A Division Bench of the Bombay High Court has recently upheld the constitutionality of the Goa Tax in Entry of Goods Act, 2000.
The bench of Justice M S Sonak and Justice Valmiki Sa Menezes placed reliance on the decision of the Constitution Bench of the Supreme Court in Jindal Stainless Limited and another vs. State of Haryana and Ors. which had upheld the constitutional validity of entry taxes imposed by states on goods coming in from other states.
The petitioners/assessee challenged the constitutional validity of the Goa Tax on Entry of Goods Act, 2000, for want of legislative competence and, in any case, for contravening Articles 14, 265, 301, and 304(a) of the Constitution of India. The petitioner sought the consequential relief of a refund of entry tax recovered by the state from the petitioners.
The Goa Legislative Assembly enacted the Entry of Goods Act, of 2000, after the bill was introduced with the previous sanction of the President. The Act provided September 1, 2000, as the appointed date on which it would come into force.
The petitioner, Bharti Telemedia Ltd. (BTL), is in the business of providing Direct Home (DTH) and cellular telecommunication services in various states in India, including the State of Goa, under a licence issued in terms of the Indian Telegraph Act 1885.
The petitioners urged that the entry tax be related to the levy of import duties under Entry 41, read with Entry 83 of List I of the Seventh Schedule to the Constitution. The state legislature has no legislative competence to enact the Goa Tax on Entry of Goods Act, 2000. It was further contended that the Act and the levy of the tax violate Articles 14, 19(1)(g), 265, and 301 of the Constitution of India.
It was further contended that the impugned Act textually and contextually excludes imported goods from its purview. Yet, the State authorities insist upon the levy of entry tax on imported
goods and such levy is ultra vires the impugned Act and 301 of the Constitution of India.
The petitioners also urged that the tax levy for entry of goods into a local area directly impedes the freedom of trade guaranteed under Article 301 of the Constitution. Since there are no features essential to save such a levy under Article 304(b), the levy of tax under the impugned Act was argued to be wholly unconstitutional, null and void.
The Division Bench of Justices Valmiki Sa Menezes and M S Sonak observed that the argument, based upon the local area and the consequent effect upon the legislative competence of the State, additionally stands answered by the decision of the Division Bench of this Court in Hindustan National Glass & Industries Limited.
The Bombay High Court thus dismissed the petition, observing that “Indeed, these Petitions were instituted before the decision of the Constitution Bench in Jindal Stainless Limited. Therefore, most of the raised contentions stand answered against the Petitioners in the Nine Member Constitution Bench decision in Jindal Stainless Limited.”
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