Entry tax recovery without prior demand upheld where the tax became payable immediately on entry and adjustment affected only sales tax liability.

Entry tax under the Bihar entry tax framework was treated as payable immediately on entry of scheduled goods into the local area, and recovery could proceed without a prior notice of demand under the Bihar Finance Act or a formal assessment order. The court read the recovery machinery of the Finance Act mutatis mutandis, but confined the prior demand requirement to ordinary sales tax recovery, not entry tax defaults. The statutory adjustment mechanism against sales tax liability did not extinguish the initial obligation to pay entry tax; it operated only after entry tax had been paid and affected only the ultimate sales tax liability. The writ petitions therefore failed.

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Issues: (i) whether notice of demand under section 25 of the Bihar Finance Act, 1981 was a condition precedent for recovery of entry tax under section 27 of that Act, (ii) whether entry tax could be recovered without a formal assessment order, and (iii) whether the statutory adjustment of entry tax against sales tax liability exempted the importer from paying entry tax.

Issue (i): whether notice of demand under section 25 of the Bihar Finance Act, 1981 was a condition precedent for recovery of entry tax under section 27 of that Act

Analysis: Section 27, when applied to entry tax through section 8 of the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993, had to be read with necessary changes because the entry tax scheme required payment at the point of entry of scheduled goods into the local area. The provisions of the Finance Act were adopted mutatis mutandis, and the requirement of a prior notice of demand under section 25 was confined to recovery of sales tax in the ordinary course. For entry tax, failure to pay at entry itself enabled immediate recovery action.

Conclusion: The objection was rejected and recovery under section 27 was held to be maintainable without prior notice of demand under section 25.

Issue (ii): whether entry tax could be recovered without a formal assessment order

Analysis: The charging provision of the Entry Tax Act levied tax on entry of scheduled goods into local areas, and the tax was payable immediately on entry on the basis of import value. The returns contemplated by the Rules were additional and did not postpone the primary obligation to pay at entry. The Court treated assessment in the ordinary sales tax sense as unnecessary for the initial levy and held that a defaulter could be proceeded against straightaway when tax was not paid at the point of entry.

Conclusion: The absence of a formal assessment order did not bar recovery of the entry tax dues.

Issue (iii): whether the statutory adjustment of entry tax against sales tax liability exempted the importer from paying entry tax

Analysis: Section 4 provided only for reduction of sales tax liability to the extent of entry tax paid; it did not extinguish the liability to pay entry tax in the first instance. The adjustment mechanism operated only after payment of entry tax and, if applicable, sale of the imported vehicle. The importer's obligation under section 3 remained mandatory.

Conclusion: The adjustment provision did not relieve the petitioner of the duty to pay entry tax.

Final Conclusion: The writ petitions failed because the demand for entry tax was lawfully recoverable, the procedural objections were untenable, and the adjustment clause did not negate the initial tax liability.

Ratio Decidendi: Where a statute levies entry tax on the act of entry itself and incorporates recovery machinery from another enactment mutatis mutandis, the tax becomes immediately payable at entry and may be recovered without a prior notice of demand or formal assessment, while any later adjustment mechanism affects only the ultimate sales tax liability and not the primary obligation to pay entry tax.

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