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Jharkhand High Court · body

2008 DIGILAW 729 (JHR)

Prakash Jain v. State of Jharkhand

2008-07-16

R.R.PRASAD

body2008
Order This application has been filed under Section 482 of the Code of Criminal Procedure for quashing the entire criminal proceeding of 8ariatu (Gonda) P.S. Case No. 47 of 2008 instituted under Sections 406/420/384/385 of the Indian Penal Code against the petitioner. 2. The facts giving rise this application are that the informant-opposite party no. 2, Director of a Company named as M/s Satyabhama Developers Pvt. Ltd. lodged a case stating therein that the Company is engaged in developing land by constructing multi-storied building. In course of time, one Sri Prakash Jain (petitioner no. 1) entered into an agreement along-with other landowners whereby multistoried building over a piece of land was to be constructed and the petitioner no. 1 was to be given a flat measuring 1500 sq. ft. along-with parking-space which on being constructed was given to him 17.1.2002 and thereafter, he alongwith other landowners executed a deed of power of attorney in favour of Vikash Agarwal under which Vikash Agarwal was authorized to sell other flats to intending purchaser but the petitioner no. 1 after taking possession of the flat and parking area cancelled the power of attorney and started putting illegal demand on telephone of As. 2 crore and even extended threat in the terms that unless the matter is compromised, he may not have right over the flat and if he does not come to his term, he will have to face dire consequences. 3. Learned counsel appearing for the petitioners submits that the entire allegation made in the first information report are false and as a matter of fact, petitioner no. 1 along-with other five landowners entered into an agreement on 23.6.1999 with M/s Satyabhama Developers Pvt. Ltd. for construction of multistoried building. Subsequently, a joint power of attorney was executed by the landowners in favour of Vikash Agarwal, son of opposite party no. 1 along-with other five landowners entered into an agreement on 23.6.1999 with M/s Satyabhama Developers Pvt. Ltd. for construction of multistoried building. Subsequently, a joint power of attorney was executed by the landowners in favour of Vikash Agarwal, son of opposite party no. 2 for the purpose of negotiating sale of the flat receiving money from them and to grant receipt and to deposit the same to the principal/land owner and also to execute sale deed in favour of the purchasers but in violation of such stipulation, neither the amount was given nor due share in the built up area was given to the informant and therefore, two landholders, namely, Kailash Chandra Agarwal and Sambhu Dayal Agarwal revoked the power of attorney and subsequently, the petitioner also revoked the power of attorney on 4.7.2005 and such information regarding revocation was communicated to the opposite party no. 2 and even it was published in the newspaper but in spite of that, Vikash Agarwal along-with Surendra Kumar Agarwal, opposite party no. 2 executed a sale deed in favour of some of the purchasers transferring some of the flats though neither opposite party no. 2 nor his son Vikash had any authority to execute the registered sale deed. 4. It was also pointed out that for such act when a criminal case was lodged by petitioner no. 1, under Sections 406/ 409/417/420 and other penal offences of the Indian Penal Code, cognizance was taken and when the prayer for anticipatory bail of Vikash Agarwal was refused. this case was lodged with ulterior motive to put pressure upon the petitioner to come to their terms and as such the first information report is fit to be quashed. 5. Learned counsel appearing for the petitioner further submits that otherwise also the case, on account of the subsequent development whereby parties have settled their dispute purely a personal one arising out of business dealings not involving public policy have failed a joint compromise petition, criminal proceeding is fit to be quashed, in view of the ratio laid down by the Hon'ble Supreme Court in a case of Madan Mohan Abbot vs. State of Punjab [ 2008(2) Supreme 750 ] notwithstanding the fact that some offences are non-compoundable. 6. Learned counsel appearing for the opposite party no. 2 also submits that parties have resolved their dispute amicably and hence, have filed a joint com promise petition. 7. 6. Learned counsel appearing for the opposite party no. 2 also submits that parties have resolved their dispute amicably and hence, have filed a joint com promise petition. 