Entry tax reassessment barred by change of opinion where steel scrap arose from repair and maintenance, not manufacture.

Entry tax on M.S. steel scrap was considered against the statutory scheme under the Entry Tax Act, 1976, which taxes the entry of goods into the local area and requires a section 7(1) endorsement only where locally manufactured, produced or grown Schedule II goods are sold as local goods without prior tax payment. On the stated facts, BALCO had already paid entry tax when the plant and machinery entered the local area, and the scrap arose only during repair and maintenance, not from a manufacturing process. Reassessment based on a later change of view on the same material was treated as a mere change of opinion and therefore impermissible under section 28(1) of the Commercial Tax Act, 1994. The reassessment, entry tax, and penalty were not sustainable.

---

---

Issues: Whether reassessment of entry tax on M.S. steel scrap purchased from BALCO was valid when the original assessment had proceeded on the footing that the goods were tax-paid, and whether such scrap generated during repair and maintenance of plant and machinery could be treated as local goods attracting entry tax.

Analysis: The statutory scheme under sections 3 and 7 of the Entry Tax Act, 1976 makes entry of goods into the local area the taxable event, while section 7(1) requires an endorsement in the sale document only when a registered dealer manufactures, produces or grows Schedule II goods in the local area and sells them as local goods on which entry tax has not been paid. On the facts, BALCO had already paid entry tax when plant and machinery were brought into the local area, and the steel scrap in question arose only during repair and maintenance of those assets. The invoices did not contain the endorsement contemplated by section 7(1), and the original assessment had accepted the purchases as tax-paid on the material then available. The reassessment proceedings were initiated only because the authority later took a different view on the same material, which amounted to a mere change of opinion. Such reopening is impermissible under section 28(1) of the Commercial Tax Act, 1994. The scrap was also not a by-product of any manufacturing activity so as to attract the contrary view urged by the Revenue.

Conclusion: The reassessment was invalid and the levy of entry tax and penalty on the petitioner could not be sustained.

---