Entry tax on machinery for factory installation fails where statutory use conditions are unmet; octroi exemption cannot create promissory estoppel.

Entry tax under section 3(1)(b) was not leviable on plant and machinery brought into a local area for installation in an existing factory, because the statutory purposes for Schedule III goods-such as consumption, use as raw material, incidental goods, packing material, execution of works contracts, or sale-were not met. The assessee's plea of promissory estoppel also failed, because an octroi exemption relates to a different levy and cannot automatically bar entry tax, which is imposed under separate law and conditions. The reference was answered by holding that entry tax was not payable on the machinery, but the octroi exemption could not defeat the entry tax levy.

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Issues: (i) whether entry of plant and machinery into the local area for installation in the assessee's factory attracted entry tax under section 3(1)(b) of the Entry Tax Act, 1976; (ii) whether an exemption from octroi could found a plea of promissory estoppel against levy of entry tax.

Issue (i): Whether entry of plant and machinery into the local area for installation in the assessee's factory attracted entry tax under section 3(1)(b) of the Entry Tax Act, 1976.

Analysis: Plant and machinery were brought into the local area for installation in the existing factory for manufacture of straw-board. The provision taxing goods in Schedule III applied only where the entry was for consumption or use as raw material, incidental goods, packing material, or in execution of works contracts, and not for sale. The machinery was not brought for any of those purposes. The statutory condition for levy was therefore not satisfied.

Conclusion: The levy of entry tax on plant and machinery was not justified and this issue was answered in favour of the assessee.

Issue (ii): Whether an exemption from octroi could found a plea of promissory estoppel against levy of entry tax.

Analysis: The exemption relied upon related only to octroi on import of specified materials. Octroi and entry tax are distinct levies imposed under different laws and subject to different conditions. An assurance or exemption concerning octroi could not be extended to entry tax.

Conclusion: The doctrine of promissory estoppel did not apply, and this issue was answered in favour of the Revenue.

Final Conclusion: The reference was answered by holding that entry tax was not payable on the plant and machinery, but the assessee could not rely on promissory estoppel to defeat the levy of entry tax.

Ratio Decidendi: Entry tax on goods in Schedule III is leviable only when the entry is for the specific statutory purposes stated in section 3(1)(b), and an exemption from octroi does not, by itself, preclude levy of a separate tax such as entry tax.

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