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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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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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India Gets A Win, Supreme Court Decriminalizes Homosexuality

In December 2013, a Supreme Court bench said that it was for the legislature to look into desirability of deleting section 377 of IPC.

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Homosexuality, India
SC decriminalises homosexuality, victory for gay rights. Pixabay

 In a historic verdict, the Supreme Court on Thursday decriminalised homosexuality between consenting adults by declaring Section 377, the penal provision which criminalised gay sex, as “manifestly arbitrary”.

In separate but unanimous verdicts, a five-judge Constitution Bench of Chief Justice Dipak Misra, Justice Rohinton Nariman, Justice A.M. Khanwilkar, Justice D.Y. Chandrachud and Justice Indu Malhotra partially struck down Section 377 of the Indian Penal Code (IPC) as unconstitutional.

The bench said it is no longer an offence for LGBTIQ (lesbian, gay, bisexual, transgender/transsexual, intersex and queer/questioning) community to engage in consensual sex between two adults in private.

Reading out the judgment, Chief Justice Misra said attitudes and mentality have to change to accept others’ identity and accept what they are, and not what they should be.

Homosexuality, India
LGBTIQ people have a right to live unshackled from the shadow.
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“It is the constitutional and not social morality which will prevail,” said the court.

The verdict sparked celebrations in the LGBTIQ community across India even as the judgment was being read out. Many of the community members who had assembled outside the apex court jumped in joy and distributed sweets.

Chief Justice Misra said consensual sex between adults in a private space, which is not harmful to women or children, cannot be denied as it is a matter of individual choice.

Section 377 will not apply to consensual same-sex acts between homosexuals, heterosexuals, lesbians, the court said, clarifying that sexual act without consent and bestiality will continue to be an offence under section 377.

“An individual has full liberty over his or her body and his or her sexual orientation is a matter of one’s choice,” said the Chief Justice.

“Time to bid adieu to prejudicial perceptions deeply ingrained in social mindset. Time to empower LGBTIQ community against discrimination. They should be allowed to make their choices,” he added.

Homosexuality, India
In separate but unanimous verdicts, a five-judge Constitution Bench struck down Section 377 of the Indian Penal Code (IPC) as unconstitutional. Pixabay

 

In a concurring judgement, Justice Nariman said homosexuality is “not a mental disorder or disease”.

He said the LGBTIQ community has an equal right to live with dignity and are entitled to equal protection of law. He directed the Centre to give wide publicity to this judgment to remove the stigma attached to homosexuality.

Justice Chandrachud said to deny the LGBTIQ community their right to sexual orientation is a denial of their citizenship and a violation of their privacy.

“They cannot be pushed into obscurity by an oppressive colonial legislation… Sexual minorities in India have lived in fear, hiding as second class citizens,” said Justice Chandrachud, adding “the state has no business to intrude on such matters”.

Justice Indu Malhotra said that history owes an apology to the LGBTIQ community for all that they have suffered on account of the ignorance of the majority about homosexuality.

“LGBTIQ people have a right to live unshackled from the shadow,” she said.

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The Supreme Court verdict, which overruled its own earlier judgment, assumes significance as in the earlier round of litigation in 2013, the top court had reversed a Delhi High Court ruling decriminalising homosexuality.

The Delhi High Court bench, headed by then Chief Justice A.P. Shah, had in July 2009 legalised homosexual acts between consenting adults by overturning the 149-year-old law — finding it unconstitutional and a hurdle in the fight against HIV/AIDS.

In December 2013, a Supreme Court bench comprising Justice G.S. Singhvi and Justice S.J. Mukhopadhaya in the Suresh Kumar Koushal and another vs Naz Foundation and others case, had set aside the high court’s judgment and said that it was for the legislature to look into desirability of deleting section 377 of IPC.

The matter was subsequently resurrected in July 2016, when a fresh petition was filed by members of the LGBTIQ community — dancer N.S. Johar, journalist Sunil Mehra, chef Ritu Dalmia, hotelier Aman Nath and business executive Ayesha Kapur — which was then marked to the Constitution Bench by a Division Bench.

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The reference was made on the basis of submission that it was the first time that individuals directly affected by the provision were approaching the court.

Among the petitioners are a batch of current and former students of Indian Institutes of Technology. Claiming to represent more than 350 LGBTIQ alumni, students, staff and faculty from the IITs, the petitioners said that the existence of Section 377 had caused them “mental trauma and illnesses, such as clinical depression and anxiety and relegated some of them to second-class citizenship”. (IANS)