Entry tax applies only to goods brought from outside a local area, not to intra-area sales by a manufacturer.

Entry tax is attracted only when goods enter a local area from outside for consumption, use or sale there; goods manufactured and sold within the same local area do not trigger the charging event. Section 12 is only a collection machinery provision and cannot enlarge liability, so it applies only where the purchaser intends to take the goods into a local area. It does not cover every sale by a manufacturer, and local sales with no such intention require only disclosure in the prescribed return. The doctrine of no prejudice cannot override the statute to compel tax collection where no legal liability exists.

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Issues: (i) Whether entry tax is leviable on goods manufactured and sold within the same local area; (ii) What is the nature and scope of section 12 of the Act; (iii) Whether section 12 takes within its ambit all sales made by a manufacturer; (iv) Whether the doctrine of no prejudice can be applied to compel the manufacturer to realise and deposit entry tax on all transactions irrespective of the purchaser's intention not to take the goods into another local area.

Issue (i): Whether entry tax is leviable on goods manufactured and sold within the same local area.

Analysis: The charging provision fastens liability only when goods enter a local area from outside that area for consumption, use or sale therein. The definitions of "entry of goods" and "dealer" reinforce that the taxable event is movement into the local area from outside it. Where purchase and sale both occur within the same local area, there is no entry of goods from outside and no taxing event arises.

Conclusion: Entry tax is not leviable on goods manufactured and sold within the same local area.

Issue (ii): What is the nature and scope of section 12 of the Act.

Analysis: Section 12 is a machinery provision for collection of entry tax and not an independent charging provision. Its operation is tied to a purchaser who intends to bring goods into a local area from a manufacturer within the State. It does not enlarge the tax liability of the manufacturer or create universal liability for every sale. The statutory language must be given effect in full, and the words referring to intention cannot be rendered otiose.

Conclusion: Section 12 is limited in scope and applies only where the purchaser intends to bring the goods into a local area.

Issue (iii): Whether section 12 takes within its ambit all sales made by a manufacturer.

Analysis: The provision does not cover all sales without exception. Sales within the same local area, where the purchaser does not intend to take the goods elsewhere, fall outside its ambit. The obligation to collect and deposit tax does not arise in such transactions, and the manufacturer is only required to disclose such sales in the prescribed return.

Conclusion: Section 12 does not extend to all sales made by a manufacturer.

Issue (iv): Whether the doctrine of no prejudice can be applied to compel the manufacturer to realise and deposit entry tax on all transactions irrespective of the purchaser's intention not to take the goods into another local area.

Analysis: The doctrine cannot override the express scope of the statute. The availability of refund in certain contingencies does not justify collection of tax where no liability exists in law. A person cannot be compelled to pay tax first and seek refund later when the statute does not impose the tax at the outset.

Conclusion: The doctrine of no prejudice cannot be used to compel collection of entry tax on such local sales.

Final Conclusion: The impugned notices were without jurisdiction insofar as they proceeded on local sales within the same local area, and the penalty proceedings based on those notices were liable to be quashed.

Ratio Decidendi: Entry tax under the Act is attracted only by entry of goods from outside a local area, and a collection machinery provision cannot be expanded to impose tax on sales within the same local area where the purchaser does not intend such entry.

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