HOLDINGS PRIVATE LIMITED
WITH
APO 107 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2744 of 2013)
JOINT COMMISSIONER, COMMERCIAL TAX, GROUP I, BARRACKPUR &
ORS.
VS.
CENTURY EXTRUSIONS LTD & ANR.
WITH
APO 108 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2750 OF 2013)
STATE OF WEST BENGAL & ANR.
VS.
SIEMENS LTD & ANR.
WITH
APO 113 OF 2018
Signed By : IA NO: GA 2 OF 2013 (Old No: GA 2736 of 2013)
SUBHA
KARMAKAR
High Court of
Calcutta
STATE OF WEST BENGAL & ANR.
30 th of January
2025 02:42:22 PM VS.
2
IMPEX FERROTECH LTD & ANR.
WITH
APO 114 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2734 of 2013)
STATE OF WEST BENGAL AND ANR
VS.
IMPEX METAL AND FERRO ALLOYS LTD AND ANR.
WITH
APO 116 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2729 OF 2013)
STATE OF WEST BENGAL AND ORS
VS.
RANBAXY LABORATORIES LTD.
WITH
APO 117 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2727 of 2013)
STATE OF WEST BENGAL & ORS.
VS.
DUTCH TECH TOOLS PVT. LTD.
WITH
APO 122 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2713 OF 2013)
STATE OF WEST BENGAL AND ORS.
VS.
NOKIA INDIA PVT LTD.
WITH
APO 123 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2719 of 2013)
GA 3 OF 2017 (Old No: GA 3163 of 2017)
STATE OF WEST BENGAL AND ORS.
3
VS.
MARICO LIMITTED
WITH
APO 125 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2720 of 2013)
STATE OF WEST BENGAL & ANR.
VS.
GLAXOSMITHKLINE CONSUMER HEALTHCARE LTD.
WITH
APO 126 OF 2018
IA NO: GA 2 OF 2013 (Old No: GA 2723 OF 2013)
STATE OF WEST BENGAL & ORS.
VS.
ROHIT FERROTECH LIMITED & Anr.
WITH
APO 128 OF 2018
IA NO: GA 1 OF 2013 (Old No: GA 2187 OF 2013)
STATE OF WEST BENGAL AND ORS.
VS.
GODREJ CONSUMER PRODUCTS LIMITTED
For the State : Mr. Kishore Dutta, Sr. Adv.
Mr. Anirban Ray, Sr. Adv.
Mr. T.M. Siddiqui, Sr. Adv.
Mr. D. Ghosh, Adv.
Mr. S. Sanyal, Adv.
For the Respondent : Mr. Sujit Ghosh, Sr. Adv.
(Samsung) Ms. Mannat Waraich, Adv.
Mr. A. Behura, Adv
Mr. Pujon Chatterjee, Adv.
Mr. Sutosom Bhattacharyya, Adv.
For the Respondent : Mr. Boudhayan Bhattacharyaa, Adv.
4
No. 2 Ms. Stuti Bansai, Adv.
For Ranbaxy Laboratories: Mr. Suman Basu, Adv.
Pvt. Ltd.
For the Respondent : Mr. Kumarjit Was, Adv.
(item 7, 8, 10, 11, 13) Ms. Mou Saha, Adv.
For Pepsico India : Mr. Avra Mazumdar, Adv.
Holdings Pvt. Ltd. Ms. Alisha Das, Adv.
For Rohit Ferrotech Ltd. Mr. Jaybrata Mishra, Adv.
& Anr. Mr. Suman Bhowmik, Adv.
Mr. Samrat Das, Adv.
Ms. Elina Dey, Adv.
Ms. Megha Datta, Adv.
Hearing Concluded on : December 10, 2024
Judgement on : January 30, 2025
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
MAT 1398 of 2013
STATE OF WEST BENGAL & ORS.
-VS
SOVA ELECTRONICS CASTING LTD. & ANR.
WITH
MAT 1399 of 2013
STATE OF WEST BENGAL & ANR.
-VS
KUNJ BIHARI STEEL PVT. LTD. & ANR.
WITH
MAT 1400 of 2013
STATE OF WEST BENGAL & ORS.
-VS
VIKRAM INDIA LTD. & ANR.
WITH
MAT 1408 of 2013
STATE OF WEST BENGAL & ORS.
-VS
5
M/S. BLUE MOON COMMERCIAL PVT. LTD. & ORS.
WITH
COT 41 of 2017
STATE OF WEST BENGAL & ORS.
VS.
TATA STEEL LIMITED & ORS.
WITH
MAT 1385 of 2013
STATE OF WEST BENGAL AND ORS.
-VS
MITTAL TECHNOPACK PRIVATE LTD & ANR.
WITH
MAT 1386 of 2013
STATE OF WEST BENGAL & ORS.
-VS
TAMRA DHATU UDYOG PVT. LTD. & ANR.
WITH
MAT 1387 of 2013
STATE OF WEST BENGAL AND ANR.
-VS
SHAKAMBARI ISPAT & POWER LTD. & ANR.
WITH
MAT 1388 of 2013
STATE OF WEST BENGAL AND ANR.
-VS
SHAKAMBARI OVERSEAS TRADES PVT. LTD. & ANR.
WITH
MAT 1389 of 2013
STATE OF WEST BENGAL AND ANR.
-VS
GAGAN FERROTECH LTD. & ANR.
WITH
MAT 1390 of 2013
STATE OF WEST BENGAL AND ANR.
-VS
6
HINDALCO INDUSTRIES LTD. & ANR.
WITH
MAT 1391 of 2013
THE STATE OF WEST BENGAL AND ORS.
-VS
SUMO METALLIC PVT. LTD. & ANR.
WITH
W.P.T.T. 4 of 2023
THE STATE OF WEST BENGAL & ORS.
VS.
BENTEC INDIA LTD.
WITH
W.P.T.T. 6 of 2023
IA NO: CAN 1 of 2024
CAN 2 of 2024
CAN 6 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED
WITH
W.P.T.T. 2 of 2024
STATE OF WEST BENGAL & ORS.
VS.
HARIOM POLYPACKS LTD.
WITH
W.P.T.T. 3 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
GSA RETAIL LTD.
WITH
W.P.T.T. 4 of 2024
STATE OF WEST BENGAL & ORS.
VS.
KRISHNA ALEX PVT. LTD.
WITH
7
W.P.T.T. 5 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
BIRLA TYRES LTD.
WITH
W.P.T.T. 6 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
JVL AGRO INDUSTRIES LTD. & ANR.
WITH
W.P.T.T. 7 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
MARS FRAGRANCE PVT. LTD.
WITH
W.P.T.T. 8 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
OM PRAKASH AGARWAL.
WITH
W.P.T.T. 9 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
MODERN INDIA CONCAST LTD.
WITH
W.P.T.T. 10 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
MODERN INDIA CONCAST LTD.
WITH
W.P.T.T. 11 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
K.D. GUPTA & CO.
WITH
8
W.P.T.T. 12 of 2024
STATE OF WEST BENGAL & ANR.
VS.
KUNAL GARG
WITH
W.P.T.T. 13 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
K.D. GUPTA & CO.
WITH
W.P.T.T. 14 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
M/S. MAYA AUTOMOBILE.
WITH
W.P.T.T. 15 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
RITUM JAIN.
WITH
W.P.T.T. 16 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
JHILMIL COMMODITIES PVT. LTD.
WITH
W.P.T.T. 17 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
MODERN INDIA CONCAST LIMITED.
