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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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Love Jihad Case : Kerala’s State Women Commission Directs SP to submit report on Hadiya’s Condition

24 year old Akhila had converted to Islam and taken the name Hadiya to marry Shafin Jahan.  However, their marriage was declared null and void by the High Court of Kerala

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Office of Kerala Women Comission
Office of Kerala Women Comission. Official Website KWC

Kerala, October 28, 2017 : A day after a video of Hadiya pleading to be ‘saved’ from her father’s brutalities was released, Kerala’s State Women Commission has directed Kottayam Superintendent of Police to inquire and submit a report on Hadiya’s present conditions.

In the video release at a press conference in Kochi by social activist Rahul Eashwar, Hadiya can be heard saying, “You have to get me out. I am sure I will be killed tomorrow or the day after.” Hadiya claims that her father is physically assaulting her and pleads to be saved in the video before her voice trails away.

The direction came following reports that Hadiya is being sedated and physically abused at her parents’ house.

The State Women Commission has told the SP that an officer not less than the rank of a DSP should conduct the inquiry and submit a report on the condition of the 24-year old woman in love jihad case.

24 year old Akhila had converted to Islam and taken the name Hadiya to marry Shafin Jahan.  Their marriage was declared null and void by the High Court of Kerala after Hadiya’s father Ashokan has approached the court, claiming that his daughter had been forcefully converted and her alleged husband was involved in plans to take her out of the country for questionable reasons.

Consequently, Hadiya’s husband Shafin Jahan had approached the Supreme Court and challenged the order by the High Court of Kerala, which is still hearing the case.

– prepared by Soha Kala of NewsGram. Twitter @SohaKala

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Gorkhaland: SC allows withdrawl of Central Forces from Darjeeling

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The Supreme Court of India
The Supreme Court of India. Wikimedia

New Delhi, October 27: The Supreme Court on Friday allowed the Centre to withdraw seven companies of central paramilitary forces from trouble-torn Darjeeling and Kalimpong districts of West Bengal where the agitation for Gorkhaland, a separate state for Gorkhas took a violent turn.

A bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud directed the Centre to withdraw the seven companies of Central Armed Paramilitary Forces (CAPF) for being used for election duties in Himachal Pradesh and Gujarat.

The bench also sought a response from the West Bengal government on the Centre’s appeal against the High Court’s order putting on hold its decision to withdraw 10 of the 15 companies of the central paramilitary forces deployed in the hill district.

The apex court also stayed the pending proceedings before the High Court and said that it will deal with the case in a holistic manner and posted the appeal of the Centre for further hearing on November 27.

In an interim order, the High Court had stayed the withdrawal of CAPF from the Darjeeling hills till October 27 after the state government approached it against the Centre’s decision.(IANS)

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Supreme Court Bans Pet Coke and Furnace Oil to bring down Air Pollution in NCR

India tops the list of biggest consumers of pet coke globally, which emits 11 per cent more greenhouse gases than coal. Consequently, India also records the highest number of deaths with pollution as its main cause

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Supreme Court
Industries employing pet coke and furnace oil emit large amounts of sulphur oxide and nitrogen oxide that can penetrate deep into the lungs and cause respiratory problems. Pixabay

New Delhi, October 25, 2017 : Environmental issues have been on the Supreme Court’s radar lately. After the crackers-ban on Diwali, the Supreme Court on Tuesday banned the use of two cheap but extremely polluting industrial fuels in and around New Delhi in an attempt to clean the air in the national capital region (NCR).

The Supreme Court banned the use of petroleum coke which is a dirtier alternative to coal, and furnace oil and has directed three states namely Haryana, Uttar Pradesh and Rajasthan to notify the ban on immediate basis. The decision came after the Court was informed about the soaring pollution levels in NCR following Diwali due to toxic gas emissions by industries that rely heavily on petroleum coke (commonly called pet coke) and furnace oil.

However, this was not the first time that the two pollutants were banned.

Previously, the hazardous fuels had been banned in Delhi in 1996. However, despite court restrictions, their use continued in the NCR in brick kilns, cement factories, ceramics manufacturers and paper mills.

The new order comes after a government-appointed body, the Environment Pollution (Prevention and Control) Authority (EPCA) found high sulphur levels and recommended banning the two fuels to the court in April.

ALSO READ Was the Ban on Sale of Firecrackers in Delhi Successful? Data on Pollution Levels in Delhi Say Otherwise

On Tuesday, a Supreme Court bench headed by Justice MB Lokur ordered for the ban to come into effect naturally from November 1 in case the government failed to notify the prohibit.

Why Did The Supreme Court Ban Pet Coke and Furnace Oil?

India tops the list of biggest consumers of pet coke globally, which emits 11 per cent more greenhouse gases than coal. Consequently, India also records the highest number of deaths with pollution as its main cause with 2.5 million Indians facing earth deaths in 2015, as per data by The Lancet Commission on Pollution and Health

For an easier comparison, petrol and diesel comprise of 50 PPM (parts per million) of the extremely dangerous sulphur.

On the other hand, pet coke has 69,000-74,000 PPM and furnace oil has 15,000- 23,000 ppm sulphur in its composition.

Industries employing these two fuels emit large amounts of sulphur oxide and nitrogen oxide that can penetrate deep into the lungs and cause respiratory problems like asthma, and bronchitis.

Burning of pet coke also releases sulphur dioxide which is a known cause of several lung diseases and acid rain.

How Will The Ban Affect Industries?

The ban on pet coke and furnace oil is believed to imply heavy losses to the industries using these fuels; the worst hit will be numerous small and medium sized industries that employ thousands of workers.

“Furnace oil is used in estimated
50-60% industries. As an alternate,
we can use CNG but it will cost us
nearly 2-3 times more”
– Dinesh Mittal,
                                     President of Sahibabad Industrial Area, Site-IV, (as told to Hindustan Times)

Pet coke is known to deliver more per-unit energy in comparison to coal, and is also readily and cheaply available which is why small-sized industries depend heavily on them. The low costs make it an attractive offer for the buyers. Banning the fuels may further restrict their ability to expand operations and hire more staff.

The Central Pollution Control Board had submitted a draft on stipulated norms in June which only received attention and was uploaded on the ministry website in October.  The furious Supreme Court also pulled up on the Centre for being insensitive and for “sitting and doing nothing” about the growing pollution levels in the NCR.

The Supreme Court has now ordered for the governments of  Rajasthan, Haryana and Uttar Pradesh to notify the ban and complete the exercise by December 31.