7. Straightway coming to the last submission warranting this Court to exercise extraordinary power under Section 482 of the Code of Criminal Procedure for ends of justice as the dispute being personal In nature not involving public policy ended in a compromise, I may refer to a case of Madan Mohan Abbot VS. State of Punjab [ 2008(2) Supreme 750 ] wherein the Hon'ble Supreme Court taking note of the fact that the dispute being purely a personal one not involving public policy was resolved by way of compromise did hold that it is perhaps advisable that in dispute where the question involved is purely of personal nature, the Court should ordinarily accept the terms of the compromise even in criminal proceeding as keeping the matter alive with no possibility of a result in favour of the prosecution is a luxury which the Court, grossly overburdened are, cannot afford and that the time so saved can be utilized in deciding more effective and meaningful litigation. 8. Keeping in view, the aforesaid observation it may be reiterated that in the instant case, parties seem to have settled their dispute which was purely a personal one not involving any public policy by way of memorandum of settlement filed with the joint compromise petition and in that view of the matter, no useful purpose would be served in allowing the criminal proceeding to continue with as there would be no possibility of any conviction being recorded. 9. Under the situation, the entire criminal proceeding in connection with 8ariatu (Gonda) P.S. Case No. 47 of 2008 instituted under Sections 406/420/384/385, pending in the Court of Chief Judicial Magistrate, Ranchi is hereby quashed. 10. In the result, this application is allowed. 24. In the Punjab & Haryana. the Haryana Local Area Development Tax Act, 2000 and the Haryana Local Area Development Tax (Amendment) Ordinance, 2007 were enacted and prumul-gated making provisions for levy and collection of tax on the entry of goods into local areas of the State of Haryana for consumption, sale or use therein. 24. In the Punjab & Haryana. the Haryana Local Area Development Tax Act, 2000 and the Haryana Local Area Development Tax (Amendment) Ordinance, 2007 were enacted and prumul-gated making provisions for levy and collection of tax on the entry of goods into local areas of the State of Haryana for consumption, sale or use therein. Section 3 confers power to the State to levy and collect tax of entry into the local areas of all goods except those goods specified in Schedule 'A' for consumption or use therein. Section 22 of the said Act provides that tax collected under this Act shall be distributed by the State Government amongst the local bodies to be utilized for the development of local areas. An Explanation was added to Section 22 in 2003 according to which, the 'development of local areas' means developing and maintaining infrastructure facilities useful for free-flow of trade and commerce. An Explanation was further added explaining that development facilitating free-flow of trade and commerce means developing and maintaining infrastructure facilities facilitating the free-flow of trade and commerce such as roads, bridges, culverts, sewerage, drainage, sanitation, waste management, electricity, drinking water and other infrastructure facilities. Section 22 of the said Act provides constitution of Board and its following functions:- "22A. Constitution of Board and its functions.-(1) There shall be a Board consisting of a Chairman and following ex officio members:- (a) Chief Minister, Haryana (b) Chief Secretary, Haryana Chairman (c) Finance Secretary, Haryana (d) Financial Commissioner and Secretary to Government, Haryana, Excise and Taxation Department (e) Financial Commissioner and Secretary to Government, Haryana, Development and Panchayats Department (f) Commissioner, Urban Local bodies, Haryana (9) Excise and Taxation (h) Additional Excise and Taxation Officer ex officio member ex officio member ex officio member ex officio member ex officio member Member-Commissioner Haryana, Secretary Chief Commissioner/Joint Excise and Executive Taxation Commissioner, Haryana (2) The Headquarter of the Board shall be at Chandigarh. (3) The Board shall perform the following functions:- (i) It shall ensure balance development of the local areas falling within the domain of the urban as well as rural local bodies. (ii) It shall identify the areas which require immediate development/maintenance of infrastructure facilities out of proceeds of tax. (iii) It shall accordingly recommend allotment of proceeds of tax for developing and maintaining infrastructure facilities like roads, bridges, culverts, sewerage, drainage, sanitation, waste management, electricity, drinking water and other infrastructural facilities. (ii) It shall identify the areas which require immediate development/maintenance of infrastructure facilities out of proceeds of tax. (iii) It shall accordingly recommend allotment of proceeds of tax for developing and maintaining infrastructure facilities like roads, bridges, culverts, sewerage, drainage, sanitation, waste management, electricity, drinking water and other infrastructural facilities. (iv) It shall recommend changes in the rate of tax in order to keep the levy as per the guideline!; issued in this behalf from time to time. (v) It shall ensure that the proceeds of tax collected under this Act are not much more than the amount actually required for development of local areas. 