Entry Tax | Indian Made Foreign Liquor Not Taxable Under UP Entry Of Goods Into Local Area Act 2007: Allahabad High Court
The Allahabad High Court has recently quashed assessment order taxing Indian Made Foreign Liquor under the UP Entry of goods into Local Area Act 2007 on grounds that it is not provided in the schedule to the Act.Provisional assessment order against the petitioner was passed on 19.04.2006 under Section 4-A (Realization Of Tax Through Manufacturer) of the Uttar Pradesh Entry of Goods into...
The Allahabad High Court has recently quashed assessment order taxing Indian Made Foreign Liquor under the UP Entry of goods into Local Area Act 2007 on grounds that it is not provided in the schedule to the Act.
Provisional assessment order against the petitioner was passed on 19.04.2006 under Section 4-A (Realization Of Tax Through Manufacturer) of the Uttar Pradesh Entry of Goods into Local Area Tax Act, 2000 read with Rule 41(5) of the Uttar Pradesh Sales Tax Rule 2000. Final assessment order was passed on 30.03.2008 under the UP Entry of goods into Local Area Act 2007.
Counsel for petitioner submitted that the Act of 2000 was declared ultra vires by the High Court against which appeal is pending before the Supreme Court. It was submitted that Section 1(3) of the Act of 2007 provides that the Act of 2007 shall be deemed to be in force from 01.11.1999.
Assessment of the petitioner having been done under Act of 2007, it was argued that no tax was leviable on Indian Made Foreign Liquor under the Act of 2007 as it was not provided in the schedule of taxable items.
The Court held that since Indian Made Foreign Liquor was not provided in the schedule of taxable goods under the Act of 2007, authorities had no jurisdiction to impose tax on it.
“It is to be noted that if the goods in question are not in the schedule of the New Act, the authorities had no jurisdiction whatsoever to impose entry tax on the same. This question is going to the very root of the matter and the authority should have considered and answered the same,” held Justice Shekhar B. Saraf.
The Court observed that no reasons were provided for taxing Indian Made Foreign Liquor under the Act of 2007 when it was not provided in the schedule of taxable goods.
Accordingly, the order passed by the Appellate Authority was set aside. The Court directed the authority concerned to provide an opportunity of hearing to the petitioner and then pass a reasoned order regarding imposition of tax on goods not covered under the Act 2007.
Case Title: M/S United Spirits Limited v. State Of U.P. And 3 Others [WRIT TAX No. - 619 of 2023]