Entry tax delegation upheld where statute supplied policy, capped discretion, and notification served public interest without trade barrier.

Section 4-A of the Madhya Pradesh Entry Tax Act was upheld because it supplied a clear policy for notifying local areas and specified goods, and it limited executive discretion by a ten per cent ceiling, so it was not treated as unguided or arbitrary under article 14. The enhanced entry tax notification on diesel, furnace oil and hexane imported from outside the State was also upheld because it operated within the entry tax framework, was justified on revenue protection and prevention of misuse, and was not found to impose an impermissible trade restriction or unconstitutional discrimination under articles 19(1)(g), 301, 303 and 304.

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Issues: (i) Whether section 4-A of the Madhya Pradesh Entry Tax Act was unconstitutional for want of guidance and as conferring arbitrary delegated power in violation of article 14 of the Constitution of India. (ii) Whether the notification enhancing entry tax on diesel, furnace oil and hexane imported from outside the State was invalid as violative of articles 19(1)(g), 301, 303 and 304 of the Constitution of India.

Issue (i): Whether section 4-A of the Madhya Pradesh Entry Tax Act was unconstitutional for want of guidance and as conferring arbitrary delegated power in violation of article 14 of the Constitution of India.

Analysis: Section 4-A authorises the State Government to notify specified local areas and goods used or consumed mainly for manufacture and to levy entry tax up to a prescribed ceiling of ten per cent. The provision was read as containing an intelligible policy, namely, regulation of entry tax in relation to local area development and specified goods, with a statutory maximum limit. The Court held that the provision was not unguided merely because it permitted executive choice within that limit, and that it did not confer uncanalised or arbitrary power.

Conclusion: Section 4-A was upheld and was not found to be violative of article 14 of the Constitution of India.

Issue (ii): Whether the notification enhancing entry tax on diesel, furnace oil and hexane imported from outside the State was invalid as violative of articles 19(1)(g), 301, 303 and 304 of the Constitution of India.

Analysis: The notification was examined as a measure under the entry tax regime, which was treated as distinct from a trade barrier or a discriminatory sales-tax regime. The Court accepted the State's justification that the higher rate was introduced in public interest to protect revenue and curb misuse of import facilities and bogus declarations. It was also held that the notification did not create an impermissible restriction on trade or commerce and did not offend the constitutional freedom of trade, since the levy operated within the statutory framework and applied to specified imported goods.

Conclusion: The notification was held valid and was not struck down under articles 19(1)(g), 301, 303 or 304 of the Constitution of India.

Final Conclusion: The constitutional challenge failed in its entirety, and the entry tax provision together with the impugned notification were sustained.

Ratio Decidendi: A taxing provision authorising enhanced entry tax is valid where the statute itself supplies policy, limits executive discretion by a maximum rate, and the notification issued under it is supported by public interest and does not create unconstitutional discrimination or a trade barrier.

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