Retrospective fiscal amendment upheld as non-discriminatory after earlier invalidation of the entry tax law could not survive.

The earlier invalidation of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012 could not survive after Jindal Stainless Ltd. removed the constitutional foundation on which it rested, and that judgment was set aside. The 2012 Act remained in force when amended by the West Bengal Finance Act, 2017, because the interim arrangement kept the statutory regime operative and the validity of the Act had not been finally extinguished. The 2017 retrospective amendments were upheld as within legislative competence and permissible under the post-GST transitional framework. They were also held not to be discriminatory under Article 304(a) absent proof of hostile discrimination. The Tribunal's contrary orders were therefore unsustainable and were set aside.

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Issues: (i) Whether the decision in Jindal Stainless Ltd. affected the earlier judgment striking down the West Bengal Tax on Entry of Goods into Local Areas Act, 2012; (ii) whether the 2012 Act remained in force when amended by the West Bengal Finance Act, 2017; (iii) whether the amendments made by the West Bengal Finance Act, 2017 were valid; (iv) whether those amendments were discriminatory; and (v) whether the Tribunal's orders could be sustained.

Issue (i): Whether the decision in Jindal Stainless Ltd. affected the earlier judgment striking down the West Bengal Tax on Entry of Goods into Local Areas Act, 2012.

Analysis: The earlier judgment had proceeded on the compensatory tax theory and had relied on authorities that were later overruled in Jindal Stainless Ltd. The overruling of those authorities removed the foundation on which the earlier judgment rested. Although the earlier judgment had not been formally disposed of earlier, its reasoning could not survive once the governing constitutional position was clarified by the later decision.

Conclusion: The earlier judgment striking down the 2012 Act could not survive and was set aside.

Issue (ii): Whether the 2012 Act remained in force when amended by the West Bengal Finance Act, 2017.

Analysis: The interim order in the pending appeals did not wipe out the earlier judgment, but it kept the statutory regime operative for the purpose of assessment and collection. The validity of the 2012 Act had remained open when the 2017 amendments were made, and the Act was not shown to have been finally extinguished before the amendment.

Conclusion: The 2012 Act was in force when amended on 6 March 2017.

Issue (iii): Whether the amendments made by the West Bengal Finance Act, 2017 were valid.

Analysis: The legislature possessed power to amend and validate the fiscal statute retrospectively. The amendments were enacted within the transitional framework created by the Constitution (One Hundred and First Amendment) Act, 2016 and were not shown to be beyond legislative competence or otherwise impermissible merely because they operated retrospectively.

Conclusion: The amendments introduced by the West Bengal Finance Act, 2017 were valid.

Issue (iv): Whether the amendments introduced by the West Bengal Finance Act, 2017 were discriminatory.

Analysis: Discrimination under Article 304(a) requires hostile discrimination and not mere differentiation. No sufficient material establishing individual instances of discriminatory treatment was placed before the Court, and the retrospective amendments were not shown to create an impermissible hostile burden as a class measure.

Conclusion: The amendments were not discriminatory.

Issue (v): Whether the Tribunal's orders could be sustained.

Analysis: Once the earlier judgment failed to survive and the amended statutory regime was held to be valid and non-discriminatory, the Tribunal's contrary view could not stand.

Conclusion: The Tribunal's orders were unsustainable and were set aside.

Final Conclusion: The statutory scheme under the 2012 Act, as amended in 2017, was upheld, the earlier constitutional invalidation did not survive, and the State's challenge succeeded across the connected matters.

Ratio Decidendi: Where the constitutional foundation of an earlier invalidation has been overruled, a pending challenge to the statute cannot survive on that basis alone, and a retrospective fiscal amendment enacted within legislative competence is valid unless hostile discrimination or other constitutional infirmity is specifically established.

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