WITH
W.P.T.T. 18 of 2024
STATE OF WEST BENGAL & ANR.
VS.
DEOKI NANDAN AGARWAL.
WITH
9
W.P.T.T. 19 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
HIMADRI CHEMICALS & INDUSTRIES LTD. (HCIL)
WITH
W.P.T.T. 20 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
ASANSOL POLYFABS PVT. LTD.
WITH
W.P.T.T. 21 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
HIMADRI CHEMICALS & INDUSTRIES LTD. (HCIL)
WITH
W.P.T.T. 22 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
TERAI OVERSEAS PVT. LTD.
WITH
W.P.T.T. 23 of 2024
STATE OF WEST BENGAL & ORS.
VS.
SANJEEV KUMAR MALL.
WITH
W.P.T.T. 24 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
GANPATI CHHAJER.
WITH
W.P.T.T. 25 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
JVL AGRO INDUSTRIES LTD.
WITH
10
W.P.T.T. 26 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
K.D. GUPTA & CO.
WITH
W.P.T.T. 27 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
S.K. SELIM @ SELIM SEKH
WITH
W.P.T.T. 28 of 2024
STATE OF WEST BENGAL & ANR.
VS.
AJAY PRAKASH AGARWAL
WITH
W.P.T.T. 29 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
EXCLUSIVE LINES & ANR.
WITH
W.P.T.T. 30 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
ASANSOL POLYFABS PVT. LTD.
WITH
W.P.T.T. 31 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
DELSEY INDIA PVT. LTD.
WITH
W.P.T.T. 32 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
TERAI OVERSEAS PVT. LTD.
WITH
11
W.P.T.T. 33 of 2024
THE STATE OF WEST BENGAL & ORS.
VS.
KHOKAN MOTORS WORKS PVT. LTD.
For the Respondent : Mr. Avra Mazumdar, Adv.
(in WPTT 6 of 2023 ) Ms. Alisha Das, Adv.
For Biocon Ltd., Tata Mr. Suman Bhowmik, Adv.
Play Ltd., Banomali Mr. Samrat Das, Adv.
Trading, Vistare Ms. Elina Dey, Adv.
Pringing, Strides Sasun
Ltd., Shyam Enterprise,
Churiwal Commercial
Co., Churiwal Technopack
Pvt. Ltd., Premchand
Jute Industries Pvt. Ltd.
For the Respondent in : Ms. Sweta Mukherjee, Adv.
WPTT 6 of 2023
(Ramco Industries Ltd.)
For the State : Mr. Kishore Dutta, Ld. A.G.
Mr. Anirban Ray, Ld. G.P
Mr. T.M. Siddiqui, Sr. Adv.
Mr. Debasish Ghosh, Adv.
Mr. Tanoy Chakraborty, Adv.
Mr. Saptak Sanyal, Adv.
For the Respondent : Mr. Sujit Ghosh, Sr. Adv.
(Samsung) in WPTT 6 of Ms. Mannat Waraich, Adv.
2023 Mr. Ashray Behura, Adv
Mr. Pujon Chatterjee, Adv.
Mr. Sutosom Bhattacharyya, Adv.
Hearing Concluded on : December 10, 2024
Judgement on : January 30, 2025
DEBANGSU BASAK, J.:-
1. We have heard appeals directed against the impugned
judgement and order dated June 24, 2013 passed in a batch of writ
petitions assailing the vires of the West Bengal Tax on Entry of
Goods into Local Areas Act, 2012 as it stood prior to its amendment.
We have also heard writ petitions directed against orders passed by
12
the Taxation Tribunal in respect of entry tax matters. We have heard
these matters analogously as similar issues are involved. All these
matters have been specially assigned to this bench.
2. Various assessees had assailed the vires of the Act of 2012
prior to its amendment, by way of writ petitions. By the impugned
judgement and order dated June 24, 2013, passed in such writ
petitions, learned Single Judge had declared the Act of 2012 to be
ultra vires the Constitution of India. Aggrieved by such decision of
the learned Single Judge, State has preferred various appeals.
3. During the pendency of the appeals, by the West Bengal
Finance Act, 2017 various provisions of the Entry Tax Act, 2012 had
been amended with retrospective effect. Vires of the West Bengal
Finance Act, 2017 had been challenged by assessees before the
Taxation Tribunal. Taxation Tribunal had set aside the amendments
introduced to the Entry Tax Act, 2012 by the West Bengal Finance
Act, 2017. State has assailed such decisions by way of the writ
petitions.
4. Learned Advocate General appearing for the State has
submitted that, the Act of 2012 was enacted exercising powers under
Article 246 of the Constitution of India read with Entry 52 List II
Schedule VII thereof. He has pointed out that, the Governor gave
assent to the Act of 2012 on March 31, 2012.
13
5. Learned Advocate General has contended that, the Act of
2012 provided for levy and collection of taxes on the entry of goods
into a local area in the State of West Bengal for consumption, use or
sale thereof. He has pointed out that, the West Bengal Tax on Entry
of Goods into Local Areas Rules were framed in exercise of powers
under Section 22 of the Act of 2012.
6. Referring to the impugned judgement and order dated June
24, 2013 of the learned Single Judge, learned Advocate General has
contended that, the learned Single Judge declared the Act of 2012
ultra vires relying upon the ratio of All India Reporter 1961
Supreme Court 232 (Atiabari Tea Company Ltd. Vs. State of
Assam), All India Reporter 1962 Supreme Court 1406 (Auto
Mobile Transport (Rajasthan) Ltd. Vs. State of Rajasthan) and
2006 Volume 7 Supreme Court Cases 241 (Jindal Steel Ltd. vs.
State of Haryana).
7. Learned Advocate General has contended that, learned Single
Judge observed that, compensatory tax is imposed for a specific
purpose or for few specific identifiable purposes. The Act of 2012 has
violated Article 309 and 304 (a) of the Constitution of India as it was
not compensatory. Moreover, State has failed to obtain Presidential
sanction under Article 304(b) of the Constitution of India. Learned
Single Judge has also observed that, where the assessee alleges
14
discrimination, it is for the assessee to establish the same and that
hardship of an assessee is no ground to challenge the validity of a
fiscal statute.
8. Learned Advocate General has submitted that, learned Single
Judge was pleased to stay the operation of the impugned judgement
and order dated June 24, 2013 for a period of 6 weeks. Appeals had
been preferred against the impugned judgement and order within
time. The Appeal Court had passed an interim order on July 31,
2013 by which the Appeal Court permitted assessment proceedings
to continue under the Act of 2012. Appeal Court however had
directed that, there would be no refund of the entry tax already
collected.
9. Learned Advocate General has contended that, during the
pendency of the appeals, 101st Amendment of the Constitution
occurred on September 16, 2016. Articles 246A, 269A and 279A had
been introduced into the Constitution for introduction of Goods and
Services Tax by subsuming all indirect taxes. Section 17 of the 101st
Amendment Act, had omitted Entry 52 from List II, VII Schedule of
the Constitution of India. Section 19 of the 101st Amendment had
provided for transitional measures by empowering the competent
legislatures or authorities to frame laws consistent with the
15
provisions of the 101st Amendment within a period of 1 year from
the date of commencement of the 101st Amendment.
10. Learned Advocate General has pointed out that, conflicting
views on entry tax laws promulgated by various States received the
consideration of a 9 Judges Bench of the Hon'ble Supreme Court. He
has referred to 2017 Volume 12 Supreme Court Cases 1 (Jindal
Stainless Ltd vs. State of Haryana) in this regard. He has referred
to the issues considered by the Constitution Bench in Jindal
Stainless Ltd (supra).
