Punjab-Haryana High Court
M/S Northern Minerals Ltd vs State Of Haryana And Ors on 14 March, 2024
Author: Sanjeev Prakash Sharma
Bench: Sanjeev Prakash Sharma
Neutral Citation No:=2024:PHHC:032279-DB
{2024:PHHC:032279-DB}
205 (2 cases)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP-16658-2002 (O&M)
Date of Decision: 14.03.2024
M/S NORTHERN MINERALS LTD. ........Petitioner
V/s.
STATE OF HARYANA AND ANOTHER ........Respondents
CWP-16684-2002 (O&M)
M/S DHANUKA PESTICIDES LTD. ........Petitioner
V/s.
STATE OF HARYANA AND ANOTHER ........Respondents
CORAM: HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
HON'BLE MRS. JUSTICE SUDEEPTI SHARMA
Present: None for the petitioner(s).
Mr. Sharan Sethi, DAG, Haryana.
***
SANJEEV PRAKASH SHARMA, J. (Oral)
1. This order shall dispose of two connected Writ Petitions as the issue involved in both the Writ Petitions is common.
2. In these Writ Petitions challenge has been made to the vires of the Haryana Local Area Development Tax Act, 2000 (hereinafter referred to as "the Act") on the ground that the same is ultra vires to the Articles 301, 304(b), 276, 286, 19(g), 254 and 14 of the Constitution of India whereby it seeks to levy tax on the entry of goods in the Local Area for use or consumption.
3. The issue raised in these Writ Petitions is para materia to the issue raised by the petitioners in relation to the Punjab Tax on Entry of Goods into Local Areas Act, 2000.
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4. The issue initially was being taken up by the Division Bench of this Court in CWP No.15378 of 2008 titled as Bhushan Power and Steel Ltd. Vs. The State of Punjab and Others and the Supreme Court had referred to the larger Bench in Jindal Stainless Ltd. and Another Vs. State of Haryana and Others; (2010) 4 SCC 595. However, a Nine-Judges Constitution Bench of the Hon'ble Supreme Court in Jindal Stainless Ltd. and Another Vs. State of Haryana and Others ; (2016) 11 Scale 1 has laid down as under:-
"1. Taxes simpliciter are not within the contemplation of Part XIII of the Constitution of India. The word 'Free' used in Article 301 does not mean "free from taxation".
2. Only such taxes as 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.
3. Clauses (a) and (b) of Article 304 have to be read disjunctively.
4. A levy that violates 304(a) cannot be saved even if the procedure under Article 304(b) or the proviso there under is satisfied.
5. The compensatory tax theory evolved in Automobile Transport case and subsequently modified in Jindal's case has no juristic basis and is therefore rejected.
6. Decisions of this Court in Atiabari, Automobile Transport and Jindal cases (supra) and all other judgments that follow these pronouncements are to be extent of such reliance over ruled.
7. 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.
8. 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 2 of 4 ::: Downloaded on - 21-03-2024 20:33:03 ::: Neutral Citation No:=2024:PHHC:032279-DB {2024:PHHC:032279-DB} CWP-16658-2002 (O&M) and CWP-16684-2002 (O&M) Page 3 of 4 non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a). The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters.
9. 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. The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters.
10. The questions 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 are left open to the determined in appropriate proceedings."
5. Thus, the vires stand answered in the negative by the Hon'ble Supreme Court and provisions of the Act stand upheld. However, the Supreme Court in its subsequent order passed on 21.03.2017 in relation to Haryana matters, has observed that the concerned appellants before the apex Court would be entitled to file fresh petition in a time bound manner and raise their respective issues afresh with the necessary factual background besides raising any constitutional or statutory issue which may arise for consideration.
6. Keeping in view the said observations, this Court in CWP-5537-2008 titled as Steel Furnace Association of India and Another Vs. State of Punjab and Another decided on 18.12.2017 disposed of the petition in following terms:-
"10. Consequently, these writ petitions are disposed of without expressing any views on merits of the new grounds sought to be raised 3 of 4 ::: Downloaded on - 21-03-2024 20:33:03 ::: Neutral Citation No:=2024:PHHC:032279-DB {2024:PHHC:032279-DB} CWP-16658-2002 (O&M) and CWP-16684-2002 (O&M) Page 4 of 4 by the writ petitioners orally or through amended writ petitions with liberty to them to file fresh petitions on the grounds as may be available in accordance with law."
7. In another Writ Petition bearing No.CWP-3417-2013, titled as M/s Rajinder and Co. and Others Vs. State of Punjab and Others, the Coordinate Bench of this Court followed the aforesaid order while deciding the same on 09.01.2024.
8. In view of the aforesaid, present Writ Petitions, accordingly stand dismissed to the extent of the challenge to the vires. However, if the petitioners have any individual grievance keeping in view observations of the apex Court, they would always be at liberty to take up the same before the appropriate proceedings.
9. All pending applications in these Appeals shall stand disposed of accordingly.
[SANJEEV PRAKASH SHARMA]
JUDGE
March 14, 2024 [SUDEEPTI SHARMA]
Ess Kay JUDGE
Whether speaking / reasoned : Yes / No
Whether Reportable : Yes / No
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