M/S Vaishali Flour Mills vs The State Of Bihar And Anr
2021 Latest Caselaw 5665 Patna

          IN THE HIGH COURT OF JUDICATURE AT PATNA
                   Civil Writ Jurisdiction Case No.4662 of 2010
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M/S Vaishali Flour Mills, a Partnership Firm having its place of business at

Dighaghat, Danaour through one of its Partners, Sunil Kumar Agrawal, S/o

Shri Ram Sharan Agrawal, R/O 176, Patliputra Colony, P.S.- Patliputra,

Distt.- Patna

... ... Petitioner/s Versus

1. The State of Bihar through the Principal Secretary cum Commissioner of

Commercial Taxes, Bihar, Vikash Bhawan, Bailey Road, Patna

2. The Assistant Commissioner Of Commercial Taxes In-Charge, Danapur

Circle, Danapur

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : Mr. S.D.Sanjay, Sr. Advocate Mr. Mohit Agarwal, Advocate Ms. Priya Gupta, Advocate Mr. Gopal Prasad Gupta, Advocate Mr. Gautam Kejriwal, Advocate

For the Respondent/s : Mr. Vikash Kumar, SC 11 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

Date : 30-11-2021

The petitioner has prayed for the following relief(s):-

"(i) For a declaration that the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein (Amendment & Validation) Act, Patna High Court CWJC No.4662 of 2010 dt.30-11-2021

2008 (Act No.:13/2008 dt. 15.04.2008) being enforced with retrospective effect from 29.8.2006 as ultravires Articles 14, 19(1)(g), 246, 301 & 304 of the Constitution of India;

(ii) For a declaration that the name of Entry-tax on any of the Scheduled Commodities to the extent exceeding the Rate of Bihar VAT is discriminatory, and the Notification- S O No.: 38 dt. 1.04.2008 & S O No.:95 dt. 31.07.2008 prescribing the rate even on Wheat being 4 % against the Rate of Bihar VAT on Wheat being 1% is liable to be declared to be ultravires;

(iii) For a declaration that in absence of any Notification for any Scheduled Commodity under the Bihar Entry Tax Act, 1993 during the period 29.08.2006 till 19.04.2007 and any rate of Entry Tax prescribed on any commodity for the period 29.08.2006 till 1.04.2008, no authority had any jurisdiction to impose & realize any Entry Tax on any Commodity as the provisions of the Act was not workable;

(iv) For quashing of the Order dt. 16.12.2009 passed by the Respondent-ACCT, Danapur Circle, Danapur by which he has been pleased to impose Entry Tax and also Penalty against the Petitioner for the period 29.08.2006 to 31.03.2007 as being wholly without jurisdiction, illegal, and not sustainable in the eyes of law, and as such, liable to he quashed;

(v) For a declaration that the goods imported from outside the State and having been sold in course of Interstate Trade cannot be subjected to Entry Patna High Court CWJC No.4662 of 2010 dt.30-11-2021

Tax as the Scheduled Goods cannot be said to have been either consumed, used or sold in the local area for consumption & use in the local area; &

(vi) For restraining the Respondents from enforcing the demand of Entry Tax & Interest totaling to Rs. 41,84,578/- (Entry Tax Rs. 28,33,404/- & Interest Amount Rs. 14,40,213/- from the Petitioner as the same is wholly illegal, and without jurisdiction; and for any other relief(s) for which the Petitioner may legally be found entitled to in the facts & circumstances of the present case."

Inadvertently, the order, which was required to be

passed in another matter, was passed in the present matter.

The present petition was to be disposed of in the light

of order passed in CWJC No. 18122 of 2008, titled as M/s

Manokamna Food Products, Raxaul Vs. The State of Bihar

& Ors. As such, order dated 18.11.2021 is recalled and the

present petition is disposed of in terms of order passed in CWJC

No. 18122 of 2008 (supra), which is reproduced as under:-

"Heard learned counsel for the parties. The petitioner has prayed for the following relief/s :-

"i) For a declaration that the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein [Amendment & Validation] Act, 2008 [Act No. :13/2008 dt. 15.04.2008] Patna High Court CWJC No.4662 of 2010 dt.30-11-2021