11. Learned Advocate General has contended that, Jindal
Stainless Ltd (supra) noted that entry tax legislations are framed in
exercise of powers under Article 304 (a) of the Constitution of India.
State had retained its sovereign power to levy tax on entry of goods
in a local area. Entry tax must be non-discriminatory between
imported goods and goods manufactured in the State.
Discrimination with valid reasons is permissible. Discrimination if
any is to be considered by the appropriate Bench. Article 304 (b) of
the Constitution of India does not deal with tax as a restriction to
free trade, commerce and intercourse under Article 301 of the
Constitution of India. Reasonable restrictions under Article 304(b) of
the Constitution does not comprehend levy of tax as a restriction to
free trade, commerce and intercourse. Article 304(a) and 304(b) of
16
the Constitution of India are disjunctive. Non-discriminatory entry
tax is not a restriction to free trade, commerce and intercourse
under Article 301 of the Constitution of India. High rate of tax is not
a restriction to free trade, commerce and intercourse. Dealers have
not disputed the need for taxation. The judgements in Atiabari
(supra), Automobile Transport (supra) and Jindal Steel Ltd.
(supra) and all other judgements that followed those
pronouncements to the extent of such reliance were overruled.
12. Learned Advocate General has submitted that, Entry Tax of
the State had also fallen for consideration in Jindal Stainless Ltd
(supra). He has pointed out the various paragraphs of Jindal
Stainless Ltd (supra) where the State Act was referred to, in
support of such contention. He has contended that, the only
requirement is that Entry Tax must be non-discriminatory in the
sense that, State must not discriminate between the goods imported
from other States and the goods produced in the State. Moreover,
according to him, Jindal Stainless Ltd (supra) has recognised that
a discriminatory Entry Tax may be levied but on valid grounds. He
has pointed out that, individual case of hostile discrimination, if any,
is to be determined by the regular benches hearing the matters.
According to him, learned Single Judge in the impugned judgement
and order has also noted that, if discrimination is alleged, such a
17
case has to be made out by the assessees. No specific case of
discrimination has been made out by any of the assessees.
13. Referring to 2019 volume 17 Supreme Court Cases 815
(State of Uttar Pradesh versus Indian Oil Corporation) learned
Advocate General has contended that, post Jindal Stainless Ltd
(supra) the appropriate course of action in respect of assessees
raising grievances of imposition of Entry Tax would be to permit
such assessees to file fresh petitions raising such issues. He has also
referred to 2018 volume 16 Supreme Court Cases 732 (Jay
Prakash Associates Ltd versus State of Madhya Pradesh and
others) in this regard.
14. Referring to the writ petitions directed against the orders of
the learned tribunal, learned Advocate general has contended that
the learned tribunal erred in fact and law. He has pointed out that
the Entry Tax Act was promulgated on April 1, 2012. Learned Single
Judge had struck down the Entry Tax Act on June 24, 2013 but
granted stay of the judgement for 6 weeks. On appeal, directed
against the judgement and order of the learned Single Judge, the
Appeal Court had permitted assessment to be carried on, by the
order dated July 31, 2013. Jindal Stainless Ltd (supra) had been
decided on November 11, 2016. Irrespective of whether the order
dated July 31, 2013 of the Appeal Court allowed the Entry Tax Act to
18
operate or not, the impugned judgement and order of the learned
Single Judge stood overruled on November 11, 2016. Jindal
Stainless Ltd (supra) had revived the Entry Tax Act, assuming that
it was inoperative on the expiry of the stay of 6 weeks from June 24,
2013. Thus, according to the learned Advocate General, there was no
legal impediment for the state legislature to enact the West Bengal
Finance Act, 2017 on March 6, 2017.
15. Learned Advocate General has relied upon Section 19 of the
101st Amendment which mandated every State to amend their
respective laws relating to goods or services or both in tandem with
the provisions of the Constitution of India within one year of its
commencement. The 101st amendment had been published in the
Gazette of India on September 18, 2016 after receiving the assent of
the President of India. The West Bengal Finance Act, 2017 had been
promulgated on March 6, 2017 to amend inter alia the Entry Tax Act
following the mandate of Section 19 of 101st Amendment. He has
pointed out that, Supreme Court in 2024 (121) GSTR 10 (SC) (State
of Telengana and Others vs. Tirumala Construction) held that
section 19 of the 101st Amendment did not prescribe any limitation
for the legislation but circumscribed a time limit.
16. Learned Advocate General has contended that, the State was
within its powers to amend the Entry Tax Act, 2012 by the West
19
Bengal Finance Act, 2017. Referring to 1962 SCC Online SC 61
(Ram Krishna Rama Nath versus Janpad Sabha) learned
Advocate General has contended that, a power to amend or repeal is
coextensive with the power to make a law.
17. A number of assessees have made submissions in course of
hearing of the appeals and the writ petitions.
18. Learned senior advocate appearing for Samsung India
Electronics Private Limited (hereinafter referred to as Samsung) has
submitted that, essentially, there are 4 areas of concern for the
Court in the present appeals and the writ petitions. First amongst
the areas of concern is whether the decision of Jindal Stainless Ltd
(supra) has struck down the impugned judgement and order of the
learned Single Judge dated June 24, 2013 or not. Secondly, did the
impugned judgement and order of the learned Single Judge dated
June 24, 2013 obliterate the Act of 2012 as it stood prior to its
amendment or was such Act of 2012 in force in view of the limited
stay order on not. Thirdly, was there a source of power vested with
the State of West Bengal at the time when the amendment by the
West Bengal Finance Act, 2017 had been affected or not. Fourthly
assuming that the answer to the 3rd area of concern was in the
negative, then, whether the amended Act of 2012 was discriminatory
or not.
20
19. Learned senior advocate appearing for Samsung has
submitted that, notwithstanding Jindal Stainless Ltd (supra)
having held that the compensatory tax theory was not compatible to
the constitutional scheme of Part XIII of the Constitution and
notwithstanding the learned Single Judge in the impugned
judgement and order dated June 24, 2013 holding the Act of 2012
are ultra vires on the basis of compensatory tax theory, the
impugned judgement and order is required to be formally set aside
by a competent Court since, neither the Act of 2012 nor the
impugned judgement and order dated June 24, 2013 of the learned
Single Judge were subject matter of adjudication before the Supreme
Court in Jindal Stainless Ltd (supra).
20. Learned senior advocate appearing for Samsung has
contended that, passing reference to the Act of 2012 of the State was
made in Jindal Stainless Ltd (supra) and that, although, State of
West Bengal was represented in such proceedings and arguments
advanced highlighting certain errors in the impugned judgement and
order dated June 24, 2013, nonetheless, the impugned judgement
and order of the learned Single Judge dated June 24, 2013 is
required to be set aside by a competent Court.
21. Learned senior advocate appearing for Samsung has
contended that, Jindal Stainless Ltd (supra) cannot be construed
21
to have overruled the impugned judgement and order of the learned
Single Judge dated June 24, 2013. He has pointed out that the
transfer petition bearing No. 291/2017 seeking transfer of intra-
Court appeals against the impugned judgement and order of the
learned Single Judge dated June 24, 2013 was filed before the
Supreme Court by the State. However, the same came to be
dismissed by the Supreme Court by its order dated March 21, 2017.
