JAIPRAKASH ASSOCIATES LTD Vs. STATE OF M P

JUDGEMENT

(1.) In these cases various issues of seminal importance are involved. Pursuant to the directions given by this Court in Jindal Stainless Ltd. (2) and Anr. v. State of Haryana and Ors. (2006 (7) SCC 241) various High Courts have heard the Writ Petitions filed challenging the legality of levy of Entry Tax in the State by concerned Statute of the State. In most of the cases, Entry Tax has been introduced after abolition of Octroi. A series of judgments of this Court, for example, Atiabari Tea Co. Ltd. v. State of Assam (1961 (1) SCR 809), Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan (1963 (1) SCR 491), Khyerberi Tea Co. Ltd. v. State of Assam (1964 (5) SCR 975), Meenakshi v. State of Karnataka (1984 Supp SCC 326), Bolani Ores Ltd. v. State of Orissa (1974 (2) SCC 777) and Kamaljeet Singh and Ors. v. Municipal Board, Pilkhwa and Ors. (1986 (4) SCC 174) apart from Jindal's case (supra) have been pressed into service by the parties. Stand of the appellants in the present cases essentially is that true nature of the levy of Entry Tax has to be seen and that has not been done. With reference to paragraphs 31 and 42 of Jindal's case (supra) it has been submitted by assessees-appellants that Entry Tax is really in essence not a tax in the classical sense, but a sub class of fee. Some High Courts by the impugned judgment have held that Clauses (a) and (b) of Article 304 of the Constitution of India, 1950 (in short the Constitution') are independent of each other and if law is saved under Article 304 (a) then it need not be tested with reference to Clause (b) of Article 304 for determining its validity.

(2.) It is to be noted that almost all the cases on which the parties have placed reliance did not relate to Entry Tax and related to levy in the context of tax on vehicles brought inside the local area. These are commonly known as transport cases. Those cases like Meenakshi's case (supra) were decided because of Presidential permission in terms of Article 304 was there. The applicability of Part XIII is also in issue. It is not contended and in our view rightly that compensatory tax is not levied on trade. Though some of the important factors have been addressed to by the Constitution Bench in Jindal's case (supra) certain other important constitutional issues are involved because the approach so far as the levy on transport cases indicated above are concerned is conceptually and contextually different from Entry Tax cases. In that sense, the foreign decisions, more particularly, the Australian cases decided in the background of Section 95 of the Australian Constitution may not have much relevance so far as cases relating to Entry Tax are concerned.

(3.) In Jindal's case (supra) in paras 16 and 46 it was noted as follows: