Entry tax on blended imported tea was held unsustainable where statutory exemption applied despite change in form before sale.

Entry tax was not leviable on imported tea merely because it was blended with local varieties before sale. The statutory exemption under section 3 turned on the goods being brought into the local area and then subjected to VAT or sold in inter-State trade, not on whether they were sold in the identical form in which they entered the State. Tea remained a specified good after blending, and the Commissioner's contrary view that exemption failed unless the tea was sold unchanged was inconsistent with the statutory language. The impugned levy and related orders were therefore unsustainable.

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Issues: Whether entry tax was leviable on imported tea that was blended with local varieties and thereafter sold within the State and in inter-State trade.

Analysis: The statutory scheme of section 3 exempted specified goods in the relevant circumstances where the goods were brought into the local area and were subjected to tax under the value added tax regime or were sold in inter-State trade. Tea was a specified good. The decisive consideration was not that the imported tea had to be sold in the identical form in which it entered the State. Once the tea was blended, it did not cease to remain the specified good, and the sales attracted the appropriate VAT or Central sales tax on the respective transactions. The Commissioner's view that exemption was unavailable unless the tea was sold in the same form was inconsistent with the statutory language.

Conclusion: Entry tax was not leviable on the imported tea merely because it was blended before sale, and the impugned levy and orders were unsustainable.

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