22. Learned senior advocate appearing for Samsung has
contended that, till such time, the Division Bench in the appeal
issues a formal judicial order setting aside the impugned judgement
and order of the learned Single Judge dated June 24, 2013, the
finding by the learned Single Judge in the impugned judgement and
order to the effect that the Act of 2013 is ultra-vires Article 304 (b) of
the Constitution continues to remain in operation.
23. In support of such contentions, learned senior advocate
appearing for Samsung has relied upon 1962 SCC Online SC 8
(Smt. Ujjam Bai versus State of Uttar Pradesh), 1996 Volume 1
Supreme Court Cases 435 (State of Kerala vs. M.K.
Kunhikannan Nambiar Manjeri Manikoth, Naduvil and Others)
and 1997 Volume 3 Supreme Court Cases 443 (Tayabbhai M.
Bagasarwalla and Another vs. Hind Rubber Industries PVT. Ltd.
and Others.).
22
24. Learned senior advocate appearing for Samsung has
submitted that, discriminatory aspect of any Entry Tax Act is to be
considered on an individual assessee bringing on record adequate
material in that regard. In support of such contention, he has relied
upon 2021 Volume 11 Supreme Court Cases 776 (Bharti Airtel
Limited vs. Assessing Authority, Orissa Entry Tax and Another),
2019 Volume 17 Supreme Court Cases 815 (State of Uttar
Pradesh and Others vs. Indian Oil Corporation Limited and
Others) and 2017 SCC Online SC 2197 (State of Andhra Pradesh
and Others vs. Sree Rayalaseema Alkalies and A. Che. And
Others).
25. Learned senior advocate appearing for Samsung has
contended that, there are various provisions in the Act of 2012 prior
to its amendment, which are discriminatory in nature. He has
referred to Section 4 (1), (4) (b) (c), and 5 of the Act of 2012 in this
regard. He has contended that, the unamended Act of 2012 allowed
deductions from the turnover of imports of goods which were
purchased in the same form against a tax invoice under the West
Bengal Value Added Tax Act, 2003 or the West Bengal Sales Tax Act,
1994 by a dealer registered under such Acts and further allowed
deductions from the turnover of imports of such goods which had
23
been from within the State of West Bengal from another place of
business of such dealer, respectively.
26. Learned senior advocate appearing for Samsung has
contended that, to overcome the discriminative burden of tax on
imported goods created by the operation of the unamended
provisions of clauses (b) and (c) of Section 4 (5) of the Act of 2012
State of West Bengal has enacted West Bengal Finance Act, 2017 by
which, amendments to the Act of 2012 were introduced. He has
pointed out that the amendments effected were given retrospective
effect.
27. Learned senior advocate appearing for Samsung has
contended that the amendments effectuated to the Act of 2012 by
the West Bengal Finance Act, 2017 are not legally valid. He has
pointed out that, the initial stay granted to the impugned judgement
and order dated June 24, 2013 was for a period of 6 weeks from the
date of such order that is August 18, 2013. Division Bench had
passed an order dated July 31, 2013 while hearing the intra-Court
appeal directed against the impugned judgement and order of the
learned Single Judge dated June 24, 2013. Division Bench had
issued limited directions with regard to the assessment proceedings
and the refund of entry tax already collected. According to him,
Division Bench did not stay the operation of the impugned
24
judgement and order and consequently, the unamended Act of 2012
did not revive subsequent to August 8, 2013.
28. Learned senior advocate appearing for Samsung has
contended that, once a statute is declared as unconstitutional it is
as though, such statute was never passed. In support of such
contention, he has relied upon All India Reporter 1959 Supreme
Court 648 (Deep Chand and Ors. Vs. State of Uttar Pradesh and
Others) and 1963 SCC Online Ker 36 (Lakshmi & Others vs.
Narayana Iyer & Others).
29. Learned senior advocate appearing for Samsung has
contended that, the learned Single Judge having declared the
entirety of the Act of 2012 to be ultra vires and the Division Bench
not having stayed such judgement and order, no formal amendment
could have been legally carried out as purportedly effectuated by the
West Bengal Finance Act, 2017. He has contended that, since the
amendment is invalid, the discriminative burden of entry tax
continues to remain.
30. Learned senior advocate appearing for Samsung has
contended that, the transitional provision of section 19 of the 101st
Constitutional Amendment Act does not vest the state legislature
with the requisite legislative powers to validate the amendment made
to the Act of 2012. He has pointed out that the 101st Constitutional
25
Amendment Act, 2016 was promulgated on September 8, 2016 with
effect from September 16, 2016. He has referred to section 19
thereof. He has pointed out that Entry 52 of List II was omitted with
effect from September 16, 2016. State of West Bengal had
promulgated the West Bengal Finance Act, 2017 on March 6, 2017
ostensibly in exercise of legislative powers conferred under section
19 of the 101st Constitutional Amendment Act of 2016.
31. Relying upon 2023 SCC Online SC 1376 (State of
Telangana and Others vs. Tirumala Constructions) learned
senior advocate appearing for Samsung has contended that, scope of
Section 19 of the 101st Constitutional Amendment Act 2016 was
considered therein. He has contended that, unforeseen or other
eventualities ought to have arisen in the administration of the
existing tax laws as a direct consequence of the changes introduced
under the 101st Constitutional Amendment Act for the promulgation
of the goods and services tax laws. According to him, there was no
unforeseen or other eventualities which had arisen and which
enabled the State of West Bengal to invoke the provisions of section
19 of the 101st Constitutional Amendment Act, 2016.
32. Learned advocate appearing for Emami Agrotech Ltd has
submitted that, retrospective amendments made to section 4 (5) of
the West Bengal Tax on Entry of Goods Act, 2012 with effect from
26
April 1, 2012 by leaving tax on the intrastate movement of goods for
the first time, in the absence of any supervening public interest, is
arbitrary and unreasonable. He has contended that, such
amendments must be struck down. He has also contended that,
when the taxes imposed retrospectively by any legislation by
retrospectively withdrawing the relief unequivocally conferred by a
valid statutory provision, the amendments in the absence of any
larger public interest, have to be held to be arbitrary and
unreasonable. He has relied upon 2016 Volume 15 Supreme Court
Cases 125 (Jayam And Company Vs. Assistant Commissioner
and Another) and 1975 SCC Online Cal 274 (Bengal Paper Mill
Co. Ltd. and Another Vs. Commercial Tax Officer, Calcutta and
Others) in this regard.
33. Learned advocate appearing for Emami Agrotech Ltd has
submitted that, validation acts can only be passed to cure defects
are lacuna which are in the nature of small repairs and not to carry
out substantial amendments which has the effect of living taxes and
transactions for the first time which was never the intent of the
legislature when the law was first enacted. In support of such
contention, he has relied upon 1973 Volume 1 Supreme Court
Cases 75 (M/s. Krishnamurthi and Co. Etc. Vs. State of Madras
and Another), 2004 Volume 5 Supreme Court Cases 783 (Tata
27
Motors Ltd. Vs. State of Maharashtra and Others) and 1985
Volume 2 Supreme Court Cases 197 (Lohia Machines Ltd. and
Another Vs. Union of India and Others).
34. Learned advocate appearing for Emami Agrotech Ltd has
contended that, the amendments made to the Entry Tax Act, 2012
by the West Bengal Finance Act, 2017 were never meant to be
implemented and brought about to nullify the judgement of the
learned Single Judge without curing the defects in substance.
