Entry tax cannot be levied on vehicles imported from abroad when the statute is confined to goods entering from outside the State.

The Kerala High Court construed the Kerala Tax on Entry of Goods into Local Areas Act, 1994 as applying only to goods entering local areas from outside the State for use or sale therein, and not to motor vehicles imported into India from abroad. The charging provision, definition of importer, and method of computing purchase value showed a legislative scheme confined to inter-State entry, while customs duty and import charges were outside the tax base. On that construction, foreign-imported vehicles were not liable to entry tax, and registration could not be conditioned on clearance certificates under the Act.

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Issues: Whether motor vehicles imported from abroad could be subjected to entry tax under the Kerala Tax on Entry of Goods into Local Areas Act, 1994.

Analysis: The Act levied tax on the entry of goods into local areas from places outside the State, and its definition of "entry of goods into a local area" was confined to goods entering from outside the State for use or sale therein. The charging provision, the definition of "importer", and the method of computing purchase value all showed that the legislative scheme was directed to goods brought from outside Kerala and did not contemplate goods entering India from abroad. Customs duty and other import charges were not part of the purchase value for the Act, and the Court read the statute in the light of its language, object, preamble, and Statement of Objects and Reasons. On that construction, the Act did not apply to vehicles imported from foreign countries. The challenge based on the exemption provision was not separately decided, as the conclusion on inapplicability of the Act itself was sufficient.

Conclusion: Vehicles brought from abroad were held not liable to entry tax under the Act, and the appellants were entitled to registration without insistence on clearance certificates under that Act.

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