M/S Gupta Dealers Pvt.Ltd Andanr v. The State Of Bihar And ORS

IN THE HIGH COURT OF JUDICATURE AT PATNA

Civil Writ Jurisdiction Case No.2127 of 2010 ====================================================== 1.

M/S Gupta Dealers Private LTD, a Company incorporated under the Companies Act. 1956 having its registered office at Mangal Bazar, Churipati, Katihar through its Director namely Ajay Kumar Gupta. 2.

Ajay Kumar Gupta, S/o Shri Natthi Lal Gupta, R/O - House No.8,VillageMangal Bazar, PO+PS - Katihar, Bihar ... ... Petitioner/s

Versus

1.

The State Of Bihar Thorough Secretary, Department of Revenue, Government of Bihar, New Secretariat, Vikash Bhavan, Bailey Road, Patna 2.

The Commissioner of Commercial Tax, New Secretariat, Vikash Bhavan, Bailey Road, Patna 3.

The Assistant Commissioner of Commercial Taxes, Katihar Circle ... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s :

Mr.Sharad Kumar Sinha, Advocate For the Respondent/s :

Mr.Vikash Kumar (SC 11) ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 09-09-2020 The petitioner has prayed for the following relief(s):- "For quashing the Bihar Act 19 of 2006 and Bihar Act 12 of 2007 by which the respondents have enhanced the rate of entry tax to 20% by virtue of Section 3 (1) of the Bihar Tax on Entry of goods into local area for consumption, use or sale therein Act 1993 as amended by the Bihar Act 19 of 2006 and Bihar Act, 2006 and Bihar Act, 2006 and Bihar Act, 12 of 2007 and the notification No. SO 95 dated 30/31.07.2008 issued by the Commissioner, Commercial Taxes, Government of Bihar by which the rate of tax on tobacco and tobacco products has been raised to 8% and 16% respectively." The present petition was tagged along with the

2/6 other cases of similar nature and listed for hearing before different Benches from time to time.

In effect, the petitioner challenged the Constitutional validity of different provisions of the Bihar Tax on Entry of Goods into Local Area for Consumption, Use or Sale Therein Act, 1993, as amended from time to time. It is a matter of record that Hon'ble the Apex Court vide judgment dated 14th of July, 2006 passed in Civil Appeal No. 3453 of 2002, titled as M/s. JINDAL STAINLESS Ltd. & ANR. Vs. STATE OF HARYANA AND ORS. had permitted the parties, before the Supreme Court, to place within two months additional material in the concerned writ petitions. In most of the cases, such an additional material was not placed by the parties, perhaps for the reason that the issue decided in terms of the said judgment was pending consideration before a Larger Bench of Hon'ble the Apex Court.

Subsequently, a Constitution Bench (Nine Judges) of the Hon'ble Apex Court in the case of JINDAL STAINLESS LIMITED & ANOTHER VS. STATE OF HARYANA & OTHERS, reported in (2017) 12 SCC 1, after examining the correctness of the decision rendered in the case of Jindal Stainless Ltd. (2) and another Vs.

3/6 others, reported in (2006) 7 SCC 241 has observed as under: "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".

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 and subsequently modified in Jindal's case has no juristic basis and is therefore rejected.

1159.6. The decisions of this Court in Atiabari, Automobile Transport and Jindal 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

4/6 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, setoffs 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.

1160. States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken would not contravene Article 304(a) of the Constitution. 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.

1161. The questions whether the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country are left open to be determined in appropriate proceedings."

5/6 Perhaps, the only surviving issue requiring consideration by this Court is the one pointed out in Paragraph 1161, reproduced supra.

However, after the matter was heard for some time, we find the record to be totally silent on facts or grounds with regard thereto. No doubt, the issue is purely legal. But even the relevant provisions of the Statute claimed to be ultra vires are not on record and the reason is not far to seek for the petition was filed way back in the year 2010 and the Legislation was amended/enforced subsequently. That apart, even during the course of hearing we found absolute incoherence with regard thereto.

As such, we are of the considered view that each one of the petitioners file a fresh petition placing on record not only the specific legislation or part thereof, Constitutional validity whereof they wish to challenge, as also specify the grounds, in addition to the one reproduced supra.

This they are permitted to do so within a period of eight weeks on the same and subsequent cause of action. As and when such petition is filed, the same shall be considered for hearing on priority basis.

Petition stands disposed of in the aforesaid terms.

6/6 Interlocutory Application, if any, shall stand disposed of.

(Sanjay Karol, CJ) ( S. Kumar, J) B.Kr./- AFR/NAFR CAV DATE Uploading Date 18.09.2020 Transmission Date