35. Learned advocate appearing for Godrej Consumer Products
Ltd has contended that, his client challenged the constitutionality of
the West Bengal Tax on Entry of Goods into Local Areas Act, 2012 by
way of a writ petition being WP No. 128 of 2018. Such a writ petition
had been allowed by the impugned judgement and order of the
learned Single Judge. He has contended that, the impugned
judgement and order of the learned Single Judge should not be set
aside, as the provisions of the Act of 2012 under challenge in the
writ petition are unconstitutional and discriminatory.
36. Learned Advocate appearing for Tata Play Limited and Biocon
Ltd has submitted that, the impugned order of the learned Single
Judge stands impliedly overruled by Jindal Stainless Ltd (supra)
and 2021 Volume 11 Supreme Court Cases 705 (State of Kerala
Vs. Father William Fernandez and others). However, he has
28
contended that, the portion of the impugned judgement and order of
the learned Single Judge to the extent where it holds that levy of
taxes is discriminatory, it is in consonance with the ratio laid down
in Jindal Stainless Ltd (supra). He has contended that, the Entry
Tax Act, 2012 even without its amendments does not qualify the test
laid down in Jindal Stainless Ltd (supra).
37. Learned advocate appearing for Gloster Ltd and 6 more
assesses has submitted that, the statutory provisions such as
section 4 (5) (b) and (c) are discriminatory in view of the ratio laid
down in Jindal Stainless Ltd (supra). He has relied upon A T B
Mehtab Majid (supra), Shree Mahavir Oil Mills (supra), West
Bengal Hosiery Association (supra), Anand commercial agencies
(supra) and Hindustan National Glass and Industries Ltd
(supra) in support of his contentions.
38. Learned advocate appearing for Rohit Ferro Tech Ltd has
submitted that, his client underwent a corporate insolvency
resolution process under the provisions of the Insolvency and
Bankruptcy Code, 2016. He has contended that, all liabilities of the
corporate entity on account of successful resolution, stand
extinguished/abated. He has contended that, his client has no
liability for the period prior to the order dated April 7, 2022 passed
by the National Company Law Tribunal.
29
39. Learned advocate appearing for Ruchi Soya Industries Ltd
and 2 other assessees has contended that, the impugned judgement
and order of the learned Single Judge stands overruled in view of the
decision of the Hon'ble Supreme Court in Jindal Stainless Ltd.
(supra). Nonetheless, he has contended that, the Division Bench
before whom the appeals are pending, has to decide on the legality
and validity of the impugned judgement and order of the learned
Single Judge. Till such time a decision is rendered by the Division
Bench, the judgement of the learned Single Judge does not lose its
force as a final judgement. In this regard, he has relied upon Father
William Fernandez and Others (supra).
40. Learned advocate appearing for Ruchi Soya Industries Ltd
has contended that, the contention of the State that by virtue of the
stay granted by the impugned judgement and order, the Entry Tax
Act, 2012 was in force on the date of its amendment, is fallacious.
He has pointed out that, Division Bench passed an order providing
for an interim arrangement till the stay petition filed by the state is
heard and disposed of. Stay petition has not been disposed of by the
Division Bench. In any event, he has contended that, the impugned
judgement and order continues to remain in force. In support of
such contention, he has relied upon 1992 volume 3 Supreme
Court Cases 1 (Shree Chamundi Mopeds Ltd versus Church of
30
South India Trust Association) and 2007 volume 3 Calcutta
High Court Notes 178 (Pijush Kanti Chowdhury versus State of
West Bengal).
41. Learned advocate appearing for Ruchi Soya Industries Ltd
has contended that, the amending Act cannot have retrospective
effect. He has relied upon 2016 Volume 15 Supreme Court Cases
125 (Jayam And Company Vs. Assistant Commissioner and
Another). He has contended that, test laid down by the Supreme
Court for giving retrospective effect have not been satisfied. He has
pointed out that, Entry Tax Act came into effect from April 1, 2012
and that, the amendment introduced in March 2017 has created a
new liability. According to him, benefit of nontaxability for intra-local
area entries was enjoyed for the period from April 1, 2012 to March
2017 which is sought to be taken away by the amendment.
42. Learned advocate appearing for Ruchi Soya Industries Ltd
has contended that, the Entry Tax Act, 2012 is not compliant with
Article 304 (a). He has contended that, provisions of the Act
discriminate between imported goods and goods manufactured and
produced in the State of West Bengal. The former is subject to tax
whereas the latter is not.
43. The following issues have arisen for consideration in the
present matters:
31
i. What is the effect of the ratio of Jindal Stainless Ltd.
(supra) on the impugned judgment and order of the
learned Single Judge dated June 24, 2013?
ii. Was the Entry Tax Act, 2012 in force at the time of its
amendment on March 6, 2017 in view of the impugned
judgment and order dated June 24, 2013 of the learned
Single Judge?
iii. Are the amendments introduced to the Entry Tax Act of
2012 by the West Bengal Finance Act, 2017 valid?
iv. Are the amendments introduced by the West Bengal
Finance Act, 2017 to the Entry Tax Act, 2012
discriminatory?
v. Are the impugned orders of the learned Tribunal correct?
vi. To what relief or reliefs are the parties entitled to?
44. The specially assigned matters before us can be conveniently
classified into two categories, with the first category being the
appeals directed against the impugned judgment and order dated
June 24, 2013, passed by the learned Single Judge and the second
category being writ petitions directed against orders of the Tribunal
deciding on the vires of the amendments to the Entry Tax Act, 2012,
as introduced by the West Bengal Finance Act, 2017.
32
45. State of West Bengal had enacted the West Bengal Tax on
Entry of Goods into Local Areas Act, 2012. Several writ petitions had
been filed challenging the vires of the Act of 2012. By the impugned
judgement and order dated June 24, 2013, learned Single Judge had
held the Act of 2012 to be ultra vires Article 304 (b) of the
Constitution of India. Learned Single Judge had also granted stay of
the operative portion of the impugned judgement and order for a
period of 6 weeks from the date of such judgement and order.
46. State of West Bengal had preferred several appeals against
the impugned judgement and order dated June 24, 2013 passed by
the learned Single Judge. In such appeals, the Division Bench had
passed an order dated July 31, 2013. By such interim order, the
Division Bench had directed the assessments under the Act of 2012
would continue. However, Division Bench had restrained refund of
tax already collected.
47. Promulgation of the Constitution 101st Amendment Act, 2016
had occurred on September 8, 2016. The Constitution 101 st
Amendment Act, 2016 had come into force on September 16, 2016.
48. During the pendency of the appeals and the stay petitions of
the State, Supreme Court had pronounced Jindal Stainless Ltd
(supra) on November 11, 2016 holding that, compensatory tax
theory is not compatible with the constitutional scheme delineated
33
by Part III of the Constitution. It has however left the issue of levies
of Entry Tax satisfying the test of whether the tax burden of goods
imported from other States and goods produced within the State, to
be determined by the regular bench hearing such matters.
49. State had applied before the Supreme Court in TP (C) No. 291
of 2017 for transfer of the pending matters before the High Court to
the Supreme Court on February 23, 2017. By an order dated March
21, 2017 Supreme Court had dismissed TP (C) 291 of 2017 and
directed the High Court to proceed with the matter in accordance
with the law and in light of the judgement passed in Jindal
Stainless Ltd (supra).
50. State of West Bengal had promulgated the West Bengal
Finance Act, 2017 on March 6, 2017. Relevant provisions of the West
Bengal Finance Act 2017, for the purpose of the present matters, are
sections 5 and 6.
