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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CWP-16684-2002 (O&M)
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
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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
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CWP-16684-2002 (O&M)
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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