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Entry Tax not Violative of Freedom of Trade and Commerce, says Supreme Court

In a setback to business entities, the Supreme Court on Friday upheld the entry tax on goods coming into a state

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Income tax (Representational Image), Pixabay

New Delhi, November 11, 2016: In a setback to business entities, the Supreme Court on Friday upheld the entry tax on goods coming into a state, holding that it was not in violation of the freedom of trade and commerce guaranteed under Article 301 of the Constitution and free trade does not mean “free from tax”.

By a majority verdict of 7:2, the Supreme Court held that “States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken, would not contravene Article 304 (a) of the Constitution.”

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“Only such taxes as (which) are discriminatory in nature are prohibited by Article 304(a). It follows that levy of a non-discriminatory tax would not constitute an infraction of Article 301”, the judgment said.

While majority verdict was by Chief Justice T.S. Thakur, Justice A.K. Sikri, Justice S.A. Bobde, Justice Shiva Kirti Singh, Justice N.V. Ramana, Justice R. Banumathi, Justice A.M. Khanwilkar; Justice D.Y. Chandrachud and Justice Ashok Bhushan in separate judgments dissented from the majority view.

The majority judgment said that “Article 304 (a) frowns upon discrimination (of a hostile nature in the protectionist sense) and not on mere differentiation. Therefore, incentives, set-offs etc. granted to a specified class of dealers for a limited period of time in a non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a).”

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Having said this, the majority judgment said that even though goods on which entry tax is being imposed are not being produced in the taxing State, yet a “tax on entry of goods into a local area for use, sale or consumption therein is permissible although similar goods are not produced within the taxing state.”

However, the court left open the question to be decided at a later stage whether “the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country …”

The case is rooted in the challenge to the constitutional validity of the laws enacted by the 14 States providing for levy of a tax on the “entry of goods into local areas comprising the States”.

The challenge to these laws was on the grounds of their being violative of the constitutionally recognised right to free trade and commerce guaranteed under Article 301 of the Constitution.

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Haryana law – Haryana Local Development Act, 2000 – providing for the entry tax was assailed by the Jindal Stainless Ltd.

The High Courts of Assam, Arunachal Pradesh, Jharkhand, Kerala and Tamil Nadu struck down the levies imposed by their respective States on the ground that they were discriminatory in nature hence violative of Article 304(a) of the Constitution.

When these States approached the apex court challenging the decision of the High courts, the two judges’ bench referred the same to a Constitution Bench for an authoritative pronouncement on as many as ten questions framed by them. (IANS)

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U.S. President Donald Trump Interviews Indian American Judge Under Consideration

However, other factors such as immigration, the powers of the president and any possible litigation involving the 2016 election of Trump and the alleged Russian interference are at play.

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Donald Trump
Earlier on Monday, Trump appointed his Deputy Principal Press Secretary Raj Shah to a key role in the difficult process of getting his nominee for the Supreme Court approved by the Senate. VOA

Indian American federal appeals court judge Amul Thapar has emerged as a “serious” contender for a spot in the US Supreme court and has been interviewed for the position by President Donald Trump, according media reports.

He was one of four judges interviewed for the position on the nation’s highest court by Trump on Monday, according to The Washington Post and other media outlets that quoted unnamed sources who had been briefed about the meetings.

Trump’s Spokesperson Sarah Sanders confirmed that he met for 45 minutes with four candidates, but would not identify them.

Trump has said he would announce his pick next Monday.

Thapar was appointed by Trump last year to the federal Sixth Circuit Appeals Court based in Cincinnati, Ohio, that covers four states including his home state of Kentucky.

Considered a conservative, Thapar, 49, had served as a federal prosecutor before President George W. Bush appointed him a judge of the federal court for Eastern Kentucky by in 2007.

Thapar has the backing of Mitch McConnell, the influential Senate Majority Leader from Kentucky, for the Supreme Court vacancy caused by the retirement of Justice Anthony Kennedy last month.

“I think he’s absolutely brilliant, with the right temperament,” McConnell said on Saturday.

The Washington Post said Trump’s meeting with Thapar “was described by several White House aides as both a gesture of respect for the Senate GOP leader and evidence that he is in serious contention”.

He is the second Indian-American judge to be a leading contender for the Supreme Court showing the community’s reach across both parties and its influence.

Washington Appeals Court Judge Sri Srinivasan was among the top choices considered by then President Barack Obama for the Supreme Court in 2016.

Obama ultimately picked Merrick Garland but McConnell blocked the nomination refusing to take it up for Senate’s consideration citing the presidential election coming up later that year.

Earlier on Monday, Trump appointed his Deputy Principal Press Secretary Raj Shah to a key role in the difficult process of getting his nominee for the Supreme Court approved by the Senate.

“Raj Shah will oversee communications, strategy and messaging coordination with Capitol Hill allies,” Sanders said in a statement.

Legalised abortion that many countries like India take for granted is looming over the selection of the next Supreme Court judge, with many Senators making it the litmus test to vote for or against a nominee.

It is likely that a case involving abortions may come up before the Supreme Court leaving open the possibility a conservative majority bench could overturn its 1973 ruling legalising it.

During his election campaign Trump changed his stance and came out as an opponent of abortions and said that he would appoint judges with the same view.

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Raj Thapar told the newspaper that his son’s only dream was to become a Supreme Court Justice. Pixabay

But he said last week that he would not discuss with candidates their views on abortion.

The Republicans have slender two-vote lead in the 100-member Senate and at least one Senator from the party, Susan Collins, has said that keeping abortions legal would be a requirement for supporting the Trump nominee and another, Lisa Murkowski, has previously opposed efforts to overturn the 1973 ruling.

The 49 Democrats and the two independents are all expected to oppose any Trump nominee and Shah will have to work with Republicans in Congress to get a majority backing for the candidate.

However, other factors such as immigration, the powers of the president and any possible litigation involving the 2016 election of Trump and the alleged Russian interference are at play.

Thapar is widely considered to conservative in his approach, which aligns him with Trump and his base.

His father, Raj Thapar, told Courier Journal that his son is so conservative that he “nearly wouldn’t speak to me after I voted for Barack Obama.”

Thapar was born in Detroit and his family wanted him to become a doctor, but he chose law instead, the newspaper said.

Raj Thapar told the newspaper that his son’s only dream was to become a Supreme Court Justice.

Amul’s maternal grandfather had impressed on him how Mahatma Gandhi had defeated the British using non violence, Raj Thapar told the newspaper.

According his father, Amul had converted to Catholicism when he married Kim Schulte, a real estate agent, Courier Journal reported.

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During his election campaign Trump changed his stance and came out as an opponent of abortions and said that he would appoint judges with the same view. Pixabay

Thapar’s mother Veena Bhalla sold a successful restaurant after 9/11 to work as a civilian clinical social worker to help soldiers returning from the battlefield, the newspaper reported quoting McConnell.

Also Read: Indian Embassy in Abu Dhabi Urges Indians To Report To Any Instance of Salary Delay

According to Thapar’s bio for a convention of the National Asian Pacific American Bar Association his father had come to the US to study and after graduating went to work for Ford Motor Company.

Later, he bought a share of a heating and air conditioning company. (IANS)