51. By section 5 of the West Bengal Finance Act, 2017, sections 4
(5) (b) and (c) of the Entry Tax Act, 2012 have been amended. By the
amendments introduced, retrospective effect from April 1, 2012 have
been given to the meaning of the expression "taxable turnover of
imports" as appearing in section 4 (1) of the Act of 2012.
52. It is in this factual matrix that we are considering the issues
that have fallen for decision in these batch of matters.
34
53. In holding that the Entry Tax Act, 2012 was ultra vires the
Constitution of India, learned Single Judge, in the impugned
judgement and order dated June 24, 2013, has referred to and relied
upon the ratio laid down in Atiabari (supra), Automobile
Transport (supra) and Jindal Steel Ltd (supra).
54. The issues that Jindal Stainless Ltd (supra) have answered
are framed in paragraph 11 thereof which are as follows: -
"11. At the hearing before us the learned counsel for the parties
agreed after a day long exploratory exercise that the questions
that fall for determination by this Court could be reframed as
under:
11.1. (i) Can the levy of a non-discriminatory tax per se constitute
infraction of Article 301 of the Constitution of India?
11.2. (ii) If answer to Question (i) is in the affirmative, can a tax
which is compensatory in nature also fall foul of Article 301 of the
Constitution of India?
11.3. (iii) What are the tests for determining whether the tax or
levy is compensatory in nature?
11.4. (iv) Is the entry tax levied by the States in the present batch
of cases violative of Article 301 of the Constitution and in
particular have the impugned State enactments relating to entry
tax to be tested with reference to both Articles 304(a) and 304(b)
of the Constitution for determining their validity?"
55. Jindal Stainless Ltd (supra) has answered the reference in
paragraph 1159 as follows: -
"1159. By majority the Court answers the reference in the
following terms:
1159.1. Taxes simpliciter are not within the contemplation of Part
XIII of the Constitution of India. The word "free" used in Article
301 does not mean "free from taxation".
35
1159.2. Only such taxes as are discriminatory in nature are
prohibited by Article 304(a). It follows that levy of a non-
discriminatory tax would not constitute an infraction of Article
301.
1159.3. Clauses (a) and (b) of Article 304 have to be read
disjunctively.
1159.4. A levy that violates Article 304(a) cannot be saved even if
the procedure under Article 304(b) or the proviso thereunder is
satisfied.
1159.5. The Compensatory Tax Theory evolved in Automobile
Transport case [Automobile Transport (Rajasthan) Ltd. v. State of
Rajasthan, AIR 1962 SC 1406 : (1963) 1 SCR 491] and
subsequently modified in Jindal case [Jindal Stainless Ltd.
(2) v. State of Haryana, (2006) 7 SCC 241] has no juristic basis
and is therefore rejected.
1159.6. The decisions of this Court in Atiabari [Atiabari Tea Co.
Ltd. v. State of Assam, AIR 1961 SC 232 : (1961) 1 SCR 809]
, Automobile Transport [Automobile Transport (Rajasthan)
Ltd. v. State of Rajasthan, AIR 1962 SC 1406 : (1963) 1 SCR 491]
and Jindal [Jindal Stainless Ltd. (2) v. State of Haryana, (2006) 7
SCC 241] cases and all other judgments that follow these
pronouncements are to the extent of such reliance overruled.
1159.7. A tax on entry of goods into a local area for use, sale or
consumption therein is permissible although similar goods are not
produced within the taxing State.
1159.8. Article 304(a) frowns upon discrimination (of a hostile
nature in the protectionist sense) and not on mere differentiation.
Therefore, incentives, set-offs, etc. granted to a specified class of
dealers for a limited period of time in a non-hostile fashion with a
view to developing economically backward areas would not
violate Article 304(a). The question whether the levies in the
present case indeed satisfy this test is left to be determined by
the regular Benches hearing the matters."
36
56. For the decision on the first issue raised in this batch of
matters, paragraph 1159.6 of Jindal Stainless Ltd (supra) is of
utmost importance where it has been held that, the decisions of the
Supreme Court in Atiabari (supra), Automobile Transport (supra)
and Jindal Steel Ltd (supra) and all other judgements that follow
such pronouncements are to the extent of such reliance, overruled.
57. Learned Single Judge in the impugned judgement and order
dated June 24, 2013 has relied upon Atiabari (supra), Automobile
Transport (supra) and Jindal Steel Ltd (supra) to hold that the
Entry Tax Act, 2012 is ultra vires the Constitution of India.
58. Learned Single Judge having relied upon Atiabari (supra),
Automobile Transport (supra) and Jindal Steel Ltd (supra) in
arriving at the constitutional validity of the Entry Tax Act, 2012 and
subsequently, Jindal Stainless Ltd (supra) having overruled
Atiabari (supra), Automobile Transport (supra) and Jindal Steel
Ltd (supra) and all other judgements that follow such
pronouncements, the impugned judgement and order dated June 24,
2013 does not survive the decision rendered in Jindal Stainless
Ltd (supra).
59. Significantly, attention of the Constitutional Bench in Jindal
Stainless Ltd (supra) had been drawn to the provisions of the Entry
37
Tax Act, 2012 although, the same was not directly in issue in such
reference.
60. The first issue noted in these batch of matters necessarily
has raised a question whether, by virtue of the decision in Jindal
Stainless Ltd (supra) the impugned judgement and order of the
learned Single Judge stood set-aside or not.
61. Although, Jindal Stainless Ltd (supra) has held in
paragraph 1159.6 thereof that, all judgements that follow Atiabari
(supra), Automobile Transport (supra) and Jindal Steel Ltd
(supra) stands overruled, nonetheless, the appeals directed against
the impugned judgement and order of the learned Single Judge
remained pending without a formal order of disposal of the same.
The appeals therefore are required to be formally disposed of by us
as an Appeal Court. We have to return a finding as to whether, the
impugned judgement and order of the learned Single Judge following
the overruled decisions of the Supreme Court rendered in Atiabari
(supra), Automobile Transport (supra) and Jindal Steel Ltd
(supra), in deciding the constitutional validity of the Entry Tax Act,
2012 should be sustained or not.
62. We have already returned a finding that, learned Single
Judge, in the impugned judgement and order dated June 24, 2013
proceeded on the basis of the ratio laid down in Atiabari (supra),
38
Automobile Transport (supra) and Jindal Steel Ltd (supra) to
decide on the constitutional validity of the Entry Tax Act, 2012.
Consequently, we hold that, the impugned judgement and order
dated June 24, 2013 cannot survive, subsequent to the
pronouncement of Jindal Stainless Ltd (supra).
63. In view of the discussions above, respectfully, we answer the
first issue by setting aside the impugned judgement and order dated
June 24, 2013 passed by the learned Single Judge.
64. While delivering the impugned judgement and order dated
June 24, 2013, learned Single Judge had granted stay of the same
for a period of 6 weeks. Within the period of 6 weeks of stay, the
Appeal Court on appeals directed against the impugned judgement
and order dated June 24, 2013, had passed an interim order dated
July 31, 2013 by which, the Division Bench directed the
assessments under the Act of 2012 to continue. However, Division
Bench had restrained refund of the tax already collected.
65. Having answered the first issue we take up the second issue
to the fifth issues together as they are interconnected as also for the
sake of convenience.
