HC strikes down law levying entry tax on scheduled goods

Chennai, Mar 22 (UNI) Madras High Court (HC) today struck down a 2001 law empowering the state to levy entry tax on scheduled goods like washing machine, air conditioners, refrigerator and cigarettes.

A Division Bench comprising Chief Justice A P Shah and Justice K Chandru said 'it is seen from the chart that the importer of goods from outside the state is clearly put to disadvantage as compared to a local manufacturer or producer'.

The Judges noted that the set-off under Section four of the Act was not available for entry tax paid on items used as input raw material.

'We have therefore no hesitation in holding that the levy of entry tax under the impunged act is violative of clause (a) of Article 304 of the Constitution'.

The levy of entry tax on goods brought from other states and abroad to Tamil Nadu was not compensatory as the state government could not place material before the court to show that levy of entry tax was reimbursement for benefit provided or to be provided to tax payers, the Judges held.

UNI