West Bengal Entry Tax Act 2012 declared constitutional after Single Judge's 2013 ruling overturned

State Of West Bengal And Ors. Joint Commissioner, Commercial Tax, Group I, Barrackpur & Ors. Versus Pepsico India Holdings Private Limited, Century Extrusions Ltd & Anr., Siemens Ltd & Anr., Impex Ferrotech Ltd & Anr., Impex Metal And Ferro Alloys Ltd And Anr., Ranbaxy Laboratories Ltd., Dutch Tech Tools Pvt. Ltd., Nokia India Pvt Ltd., Marico Limitted, Glaxosmithkline Consumer Healthcare Ltd., and Others.

State Of West Bengal And Ors. Joint Commissioner, Commercial Tax, Group I, Barrackpur & Ors. Versus Pepsico India Holdings Private Limited, Century ... The judgment involves a series of appeals and writ petitions concerning the West Bengal Tax on Entry of Goods into Local Areas Act, 2012, and its subsequent amendment by the West Bengal Finance Act, 2017. The core issues revolve around the constitutional validity of the original Act and the amendments, primarily in light of the Supreme Court decision in Jindal Stainless Ltd.

Issues Presented and Considered

The Court considered several key issues:

i. The impact of the Jindal Stainless Ltd. decision on the judgment of the learned Single Judge dated June 24, 2013.

ii. The status of the Entry Tax Act, 2012 at the time of its amendment on March 6, 2017.

iii. The validity of the amendments introduced by the West Bengal Finance Act, 2017.

iv. Whether the amendments were discriminatory.

v. The correctness of the Tribunal's orders.

vi. The reliefs to which the parties are entitled.

Issue-wise Detailed Analysis

First Issue: Effect of Jindal Stainless Ltd. on the Single Judge's Judgment

The Single Judge had declared the Entry Tax Act, 2012 unconstitutional, relying on precedents like Atiabari and Automobile Transport, which were later overruled by Jindal Stainless Ltd. The Court concluded that the Single Judge's judgment could not survive post-Jindal Stainless Ltd., as it relied on now-overruled decisions. Thus, the judgment was set aside.

Second to Fifth Issues: Status and Validity of the Entry Tax Act and Its Amendments

The interim order dated July 31, 2013, allowed the assessments under the Entry Tax Act, 2012 to continue, indicating the Act's validity was still an open question. The Court found that the Act was in force at the time of its amendment in 2017. The amendments were deemed valid and non-discriminatory, as no substantial evidence suggested otherwise. The Court allowed assessees to raise discrimination issues in appropriate forums if advised.

Sixth Issue: Reliefs and Tribunal's Orders

The Tribunal's orders were set aside as they were based on the now-invalidated Single Judge's judgment. The appeals by the State were allowed, and the writ petitions were disposed of accordingly.

Significant Holdings

The Court emphasized that the Entry Tax Act, 2012 was valid at the time of its amendment, and the amendments introduced by the West Bengal Finance Act, 2017 were lawful and non-discriminatory. The judgment reinforced the principle that taxes are not inherently unconstitutional unless proven discriminatory. The decision in Jindal Stainless Ltd. was pivotal in shaping the Court's conclusions, particularly regarding the overruling of earlier precedents.

In conclusion, the appeals against the Single Judge's judgment were allowed, and the writ petitions challenging the Tribunal's orders were disposed of, with no costs awarded. The decision underscores the necessity of a formal judicial order to set aside a judgment, even when precedents it relied on are overruled. The Court's ruling provides clarity on the application of entry tax laws in West Bengal, aligning them with constitutional requirements and Supreme Court jurisprudence.