Entry tax turns on purchaser intention; factory-gate sugar meant for outside-State movement was not liable under the local areas law.

Entry tax under Section 12 of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 was held inapplicable where sugar sold from the factory gate was intended for movement outside Uttar Pradesh. The statutory scheme, read with Section 4(1) and Section 2(d), applies only when the purchaser intends to bring goods into a local area within the State and excludes goods sold within the local area of origin or moved outside the State. The relevant test is the purchaser's intention at the time of purchase, and the assessee's invoices, transport documents and banking receipts supported that position. The revenue produced no credible rebuttal, so no entry tax liability arose.

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Issues: Whether entry tax under Section 12 of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 was leviable on sugar sold from the factory gate where the assessee asserted that the goods were intended to be transported outside the State on the basis of invoices, transport documents and banking receipts.

Analysis: Section 12 applies only where the purchaser intends to bring the goods into a local area within the State. The statutory scheme, read with Section 4(1) and the definition in Section 2(d), excludes goods consumed, used or sold within the local area of origin and also excludes movement outside the State, whether by inter-State sale or export. For this levy, the relevant test is the purchaser's intention at the time of purchase, not the stricter requirements applicable under Sections 3 and 5 of the Central Sales Tax Act, 1956. The assessee produced sale invoices, transportation documents and proof of payment through banking channels, while the revenue led no credible evidence to dislodge the finding that the goods were meant to go outside Uttar Pradesh.

Conclusion: No liability to collect entry tax arose under Section 12 of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007, and the Tribunal's finding rejecting the revenue's challenge was upheld.

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