25. In the case of Jindal Stripes Limited and Another VS. State of Haryana and Others [(2008)12 VST 149 (P&H)], while considering the vires of Haryana Local Area Development Tax Act, 2000, the Division Bench of Punjab and Haryana High Court after analyzing the Act came to the following conclusion:- "29, From the rival submissions of the learned counsel for the parties and in the light of direction of the honourable Supreme Court, we are required to deal with the issue whether the impugned levy was compensatory in nature having regard to the judgment of the Constitution Bench in Jindal (2006)145 STC 544 (SC) : (2006)7 SCC 241 . 30. The question is whether the impugned Act meets the facial test laid down by the honorable Supreme Court in Jindal (2006)145 STC 544 : (2006)7 SCC 241 and whether the data placed on record by the State shows that the impugned levy functionally is compensatory and provides quantifiable or measurable benefit to the payers of the tax? 31. A perusal of statutory provisions shows that the levy of tax is only entry of goods into a local area for consumption, use or sale and the tax is payable by the importer with reference to value of goods at a specified rate. The tax collected is to be distributed by the State Government among the local bodies. The same is to be utilized for development facilitating free-flow of trade and commerce on infrastructural facilities such as roads. bridges, culverts, sewerage, drainage, sanitation, waste-management, electricity, drinking water and other infrastructural facilities. At least 60 per cent of the amount is to be utilized. The board is to ensure balanced development of local areas and recommend allotment of proceeds of tax and changes in the rate of tax. bridges, culverts, sewerage, drainage, sanitation, waste-management, electricity, drinking water and other infrastructural facilities. At least 60 per cent of the amount is to be utilized. The board is to ensure balanced development of local areas and recommend allotment of proceeds of tax and changes in the rate of tax. The board is also to ensure that the proceeds of tax are not more than the amount actually required for development of local areas. The petitioners have advanced two grounds for submitting that the impugned levy does not meet the facial test: (i) Compulsion to utilize the tax collected is only to the extent of 60 per cent and the amount of 40 per cent need not be accounted for, and (ii) lnfrastructural facilities facilitating free-flow of trade and. commerce may not in fact. have any connection with the facilities for trade and commerce. 32. Waste-management, sanitation. drainage, water. electricity may be unconnected with the facilities for the purpose of trade. The said facilities may be made before general development of the State, though termed as facilitating trade and commerce. There is no separate earmarking of the facilities planned for the traders or facilities generally for water supply, hygiene, sanitation, waste-management, etc. 33. The defence on behalf of the State is that the statutory provisions for constituting a Board and requiring the Board to ensure that the tax collected was not much more than the amount actually required and provision for utilizing at least 60 per cent for development facilitating free-flow of trade and commerce of the payers of the tax was not enough to meet the facial test, if the payers of the tax are taken to be the ultimate payers to whom the burden was passed on, which include farmers. transporters and consumers. 34. We find merit in the contention raised on behalf of the petitioners. The levy is not to meet the cost of any specific facility already provided or planned to be provided. The parameters clearly laid down in Jindal (2006)145 STC 544 (SC) : (2006)7 SCC 241 [particularly paras, 16 and 41 to 45 (paras 15 and 38 to 42 in 145 STC] are that compensatory tax represents the costs incurred in procuring facilities/ services on the principle of "pay for value". It is a charge for offering trade facilities. It adds to value of trade and commerce. It is based on the principle of equivalence. It is a charge for offering trade facilities. It adds to value of trade and commerce. It is based on the principle of equivalence. It must have a broad proportion to the benefit derived to defray the cost of regulation or to meet the outlay incurred for some special advantage to trade and comroerce and intercourse. The impugned levy initially was meant to be for assistance to local areas for their development generally and the amendment brings about only a superficial change in the language while retaining the basic character of the levy as a source for raising general development. In this view of the matter, we are unable to hold that the facial test is met. Mere specification of the 60 per cent of the amount being in line with judgments dealing with levy of fee is of no consequence when the very subject-matter of utilization cannot be treated as any special direct or exclusive service or benefit to the payer of the tax." 26. A similar provision, namely, Karnataka Special Tax on Entry of Certain Goods Act, 2004 was challenged in the case of Bharat Earth Movers ltd. vs. State of Karnataka and Others [2007]8 VST 69 (Karn.) before the Karnataka High Court. Under the said Act, provision was made for levy and collection of tax on the entry of any notified goods in the area for consumption, use or sale therein. The said tax was made payable by an importer in accordance with the Act and the rules made there-under. Petitioners' case was that such levy on only goods brought from outside the State payable by the importer who causes the entry of goods in the local area from any place outside the State for consumption or use therein and the levy being confined to only persons who are importers, is discriminatory and in violation of the mandate under Article 301 of the Constitution of India. In that case, the defence put forth on behalf of the State was that the levy was in the nature of compensatory levy and therefore, it is out of the purview of Part-XIII of the Constitution of India itself. In that case, the defence put forth on behalf of the State was that the levy was in the nature of compensatory levy and therefore, it is out of the purview of Part-XIII of the Constitution of India itself. It was contended that the revenue raised from the levy of tax of this nature on the importers is broadly equivalent to the value of the facilities such as roads, lighting facility, drainage, etc., provided to the importers, costs considerable amount to the State. Declaring the said provision ultra vires, the Karnataka High Court held:- "49. Assuming that the argument of the learned Advocate General is good in law, even then the State has miserably failed to make good the defence on facts. There is absolutely no correlation to the revenue generated under the specific Act to the so-called expenditure incurred by the local authorities for providing the services mentioned by the respondents. I say so for the reason that the local authorities have their own means of raising revenues and in respect of the expel1diture for meeting such benefits, 30 per cent of the expenditure is sought to be collected from the asses-sees under the Act. There are other levies imposed under the other enactments by the State and the local authorities and such revenue is not at all accounted for. In Act, there is no serious attempt at all on the part of the State to demonstrate either that the expenditure incurred towards the so-called services provided to the trading community in general is a particular amount and that the asses sees under the Act constitute 30 per cent of such members of the trading community, for whose benefit the expenditure is incurred. 50. This apart no material at all is placed about the revenue to the State and the local authorities under the other enactments, which have links or nexus to the kind of the facilities sought to be provided by the State such as provision for roads, water, lighting, drainage, etc. etc. There is no link or correlation at all on facts in respect of the revenue from the levies under the present enactment and the revenue and expenditure under other enactments. The defence of the State that the levy under the Act is a compensatory levy fails miserably and is rejected." 27. etc. There is no link or correlation at all on facts in respect of the revenue from the levies under the present enactment and the revenue and expenditure under other enactments. The defence of the State that the levy under the Act is a compensatory levy fails miserably and is rejected." 27. Similarly, the Allahabad High Court in the case of Indian Oil Corporation Limited vs. State of Uttar Pradesh and Others [2007]10 VST 282 (All.) also decided the vires of U.P. Tax on Entry of Goods Tax, 2000, which was challenged by the asses-see. The challenge was mainly on the ground that tax levied under the said Act was not compensatory and hence, violative of Articles 301 and 304 of the Constitution of India. In that case, State of U.P. supplied data by filing affidavit showing year-wise receipt from entry tax and funds provided by the State Government to local bodies by way of grantin-aid and also the expenditure incurred for developmental works. The Allahabad High Court declaring the provision ultra. vires held:- "13. Contents of the affidavit of Amitabh Mishra, and documents filed along-with it (quoted above) utterly fail to show that amount of "entry tax" in any manner (as pointed out by the Apex Court in its judgment in the case of Jindal Stainless Ltd. [2006]145 STC 544 (SC); (2006)4 JT SC 611) "indicate the quantifiable benefit" to the "traders" scheduled under Section 4 of the Act. The State has failed to discharge the "burden" required for establishing the "levy" under the Act is compensatory-either directly or indirectly. The "data" brought on record by the respondents do not reflect the "levy" as entry tax to be proportionally measurable/quantifiable benefit which may be said to be specially extended to scheduled trades only. The documents filed by the respondents show that certain amount has been allocated for Panchayats and local bodies by way of "grant-in-aid" to the local bodies/municipalities by the State Government for urban development which includes water supply, health, general development of village, construction of roads, bridges, etc. The documents filed by the respondents show that certain amount has been allocated for Panchayats and local bodies by way of "grant-in-aid" to the local bodies/municipalities by the State Government for urban development which includes water supply, health, general development of village, construction of roads, bridges, etc. Whatever is being realized under the Act is pooled into the consolidated fund and thereafter budgetary allocation is done to make the deficiency of funds, enable Panchayats and local bodies who otherwise fails to earn revenue on their own and thus to facilitate them to carry out their statutory/constitutional obligations, i.e., implementation of "Welfare Schemes" and maintain "civil services" in general. "Entry tax", under impugned Act, 2000 has no identifiable or specified link with the "trades" enumerated in the Schedule in the Act." The Bench further held:- "29. It is clear from the perusal of documents annexed with the affidavit of Amitabh Mishra that the amount of revenue earned from "entry tax" under the Act is pooled in the "consolidated fund"-which is utilized under budgetary-allocation to the States, which is also utilized as "grant-in-aid" by "State" to make. up budgetary deficit of a local body to discharge their statutory/constitutional obligations-which apart from other include construction of roads, bridges, etc. The respondents have placed figures relating to the "funds" given as "grant-in-aid" to Panchayats local bodies from "consolidation fund as part of its share received by State of U.P. " 28. A similar case under the Kerala Tax on Entry of Goods into Local Areas' Act, 1994 was challenged in the case of Thressiamma L. Chirayil vs. State of Kerala and Another [ 2007]7 VST 293 (Ker.) as being illegal, discriminatory, ultra vires to the Constitution of India. In that case also, the affidavit filed by the Commissioner of Commercial Taxes, Government of Kerala explaining the services and expenditure incurred by the State for importers of the goods. It was stated that the State provides variety of services such as convenient roads, protection from transport of goods through traffic checking and police protection for transport of goods through traffic checking and police aid. The affidavit also referred the datas explaining various expenditure incurred by the State for maintenance of roads, bridges, water transport, development of industries and allied matters. The affidavit also referred the datas explaining various expenditure incurred by the State for maintenance of roads, bridges, water transport, development of industries and allied matters. It was contended that there is direct nexus to the levy of entry of tax on goods and the expenditure incurred by the State to provide corresponding service to the importers of goods. The Bench while considering the various provisions of the Act and the law laid down by the Supreme Court declared such provisions as discriminatory and ultra vires to the Constitution. The Bench observed:- "26. We shall now examine whether the State has discharged the burden of showing that the levy is compensatory by placing materials before the Court. We have already referred to the affidavit filed by the Commissioner of Commercial Tax. Provision for convenient roads in the State and its expenditure for maintenance, so also bridges, water transport, ports, light houses, development of industries and allied matters are the services rendered by the State so as to support the levy of compensatory tax. Neither in the object and reasons of bill nor in the preamble of the Act there is any indication that the levy of entry tax was for the aforesaid purpose but only for augmenting the general revenue. Essence of compensatory tax is that the services rendered or faculties provided should be more or less commensurate with the tax levied. Services provided will have a direct co-relation with the trade. The main basis of a compensatory tax is the quantifiable and measurable benefit, represented by the costs incurred in procuring the facility/service. The cost, in turn, became lhe basis of reimbursement/recompense for the provider of services/facilities. From the point of view of Government, as stated by the Apex Court in Jindal Stainless Ltd.'s case (2006)145 STC 544 (SC): (2006)7 SCC 241 , a compensatory tax is a charge for offering trading facilities and they are based on the principles of equivalence. Applying the above test, it cannot be said that maintaining of roads, providing bridges, etc., is compensatory in nature so also meet the outlay incurred for some special advantage to trade, commerce and intercourse. Providing the above facilities and its use may incidentally bring in net revenue to the Government, but that circumstance is not an essential ingredient of compensatory tax. Providing the above facilities and its use may incidentally bring in net revenue to the Government, but that circumstance is not an essential ingredient of compensatory tax. We may in this connection point out that in the counter-affidavit filed by the State in Rajan’s case [2003J133 STC 598 (Ker.); [1995J2 KL T 369, the stand of the State was that entry tax was collected in lieu of sales tax and to compensate the loss of sales tax revenue. Some indirect connection or some connection, more or less commensurate, etc., are not the tests, but the direct and immediate effect is the test. Maintaining of roads, bridges, etc., and promotion of SSI units, etc., are generally met from the general funds or revenue. Whether goods are transported into the State from outside the State or abroad the State has got a duty to provide those facilities, like roads, bridges, etc., which is being enjoyed not only by persons who bring goods notified for levy of entry tax but also others. In our view, there is absolutely no connection or nexus with the collection of entry tax and its utilization for the benefit of traders/manufacturers from whom such tax is collected. Affidavit filed is not specific and the State has not been able to establish the nexus between entry tax collected and the benefit conferred upon the person from whom the tax is collected. We also notice, the State is also discriminating between traders who bring goods from outside the State or country to a local area as defined under Section 2(1 )(h) read with Section 2(1 )(d) and person who brings goods from an area within the State to a local area in the State. Facts would indicate that on the introduction of entry tax. manufacturers have opted to purchase raw materials from within the State because they are less costlier since the levy of entry tax has definitely created a tax barrier affecting the free-flow of trade, commerce and intercourse, such a tax violates Article 301 of the Constitution and therefore liable to be declared as unconstitutional. manufacturers have opted to purchase raw materials from within the State because they are less costlier since the levy of entry tax has definitely created a tax barrier affecting the free-flow of trade, commerce and intercourse, such a tax violates Article 301 of the Constitution and therefore liable to be declared as unconstitutional. The Apex Court in Vijayalashmi Rice Mill's case [2006]147 STC 609: (2006)6 SCC 763 held that even in the case of Imposing cess for providing facilities like roads, bridges and storage facilities in rural areas, there must be a broad correlation between the fee being realized and the services rendered, even for traders who do their business in the State of Andhra Pradesh. Entry tax in Kerala, it may be noticed, is being collected only from persons who bring goods from outside the State while persons within the State are