Strict construction of entry tax law bars levy on goods imported from outside India into a local area.

A State may constitutionally levy entry tax on goods entering a local area under Entry 52, because Article 286 does not bar a tax whose incidence is entry into the local area rather than sale or purchase in the course of import or export. However, the levy must still fit the statutory charging and definitional provisions strictly. On a plain reading, the Assam Entry Tax Act, 2001 did not extend to goods imported from outside India into a local area, and the notification could not enlarge that scope. The entry tax demand on such imported goods was therefore invalid, and the tax and notification were quashed.

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Issues: (i) whether the State was competent to levy entry tax on goods imported from outside India into a local area; (ii) whether the Assam Entry Tax Act, 2001 and the notification levying tax on such goods could sustain the levy on a proper construction of the charging and definitional provisions.

Issue (i): whether the State was competent to levy entry tax on goods imported from outside India into a local area

Analysis: Entry 52 of List II authorises levy of tax on entry of goods into a local area, whereas Article 286 restricts only a State tax on sale or purchase in the course of import or export. The incidence of entry tax is the entry of goods into a local area, not the sale or purchase of goods. On the language of the constitutional provisions, the prohibition in Article 286 does not extend to a tax genuinely imposed on entry into a local area. However, the constitutional competence under Entry 52 must still be read with the statutory scheme enacted by the State.

Conclusion: The constitutional objection under Article 286 did not by itself defeat the power to levy entry tax, but the levy could operate only within the limits of the State enactment.

Issue (ii): whether the Assam Entry Tax Act, 2001 and the notification levying tax on such goods could sustain the levy on a proper construction of the charging and definitional provisions

Analysis: The charging provision and the definitions of "entry of goods into a local area" and "importer" were construed strictly. The language of the Act showed that it covered entry from another local area or from outside the State, but not goods brought from outside the country in the course of import into the territory of India. In a taxing statute, nothing can be read in by intendment or equity, and the court must give effect to the plain meaning of the words used. As the statute did not encompass such import from outside India, the notification levying entry tax on those goods could not be sustained.

Conclusion: The levy of entry tax on goods imported from outside India into the local area was invalid and the impugned tax and notification were quashed.

Final Conclusion: The writ petitions succeeded, and the respondents were restrained from insisting on payment of entry tax on the imported goods.

Ratio Decidendi: A taxing statute must be construed strictly, and where its charging and definitional provisions do not clearly extend to goods imported from outside India, entry tax cannot be imposed on such goods even if the State otherwise has constitutional power to tax entry into a local area.

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