Entry tax on goods moved between separate local areas within one factory premises upheld despite common industrial establishment.

Entry tax was held to apply when limestone was moved from a mine area into a separate plant area, even though both sites lay within the same factory premises. The decisive factor was whether goods were brought from one local area into another, not whether the source and destination formed part of one industrial establishment. The Court also held that the entire factory could not be treated as a single local area merely because the sites were connected within the same premises. The reference was answered in favour of the Revenue, and the assessee's challenge to entry tax liability failed.

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Issues: (i) Whether limestone extracted from the assessee's own mine situated in a different local area but within the factory premises was liable to entry tax when transported to the plant. (ii) Whether the entire factory area could be treated as one local area for the purposes of section 2(d) of the Entry Tax Act.

Issue (i): Whether limestone extracted from the assessee's own mine situated in a different local area but within the factory premises was liable to entry tax when transported to the plant.

Analysis: Entry tax was attracted when the mining operation and the place where the goods were brought into another local area were in fact distinct local areas. The circumstance that both the mine and the plant fell within the same factory premises did not determine liability. Since the limestone was extracted from one local area and transported to another for use in manufacture, the statutory incidence of entry tax applied.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the entire factory area could be treated as one local area for the purposes of section 2(d) of the Entry Tax Act.

Analysis: The statutory concept of local area depended on the territorial locality into which goods were brought, and not merely on the fact that different sites formed part of the same factory establishment. The mine area and the plant area, though within the same factory premises, remained separate local areas for the purpose of the levy.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered in favour of the Revenue, and the assessee's challenge to the entry tax liability failed.

Ratio Decidendi: For entry tax, the decisive factor is whether goods are brought from one local area into another local area, and the fact that the source and destination lie within the same factory premises does not by itself prevent the levy.

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