HC quashes TN Entry Tax Act
Express News ServiceChennai, March 22: The Madras High Court on Thursday struck down the Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001.
‘‘We have no hesitation in holding that levy of entry tax under the Act is violative of clause (a) of Article 304 of the Constitution. We hold that the demand and collection of entry tax is illegal, unauthorised and violative of Article 301 of the Constitution,’’ the First Bench, comprising Chief Justice A P Shah and Justice K Chandru, observed while allowing a batch of writ petitions challenging the Constitutional validity of the Act.
Around 1,000 petitioners, including ITC Limited, have filed petitions seeking to quash the enactment.
The petitioners said, the Act which was brought into force in December 2001 had empowered the State Government to levy and collect tax on entry of scheduled goods into any local area for consumption, use and sale without exceeding 30 percent of interest specified by the government.
It was a direct and immediate impediment to the freedom of the trade guaranteed under Article 301 of the Constitution, the petitioners argued and contended that the assent of President was not obtained under Article 304 (B) for the levy of entry tax under the Act.
On a careful perusal of the case, the Bench held, ‘‘We hold that the levy of entry tax on goods imported from other states and abroad to Tamil Nadu is not compensatory in nature. The State Government cannot discharge its burden by placing materials before the court that the payment of entry tax is reimbursement for the benefit provided or to be provided to tax payers. The levy imposing entry tax being discriminatory is also violative of Article 304 (A) of the Constitution.’’
THE NEW INDIAN EXPRESS