Entry tax on notified yarn upheld for registered dealers importing yarn into Punjab under section 3A framework.

Section 3A of the Punjab Tax on Entry of Goods into Local Areas Act, 2000 enabled entry tax on goods specifically notified by the Government, even where such goods were also taxable under the Punjab General Sales Tax Act, 1948, and the limitation in section 3(5) did not apply. The notification dated 1 October 2002 expressly covered yarn of all kinds, making the levy applicable to all importers, including registered dealers bringing yarn into Punjab from outside the State. On that basis, tax at 4 per cent was leviable on the yarn imported by the registered dealer, and the challenge to the levy failed.

---

---

Issues: Whether tax under the Punjab Tax on Entry of Goods into Local Areas Act, 2000 was leviable on yarn brought into the State by a registered dealer, in view of section 3A introduced by Punjab Ordinance No. 4 of 2002 and the notification dated October 1, 2002 specifying yarn of all kinds.

Analysis: The petitioner's principal contention was that yarn was not listed in the Schedule to the Act and, therefore, no entry tax could be levied on its import into the State. Section 3A, introduced by Punjab Ordinance No. 4 of 2002, however, provided that tax could be levied on such goods as may be specified by the Government by notification in the Official Gazette, even if tax was payable on those goods under the Punjab General Sales Tax Act, 1948, and the restrictions in section 3(5) would not apply. The notification dated October 1, 2002 expressly specified "yarn of all kinds" and made the levy applicable to all importers, including a dealer registered under the Punjab General Sales Tax Act, 1948. The Court held that the petitioner, though not an importer within the Schedule-based definition, was a registered dealer bringing yarn from outside the State and therefore fell within the scope of the notification read with section 3A.

Conclusion: Tax at the rate of 4 per cent was leviable on yarn brought into the State of Punjab by a registered dealer, and the challenge to the levy failed.

---