66. The interim order dated July 31, 2012 passed by the Division
Bench is still continuing. The appeals are yet to be disposed of. In
fact, the appeals would be disposed of, if we do so, by this judgement
39
and order. As on date therefore, the interim order dated July 31,
2012 is still continuing. At least no material was placed before us to
suggest otherwise in course of the long hearing of these matters.
67. The Division Bench while passing the interim order on July
31, 2012 obviously considered the Entry Tax Act, 2012 to be valid as
the validity of the Entry Tax Act, 2012 was in issue in the appeals. It
did not pronounce the Entry Tax Act, 2012 to be invalid at any point
of time prior to the date of the amendments introduced to the Entry
Tax Act, 2012 on March 6, 2017. Issue of validity of the Entry Tax
Act, 2012 was still open at the point of time of the amendments
being enacted.
68. Interim order passed by the Appeal Court on July 31, 2013
had permitted the assessment under the Entry Tax Act, 2012 to be
continued. It had also restrained refund of the tax already collected.
Appeal Court did not vacate the stay granted by the learned Single
Judge in the impugned judgement and order. Appeal Court had
regulated the implementation of the Entry Tax Act, 2012 in the
manner noted in its order dated July 31, 2013. Therefore, it cannot
be said that, the Appeal Court had decided on the vires of the Entry
Tax Act, 2012 finally on either side of the divide. In fact, Appeal
Court had made the interim arrangements as done by the interim
order dated July 31, 2013 on the basis that the Entry Tax Act, 2012
40
subsists. It had therefore allowed the assessment under the Entry
Tax Act, 2012 to continue with no refund being made.
69. Shree Chamundi Mopeds Ltd. (supra) has considered the
provisions of the Sick Industrial Companies (Special Provisions) Act,
1985 and held that, when the High Court passes an interim order
staying the operation of the order of the Appellate Authority
exercising powers under the provisions of the Act of 1985, the same
does not revive the appeal which had been dismissed as no such
proceedings was pending before the Appellate Authority.
70. Pijush Kanti Chowdhury (supra) has held that, passing of
an interim order staying the operation of a judgement, does not
mean that, the existence of the judgement is wiped out.
71. Applying the principles of Shree Chamundi Mopeds Ltd
(supra) and Pijush Kanti Chowdhury (supra) in the facts of the
present case, the interim order passed by the appeal Court dated
July 31, 2013 did not wipe out the impugned judgement and order of
the learned Single Judge dated June 24, 2013, nonetheless, at the
same time, the interim order had the effect of keeping the Entry Tax
Act, 2017 in operation, in the manner as modulated by the appeal
Court.
72. Authorities that have been cited at the bar namely, Ujjam
Bai (supra), M.K. Kunhikannan Nambiar Manjeri Manikoth,
41
Naduvil and Others (supra), Tayabbhai M. Bagasarwalla
Another (supra), Deep Chand (supra) and Lakshmi & Others
(supra) do not assist the assessees since, final pronouncement on
the legality, validity and vires of the Entry Tax Act, 2012 was yet to
be pronounced finally by the Appeal Court where, the issue of vires
was still open. It is trite law that, appeal is a continuation of the
original proceedings. In the original proceedings, the vires of the
Entry Tax Act, 2012 were under challenge. The judgement and order
passed in such proceedings were under challenge in the appeal with
the Appeal Court passing an interim order on the basis that, the
Entry Tax Act, 2012 was valid and without finally pronouncing on
the vires thereof. Appeal Court could not have passed the interim
order dated July 31, 2013 in the manner and form as it did, if it
considered the Entry Tax Act, 2012 to have been obliterated
subsequent to the filing of the appeals and as on the date of framing
of its order.
73. In view of the discussions above, we are not in a position to
arrive at a finding that, the Entry Tax Act, 2012 came to be declared
ultra vires on the expiry of 6 weeks from the date of the impugned
judgement and order of the learned Single Judge being June 24,
2013 and consequently stood obliterated. Consequently, we are also
unable to hold that, the amendments sought to be introduced by the
42
West Bengal Finance Act, 2017 to the Entry Tax Act, 2012 are
invalid simply on the basis that, the Entry Tax Act, 2012 stood
obliterated on the expiry of 6 weeks from the date of the impugned
judgement and order.
74. State legislature by the West Bengal Finance Act, 2017 had
amended the Indian Stamp Act, 1899, in its application to the State
of West Bengal, The West Bengal Taxation Tribunal Act, 1987, the
West Bengal Sales Tax (Settlement of Dispute) Act, 1999, the West
Bengal Tax on Entry of Goods into Local Areas Act, 2012 and the
West Bengal Value-Added Tax Act, 2003 in order to provide for
validation in respect of levy, assessment and collection of tax, et
cetera under the Entry Tax Act, 2012 as has been stated in the
objects clause of the West Bengal Finance Act, 2017.
75. The bone of contention between the parties is sections 5 and
6 of the West Bengal Finance Act, 2017. By such section 5 of the
West Bengal Finance Act, 2017 sections 4 (5) (b) and (c) of the Entry
Tax Act, 2012 were amended. Amendments were given retrospective
effect from April 1, 2012 that is the date when the Entry Tax Act,
2017 came into effect.
76. Prior to the amendment of section 4 (5) (b) and (c) of the
Entry Tax Act, 2012 the same were as follows: -
"4. .......................................................................................
(5)........................................................................................
43
(b) turnover of imports relating to entry of specified goods into a
local area, have been purchased in the same form against a tax
invoice, or invoice, or bill issued under the West Bengal Value
Added Tax Act, 2003, or the West Bengal Sales Tax Act, 1994, by
a dealer registered under the West Bengal Value Added Tax Act,
2003, or the West Bengal Sales Tax Act, 1994, as the case may
be;
(c) turnover of imports relating to entry of specified goods into a
local area where it is proved to the satisfaction of the
Commissioner that such goods have been transported from within
West Bengal from another place of business of such dealer or
importer other than a dealer;"
77. Section 5 of the West Bengal Finance Act, 2017 is as
follows: -
"5. In the West Bengal Tax on Entry of Goods into Local Areas
Act, 2012,-
in section 4, in sub-section (5), for clause (b) and clause (c), the
following clause shall be deemed to have been substituted with
effect from 1st day of April, 2012:-
"(b) turnover of imports of a dealer whose such turnover does not
exceed rupees five lakh during a return period, subject to a
maximum of total deduction of rupees twenty lakh in a year;""
78. Section 6 of the West Bengal Finance Act, 2017 is as follows:
"6. Notwithstanding anything contained in any judgment, decree
or order of any court or other authority, no levy, assessment
including provisional assessment, deemed assessment or
summary assessment, reassessment or collection of any tax,
interest, late fee or penalty made or purporting to have been
made under the provisions of the West Bengal Tax on Entry of
goods into Local Areas Act, 2012 (hereinafter referred to as the
said Act) before the date of coming into force of this provision,
shall be deemed to be invalid or ever to have been invalid on the
ground only that such levy, assessment including provisional
44
assessment, deemed assessment or summary assessment,
reassessment or collection was not in accordance with law and
such tax, interest, late fee or penalty levied, assessed,
reassessed or collected or imposed or purporting to have been
levied, assessed, reassessed or collected or imposed shall, for all
purposes, be deemed to be and always to have been validly
levied, assessed, reassessed or collected or imposed as if such
levy, assessment including provisional assessment, deeded
assessment or summary assessment, reassessment or collection
or action or thing, had been made, taken or done under the said
Act as amended by section 5 of the principal Act, and accordingly
-
(i) all acts, proceedings or things done or taken by the
State Government or by any officer of the State
Government of by any authority in connection with
the levy, assessment including provisional
assessment, deemed assessment or summary
assessment, reassessment or collection of such tax,
interest, late fee or penalty shall, for all purposes, be
deemed to be and to have always been done or
taken in accordance with law;
(ii) no suit or other proceedings shall be maintained or
continued in any court against the State Government
or any person or other authority whatsoever for the
refund of any tax, interest, late fee or penalty so
paid;
(iii) refund shall be made upon assessment to a dealer
who has already paid the tax but is covered by
clause (b) of sub-section (5) of section 4 of the said
Act; and
(iv) no court shall enforce any decree or order directing
the refund of any tax, interest, late fee or penalty so
paid:
45
Provided that nothing in this section be construed as
preventing any person from questioning, in accordance with the
provisions of the said Act and rules made thereunder, the
assessment of any tax for any period, or from claiming refund
of any tax, interest or late fee paid by him in excess of the
amount payable by him under the said Act.”
