Indian made Foreign Liquor not Taxable under UP Entry of Goods into Local Area Act: Allahabad HC [Read Order]

The Allahabad High Court held that Indian made foreign liquor not taxable under UP Entry of Goods into Local Area Act, 2007.

The writ petition under Article 226 of the Constitution of India has been filed wherein the writ petitioner is aggrieved by the adjudication order for recovery of the amount of Rs.2,78,02,393/- being entry tax for the period of April to May, 2005 and the order passed in appeal dated December 31, 2022.

At the very first instance, counsel appearing on behalf of the petitioner submitted that the provisional assessment order was passed as per Section 4(A) of the Uttar Pradesh Entry of Goods into Local Area Tax Act, 2000 (‘Act’) read with Rule 41(5) of the Uttar Pradesh Sales Tax Rule, 2000. It was submitted that the Act was held to be ultra virus by the High Court, Allahabad and the matter is pending before the Supreme Court.

In the meantime, the present Act was brought in by way of an ordinance and is named as Uttar Pradesh Entry of goods into Local Area Act, 2007 (‘New Act’). The Act in Section 1(3) makes it clear that the Act would be deemed to be in force from November 1, 1999.

A Single Bench of Justice Shekhar B. Saraf observed that “The Appellate Authority while passing the order has not considered the arguments placed by the petitioner with regard to the absence of goods in question in the schedule. It is to be noted that if the goods in question are not in the schedule of the New Act, the authorities had no jurisdiction whatsoever to impose entry tax on the same. This question is going to the very root of the matter and the authority should have considered and answered the same.”

“It is clear that the provisional assessment was done as per the earlier Act of 2000 while final assessment has been done under the New Act. The arguments raised by counsel appearing on behalf of the petitioner appears to be a valid one with regard to the fact that the New Act does not contain IMFL in the schedule, and accordingly, under the New Act, no final assessment could have been done with regard to the goods which were not included in the schedule of the New Act” the Court noted.

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