Conditional protection from entry tax recovery granted for sugar purchases under the Sugar Industry Promotion Policy framework.

Conditional protection against coercive recovery was extended for entry tax on sugar purchased from units covered by the Sugar Industry Promotion Policy, 2004, because the exemption under the section 4B notification applied to non-levy sugar manufactured in new or expanded units subject to prescribed conditions, including production of a certificate from the assessing authority. The protection was made dependent on furnishing the requisite certificate and on the outcome of the connected writ petition concerning revocation of the policy, and the writ petition was disposed of without finally determining the underlying tax liability.

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Issues: Whether the petitioner was entitled to protection against coercive steps for recovery of entry tax on sugar purchased from units covered by the Sugar Industry Promotion Policy, 2004, subject to production of the requisite certificate and the result of the connected writ petition.

Analysis: The notification issued under section 4B of the Uttar Pradesh Tax on Entry of Goods Act, 2000 granted exemption from entry tax on non-levy sugar manufactured in a new unit established or expanded under the Sugar Industry Promotion Policy, 2004, subject to specified conditions, including production of a certificate from the assessing authority of the manufacturing unit. The Court noted that an earlier writ petition concerning revocation of the policy was pending and that an interim protection had already been granted in that matter against coercive recovery of administrative charges, entry tax, VAT and purchase tax. In view of these circumstances, the Court found it appropriate to extend similar protection to the present petitioner.

Conclusion: The petitioner was entitled to protection from coercive steps for recovery of entry tax on sugar purchases from units covered under the Sugar Industry Promotion Policy, 2004, subject to production of the requisite certificate and the final outcome of the connected writ petition.

Final Conclusion: The writ petition was disposed of by granting conditional interim protection against recovery proceedings, without finally adjudicating the underlying tax liability.

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