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2007 DIGILAW 253 (JHR)

Tata Iron And Steel Co. Ltd. v. State Of Bihar

2007-04-05

PERMOD KOHLI

body2007
JUDGMENT Permod Kohli, J. 1. By Court: Petitioner-Company has asked for quashing the assessment order dated 16 th March, 1996, passed by the Assistant Commissioner, Commercial Taxes, Deoghar Circle, Deoghar making assessment for imposition of Entry Tax under The Bihar Tax on Entry of Goods into Local Areas for Consumption, use or Sale Therein Act, 1993 for the period 05.04.1995 to February, 1996 to the tune of Rs. 35,36,829.90 and also to quash the Demand Notice dated 16 th March, 1996, issued pursuant to the Assessment order. The further prayer is made restraining the Respondents from realizing the amount demanded and also for refund of the amount of Rs. 28,35,280/- already recovered as a consequence of the assessment. 2. It is not in dispute that the vires of the provisions of the The Bihar Tax on Entry of Goods into Local Areas for Consumption, use or Sale Therein Act, 1993 were challenged before this Court in W.P. (T) No. 5354 of 2004. A Division Bench of this Court vide its judgment dated August, 4 2006 declared the same ultra vires being violative of Articles 301 read with Article 301(b) of the Constitution of India. Consequently, the Court also quashed the Notifications issued by the State Government for enforcement of the Act. 3. Mr. Modi, learned G.P. I appearing for the State-Respondents submits that the Division Bench judgment of this Court referred to above is subject matter of challenge before the Apex Court. He however, submits that there is no stay of the judgment of this Court so far. His further contention is that the vires of this Act were challenged earlier also and upheld by the Apex Court and in the light of this fact, the assessment made and demand issued cannot be said to be illegal. His further contention is that the judgment operates prospectively and any assessment made and demand issued prior to the judgment cannot be quashed. 4. I have heard the learned Counsel appearing for the parties. 5. The assessment made and the demand have been issued in exercise of the powers under the provisions of The Bihar Tax on Entry of Goods into Local Areas for Consumption, use or Sale Therein Act, 1993. The Act has been declared ultra vires. Due to annulment of the various provisions of the Act, the actions under the Act cannot be saved, unless so held specifically by the Court. The Act has been declared ultra vires. Due to annulment of the various provisions of the Act, the actions under the Act cannot be saved, unless so held specifically by the Court. Article 265 of the Constitution of India prohibits levy as also the collection of the tax without authority of law. When the imposition itself becomes nullity on account of striking down the provisions of the Act, its collection cannot be permitted. In any case, even if the doctrine of prospectivity is applied, the order of assessment and the demand are subject matter of challenge before this Court and is a pending lis. When this case has been taken up for consideration, the provisions of the The Bihar Tax on Entry of Goods into Local Areas for Consumption, use or Sale Therein Act, 1993 are not in operation and since the matter has been taken up after the judgment, it cannot be said that the judgment will have no application on the doctrine of prospectivity. 6. In view of the above circumstances, the impugned assessment order and the demand notice are hereby declared illegal being without authority of law. Since the collection of the tax is without the authority of law, which is also impermissible under Article 265 of the Constitution of India, the amount already recovered by way of tax cannot be retained by the State. This petition is, accordingly, allowed by quashing the impugned assessment order as also the demand notice with a further direction to refund the amount of Rs. 28,35,280/- recovered from the petitioner as entry Tax, within a period of three months from today, failing which petitioner shall be entitled to interest @ 4 per cent after expiry of a period of three months.