Entry tax exemption for policy-covered sugar units secured, with coercive recovery stayed subject to certificate production.

Non-levy sugar manufactured in a new or expanded unit covered by the Sugar Industry Promotion Policy, 2004 was exempt from entry tax under the Uttar Pradesh Tax on Entry of Goods Act, 2000, subject to production of the prescribed certificate from the assessing authority and compliance with the stated conditions. Because the challenge to withdrawal of the policy was already pending and interim protection had been granted in the connected matter, limited protection against coercive recovery of entry tax and allied dues was extended here as well. The protection remained contingent on production of the requisite certificate.

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Issues: Whether the petitioners were entitled to protection from coercive steps for realization of entry tax on sugar purchased from units covered under the Sugar Industry Promotion Policy, 2004, on production of the requisite certificate, pending the final outcome of the connected writ petition.

Analysis: The notification issued under Section 4-B of the Uttar Pradesh Tax on Entry of Goods Act, 2000 exempted non-levy sugar manufactured in a new unit or an expanded unit covered by the policy from entry tax, subject to production of a certificate from the assessing authority and fulfilment of the stated conditions. The connected matter concerning withdrawal of the policy was already pending, and an interim order had granted protection against coercive action in respect of entry tax and allied dues. In that background, limited protection was considered appropriate in the present matter as well.

Conclusion: The petitioners were entitled to protection against coercive recovery of entry tax on sugar purchases from units covered by the 2004 policy, subject to production of the requisite certificate.

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