79. Section 6 of the West Bengal Finance Act, 2017 validates the
steps taken under the Entry Tax Act, 2012 notwithstanding anything
contained in any judgement, decree or order of any Court or other
authority. By the deeming clause introduced, it has made steps
taken under the Entry Tax Act, 2012 to be done as amended by
section 5 of the principal Act.
80. Bharti Airtel Limited (supra), has permitted the assesses to
file a fresh writ petition with adequate pleadings. Similar liberty has
been granted in State of Uttar Pradesh and Others (supra) and
Sree Rayalaseema Alkalies and A. Che. And Others (supra).
81. In the facts and circumstances of the present case, some
assesses approached the Tribunal complaining of discrimination by
reason of both the unamended Act of 2012 as well as the
amendment introduced thereto by the West Bengal Finance Act,
2017. In course of hearing of these matters, we had called upon the
learned counsels appearing for the assesses to bring to our notice
individual instances of the so-called discrimination. The common
answer has been that, the original applications before the learned
46Tribunal as also the writ petitions before the learned Single Judge of
the High Court did not contain such materials.
82. Learned Advocate General has also acknowledged the fact
that, in the event, an individual instance of discrimination is brought
to the notice of a judicial forum, the same should be considered in
light of the law prevailing.
83. In such circumstances, applying the ratio of Bharti Airtel
Limited (supra), State of Uttar Pradesh and Others (supra) and
Sree Rayalaseema Alkalies and A. Che. And Others (supra), we
permit the individual assessees to raise the contention of
discrimination if any, before the appropriate forum, in accordance
with law, if so advised.
84. Deep Chand (supra) has considered the validity of the UP
Transport Services (Development) Act, 1955 in the context of the
scheme of nationalisation of State Transport Service formulated by
the State Government and the consequential orders made by it and
the Motor Vehicles (Amendment) Act, 1956 passed by the
Parliament. It has held that, the amending Act occupies the same
field in respect of the schemes initiated after the amending Act and
therefore to that extent the State Act must yield its place to the
Central Act.
47
85. In Lakshmi & Others (supra), Kerala High Court has
noticed that, the Kerala Act (IV) of 1961 was struck down by the
Supreme Court in a decision reported at All India Reporter 1962
Supreme Court 723 (Kuhikoman Vs. State of Kerala). It has
noticed that the decision of the Supreme Court was rendered on
December 5, 1961 and that, Kerala Act (IV) of 1961 was modified to
come into force from February 15, 1961. It has also noticed that the
entirety of Kerala Act (IV) of 1961 was struck down by the Kerala
High Court. In such factual matrix, it has held that, since a statute
enacted in the teeth of the prohibition contained in Article 13 (2) of
the Constitution is ab initio void in its entirety, non-nest, nullity and
still born, no rights whatsoever could have flown from such an
enactment and that enactment could not have any operation
whatsoever.
86. Tirumala Constructions (supra) has considered section 19
of the 101st Constitutional Amendment Act and held that, section 19
and 20 thereof constitute incidental and transitory provisions with
limited life. With regard to section 19 thereof it has held that it was
not comparable to a mere parliamentary enactment and was not a
mere legislative device.
87. Jayam and company (supra) has considered retrospective
amendment to a tax act in the context of Tamil Nadu Value-Added
48Tax Act, 2006. It has observed that, in the realm of fiscal legislation,
legislature has the power to make provision retrospectively. However,
it has laid down principles and test which must be kept in mind
while enacting a fiscal legislation with retrospective effect.
88. Applying the principles that have been laid down in Jayam
and company (supra), it cannot be said that, the retrospective
amendments introduced to the Entry Tax Act, 2012 by the West
Bengal Finance Act, 2017 is unreasonable mainly because it
operates retrospectively. Nothing has been placed before us to
establish that the retrospective operation of a fiscal statute was
unduly oppressive or confiscatory or discriminatory or provides no
procedural machinery for assessment and levy of tax or a decree of
unforeseen or unforeseeable financial burden has been imposed for
the past period.
89. M/s. Krishnamurthi and company (supra) has recognised
the power of the legislature to enact laws with retrospective effect
and give retrospective operation to the provisions of a law. It has also
held that, the fact that the dealer is not in a position to pass on the
tax to others does not affect the competence of the legislature to
enact a law imposing tax retrospectively since it is a matter of
legislative policy.
49
90. Tata Motors Ltd (supra) has held that, although State has
enormous powers in the matters of legislation and in enacting fiscal
laws, actions taken by the State cannot be so irrational and so
arbitrary so as to introduce one set of rules for one and another set
of rules for another, by amending the laws in such a manner as to
withdraw the benefit that had been given earlier resulting in higher
burdens upon the assessees without any reason. It has struck down
section 26 of the Maharashtra Tax Laws (Levy, Amendment and
Repeal) Act, 1989.
91. In the facts and circumstances of the present case, the
amending act does not take away any benefit which has accrued to
any assessees by the amendments introduced retrospectively. At
least now materials have been placed before us to suggest so.
92. Lohia Machines Ltd (supra) has upheld the validity of the
Rule 19 A (3) of the Income Tax Rules, 1961 on the grounds that,
same was not arbitrary or whimsical or irrational.
93. Fr. William Fernandez (supra) has noticed Jindal
Stainless Ltd (supra) and considered the entry tax legislations of
State of Orissa, Bihar, Kerala and Jharkhand. It has pronounced on
the validity of each of the State laws involved therein.
94. In view of the discussions above, the 2nd issue is answered by
holding that, Entry Tax Act, 2012 was in force at the time of its
50amendment on March 6, 2017. The 3rd issue is answered by holding
that, the amendments introduced to the Entry Tax Act, 2012 by the
West Bengal Finance Act, 2017 are valid. The 4th issue is answered
by holding that the amendments introduced by the West Bengal
Finance Act, 2017 to the Entry Tax Act, 2012 are not discriminatory.
95. The first 4 issues being answered in the manner as noted in
this judgement and order, the 5th issue is answered by holding that
the impugned order of the learned tribunal cannot be sustained.
Impugned order of the learned tribunal is set aside.
96. In view of the discussions above, it would be appropriate to
allow all the appeals of the State government directed against the
impugned judgement and order of the learned Single Judge dated
June 24, 2013 and set aside such impugned judgement and order.
The writ petitions are disposed of by setting aside the impugned
order of the Tribunal. All connected applications in the appeals and
the writ petitions are disposed of. No order as to costs.
[DEBANGSU BASAK, J.]
97. I agree.
[MD. SHABBAR RASHIDI, J.]