UNION OF INDIA Vs. STATE OF ORISSA

JUDGEMENT

(1.) ALL these Writ Petitions involve common question of law. They were, therefore, with the consent of Learned Counsel for the parties, heard together and are being disposed of by this Judgment.

(2.) THE common question of law that arises for determination is whether levy of entry tax under the provisions of the Orissa Entry Tax Act, 1999 and the Rules made thereunder on different goods brought by the Union of India into the local areas of the State of Orissa is legal and valid?

(3.) SINCE the grounds taken and the question involved in all these Writ Petitions are common, for the sake of convenience, we briefly indicate the facts of W.P.(C) No. 5791/2002. The Union of India represented by the General Manager, Central Organization, Railway Electrification, and its officers, (hereinafter called the Railway) have filed the Writ Petition with a prayer to quash the letter dated 19.7.2001. (Annexure -3) and further to issue an appropriate writ or direction declaring that the Petitioner -Railways are not exigible to entry tax as is being levied by the Opposite Parties and further to direct the Opposite Parties to refund the tax collected by them and paid by the Petitioners under protest. The Commercial Tax Officer, Cuttack -III Circle, Jajpur Road, (O.P. No. 5) issued notices dated 4.7.2000 in Form -E -4 under Rule 10 (2) of the Orissa Entry Tax Rules, 1999 to the Depot Store Keeper, Railway Electrification, Dhanmandal, to the effect that entry tax to the extent of Rs. 69,136/ - and Rs. 1,11,600/ - for the months of 2/2000 and 3/2000 respectively was payable, vide Annexure 1. Similar notices were also issued from time to time for the subsequent periods. On 12.7.2000 Petitioner No. 4 - the Deputy Controller of Stores, Railway Electrification, Bhubaneswar, addressed a letter to the Commissioner of Commercial Taxes, Orissa, requesting him to exempt levy of entry tax on the goods meant for Railway electrification and Carriage Repair Workshop at Mancheswar, vide Annexure -2. Thereafter in response to the letter dated 30.5.2001 of the Divisional Railway Manager (Engg), South Eastern Railways, Bhubaneswar, regarding payment of entry tax on various railway materials, the Additional Commissioner of Commercial Taxes by letter dated 19.7.2001 (Annexure -3), which is sought to be quashed in this proceeding intimated that there was no impediment on the way of levy of Orissa Entry Tax on the Railway properties in the event such properties appear in the Schedule to O.E.T. Act, 1999 and enter into a local area inside the State of Orissa, and directed to make payment of the tax within 15 days of receipt of materials. The material part of the aforesaid letter is extracted hereunder for appreciation of the point at issue: To clarify the matter further, I am directed to invite your kind attention to the rulings of the Hon'ble Supreme Court in case of Collector of Customs and Anr. v. State of West Bengal and Ors. (1999) 113 -STC P. 167 (SC). The Hon'ble Court referring to the decision of the Constitution Bench consisting of nine Judges in Sea Customs Act AIR 1963 (SC) 1760 and a later Constitution Bench Judgment in the case of New Delhi Municipal Committee v. State of Punjab : AIR1997SC2847 upheld the view that the sale of goods by customs authority is liable to sales tax and such authorities would be a dealer under the Bengal Finance (Sales Tax) Act. Coming to such conclusion, the Hon'ble Supreme Court have referred with approval the following observation in the case of Sea Customs Act. We may in this connection contrast Sales Tax which is also imposed with reference to goods sold where the taxable event is the Act of Sale. Therefore, though both Excise Duty and Sales Tax are levied with reference to goods, the two are very different imposts, in one case the imposition is on the Act of manufacture of production while in the other it is on the act of sale. In neither case, therefore, can it be said that the Excise Duty or Sale Tax is a tax directly on the goods for in that event they will really become the same tax. Thus applying the ratio of the above ruling it can be safely said that levy of Entry Tax is not directly on the property of the Government of India or the property of Indian Railway. This is a levy on the event of entry of goods to a local area in the State of Orissa for which the constitutional immunity is not available.