[Annexure-10] being enforced with retrospective effect from 29.08.2006 as ultravires Articles 14, 19(1) (g), 246, 301 & 304 of the Constitution of India;

ii) For a declaration that the rate of Entry-tax on any of the Scheduled Commodities to the extent exceeding the Rate of Bihar VAT is discriminatory and the Notification -S O No.95 dt. 31.07.2008 prescribing the rate on wheat being 4 % against the Rate of Wheat under the Bihar VAT being 1% is liable to tbe declared to be ultravires;

iii) For quashing of the Notification- SO No.95 dt. 31.07.2008 [Annexure-11] issued u/s 3(1) of the Bihar Tax on Entries of Goods into the Local Areas for consumption, use or sale therein Act, 1993, and being enforced with retrospective effect from 01.04.2008, by which rates of entry tax have been fixed for the scheduled goods from 2% to 16% on their entry into a local area for consumption, use or sale therein for the purported purpose of development of trade, commerce and industries in the State.

iv) For issuance of an appropriate writ(s) or order(s) or direction (s) to the respondents for restraining them from making any demand of entry tax from the Petitioner pursuant to the notice of demand dt. 20.09.2007.

v) For issuance of an appropriate writ(s) or order(s) or direction(s) to the respondents for restraining them from making any demand of entry tax from the Petitioner on the import of Wheat in the local areas of the State of Bihar; and for any other relief(s) for which the Petitioner may legally be found entitled to in the facts & circumstances of the present case."

The dispute primarily pertains to the period of six months, i.e., October, 2006 to March, 2007.

In our considered view, the matter can be put to rest in view of the order dated 29th of August, 2017 passed by Hon'ble the Apex Court in Civil Appeal No(s).1179/2017 (arising out of SLP (C) No.10694 of 2007 titled as State of Bihar Vs. The Food Patna High Court CWJC No.4662 of 2010 dt.30-11-2021

Corporation of India, which is reproduced hereinunder, in toto :-

"Leaved granted.

A perusal of the judgment of the High Court indicates that it has allowed the writ petition of the respondent/assessee herein on two grounds, which are as under :

1) the tax was non-discriminatory in nature and violative of the provisions of Article 304 (b) of the Constitution of India inasmuch as previous sanction of the President of India was not taken; and

2) vide Notification No. SO 34 dated 01.04.2006, paddy, rice, wheat, pulses, flour, atta, maida, suji and besan were added at Serial No. 25 of the Schedule and on the same date vide another Notification bearing No. SO 32, in exercise of the power under Section 3(1) of the Bihar Entry Tax the rate of entry tax on paddy, rice, wheat was fixed at 4% of their value. As on that date sales tax on paddy, rice, wheat was 1%.

On that basis, the High Court held that the aforesaid SO 32 is discriminatory in nature.

Insofar as the finding of the High Court that the Act is violative of provisions of Article 304(b) of the Constitution is concerned, the same stands overruled by a Nine Judge Bench judgment of this Court in the case of Jindal Stainless Steel vs. State of Haryana reported in 2016(11) SCALE 1. To this extent the judgment of the High Court is set aside.

Insofar as the second issue holding SO 32 dated 01.04.2006 in respect of paddy, rice and wheat for the period 01.04.2006 to 30.06.2006 as discriminatory is concerned, we do not find any error. The findings on issue no. 2 are accordingly upheld. The appeal is accordingly allowed."

Noticeably, a coordinate Bench of this Court vide judgement dated 24th of January, 2007 rendered in CWJC No. 11787 of 2006, titled as Food Corporation of India Vs. The State of Bihar & Ors., had struck down the action initiated by the Patna High Court CWJC No.4662 of 2010 dt.30-11-2021

respondent, in recovering the amount in excess of the rate fixed under the Bihar Value Added Tax Act, 2005.

As such, the petition is allowed. The Respondents cannot charge and petitioner is not liable to pay any amount in excess of what stands ordered by this Court as affirmed by Hon'ble the Apex Court.

Interlocutory Application(s), if any, stands disposed of."

Ordered accordingly.

(Sanjay Karol, CJ)

( S. Kumar, J) Sujit/-

AFR/NAFR
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Uploading Date          02.12.2021
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