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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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Yahoo Calls Ayodhya Verdict “Event Of The Decade”

Political heavyweights Finance Minister Nirmala Sitharaman, Banerjee and Union Minister Smriti Irani were India's "Top 3 Most Powerful Women in 2019"

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Yahoo
Every year Yahoo publishes the list of top newsmakers and happenings that catches the interest of Internet users in the country in the "Year in Review for India" report. Pixabay

The Ayodhya verdict was named the “Event of the Decade” while the five Supreme Court judges behind the verdict were named as the “Personality of the Year 2019” by search engine major Yahoo India on Monday.

The SC Bench — comprising Chief Justice Ranjan Gogoi, Justice Sharad Arvind Bobde, Justice D.Y. Chandrachud, Justice Ashok Bhushan and Justice S. Abdul Nazeer — laid to rest the century-old dispute and emerged as YIR’s “Personality of the Year.”

Every year Yahoo publishes the list of top newsmakers and happenings that catches the interest of Internet users in the country in the “Year in Review for India” report.

The abrogation of Article 370 came in at the second spot with the decriminalisation of Article 377 and India’s 2011 World Cup win also making it to the “Top Indian Events of the Decade”.

The Nirbhaya rape case found a place on the list. This year also marked the end of a decade where India discovered its love for the Internet and the smartphone, thus, earning the telecom/smartphone revolution a place on this list.

On the back of a landslide victory in the Indian general elections, Prime Minister Narendra Modi was 2019’s “Most Searched Personality” which he also held in 2018.

Yahoo
The Ayodhya verdict was named the “Event of the Decade” while the five Supreme Court judges behind the verdict were named as the “Personality of the Year 2019” by search engine major Yahoo India on Monday. IANS

Cricketer M.S. Dhoni and actor Priyanka Chopra Jonas joined Modi on this list along with a surprise entrant — Wing Commander Abhinandan Varthaman.

Modi topped the list of “Most Searched Politicians of 2019” with Chief Minister of West Bengal Mamata Banerjee claiming the second spot, edging out Congress leader Rahul Gandhi, who had to settle for the third position.

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Political heavyweights Finance Minister Nirmala Sitharaman, Banerjee and Union Minister Smriti Irani were India’s “Top 3 Most Powerful Women in 2019”.

Sports champions Harmanpreet Kaur and P.V. Sindhu also found a place on the list, with filmmaker Zoya Akhtar, whose film Gully Boy is headed for the Oscars, rounding off the top 10. (IANS)