1995 (11) TMI 416

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....ovisions of the Entry Tax Act, 1976 (No. 2 of 1976) as amended, on oil seeds and pulses purchased after payment of entry tax and were subsequently sold outside the State or/and in the course of inter-State trade or commerce?" 2.. Brief facts giving rise to this reference are that the applicant/assessee is a dealer in oil seeds, pulses, grains, etc. During the assessment year November 1, 1978 to October 20, 1979, he entered into whole purchases worth Rs. 5,49,863.82 and separated pulses worth Rs. 36,50,316.38. All these items were purchased by the applicant/assessee from commission agents who had paid the entry tax. He, therefore, claimed set-off of Rs. 5,490.64, Rs. 780.45 and Rs. 18,251.58 respectively. In all, Rs. 54,522.67 under secti....

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.... which, after entry into a local area, are sold outside the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India. (vi) in respect of goods specified in Schedule III imported from outside the State for consumption or use as raw material or incidental goods or as packing materials or in the execution of works contract but which have been disposed of in any other manner.   (vii) in respect of goods exempted from entry tax under section 10, and if tax on the entry of any goods specified in Schedule II or Schedule III effected during any period has been paid by a dealer and subsequent to such entry the goods are disposed of in the manner described in clause (v) or clause (vi)....

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.... shall be entitled to set-off of the tax already paid by him. Clause (v) says that in respect of goods specified in Schedule II which after entry into a local area are sold outside the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India, no tax under section 3(1) shall be levied. Therefore, the goods which has already suffered the entry tax and if it is sold outside the State in the course of inter-State trade or commerce or in the course of export, etc., outside the territory of India, then the dealer shall be entitled to the set-off under the proviso (vi). In the present case, the commission agents brought the goods into the local area after paying the entry tax and then they so....

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....t. In fact the set-off is part of the one point entry tax only and to read this provision to mean that the original dealer who has brought the goods in the local area will only be entitled to the set-off and not the other dealer who has purchased the same goods which has already suffered entry tax, will militate against the intention of the Act. It would be discriminatory also because when the goods has already suffered the entry tax and the Legislature has given specific set-off of levy of tax on entry of goods into a local area, that simply because the goods has changed the hands to another dealer, then that dealer is denied the benefit of set-off. Denial of such a benefit will operate as discriminatory and will be against the intended pu....