not burdened with the levy which is discriminatory and violative of Article 14 of the Constitution of India. The decision in Rajan's case [2003]133 STC 598 (Ker.); (1995)2 KLT 369 , in our view, is contrary to the principle laid down by the Apex Court in Jindal's case (2006)145 STC 544 (SC): (2006)6 SCC 241 and Vijayalashmi Rice Mill's case (2006)147 STC 609 : (2006)6 SCC 763 and is no longer good law. 27. We, therefore, hold that unless and until State discharges its burden by placing materials before Court that payment of compensatory tax is reimbursement/recompense, quantifiable/ measurable benefit provided or to be provided to the payers or there is any broad correlation between the entry tax being realized and the services rendered, it cannot sustain levy of entry tax. We are of the view, State has not discharged its burden by providing quantitative data on the basis of which compensatory tax is sought to be levied and the working test laid down in Automobile Transport's case AIR 1962 SC 1406 , Jindal Stainless Ltd.'s case [2006]145 STC 544 (SC): (2006)7 SCC 241 or Vijayalashmi Rice Mill's case [2006]147 STC 609 (SC): (2006)6 SCC 763 is not satisfied in these cases for levying entry tax." 29. Dr. Dr. Debiprasad Pal, learned senIor counsel appearing for the petitioners assailed the provision of Section 11 of the VAT Act and the amendment made therein levying tax on entry of goods mentioned in Schedule-III of the said Act as ultra vires of the Constitution of India which does not comply the requirement of Articles 301 and 304 of the Constitution. Learned counsel submitted that Article 301 subsequently provides that trade, commerce and intercourse throughout India shall be free. Article 301 contemplates freedom from such laws which restrict or affect activities of trade and commerce amongst the States. Learned counsel further submitted that Articles 304(a) and 304(b) carve out an exception to Article 301. Learned counsel referred the decision of the Supreme Court in Atiabari Tea Company case ( AIR 1961 SC 232 ) and submitted that freedom of trade guaranteed by Article 301 is freedom from all restrictions except those which are provided by the other Articles of Part-XIII of the Constitution. Learned counsel contended that restrictions can be imposed by the State Legislature only after satisfying the requirements of Article 304(b) of the Constitution, which means that such law should be in the public interest and reasonable. Learned counsel further developed his argument by referring Supreme Court decision in Automobile Transport (Rajasthan) Ltd.'s case ( AIR 1962 SC 1406 ) and submitted that only such taxes as directly and immediately restrict trade would fall within the purview of Article 301 and that any restriction in the form of taxes imposed on the carriage of goods or their movement by the State Legislature can only be done after satisfying the requirements of Article 304(b) of the Constitution. Mr. Pal then contended that a working test for deciding whether a tax is a compensatory or not is to enquire whether the trade is having the use of certain facilities for the better conduct of its business. Learned counsel submitted that two subsequent judgments in Bhagatram's case [1995 Supp. (1) see 673] and in Bihar Chamber of Commerce's case [ (1996)9 SCC 136 ] [: 1996(1) PLJR (SC)105] have been overruled by Constitution Bench judgment of the Supreme Court in Jindal Stainless Steel's case [ (2006)7 SCC 241 ]. Learned counsel submitted that two subsequent judgments in Bhagatram's case [1995 Supp. (1) see 673] and in Bihar Chamber of Commerce's case [ (1996)9 SCC 136 ] [: 1996(1) PLJR (SC)105] have been overruled by Constitution Bench judgment of the Supreme Court in Jindal Stainless Steel's case [ (2006)7 SCC 241 ]. Learned counsel referred relevant paragraphs of the judgment of the Supreme Court and submitted that when the tax is as a part of regulation or as a part of regulatory measures, its basis shifts from the concept of 'burden' to the concept of measurable/quantifiable benefit and then it becomes 'a compensatory tax' and its payment is then not for revenu'e but as reimbursement/recompense to the service/facility provider. 30. Learned counsel drawn our attention to Section 11 of the Act and the amendment made therein and submitted that maintaining of roads, providing bridges is not compensatory in nature so as to constitute special advantage or trade, commerce and intercourse. Even otherwise welfare State is bestowed with the responsibilities of providing good roads and bridges for the tax paying citizens and therefore levy of entry tax for these purposes are not justified. Learned counsel also attacked the provisions contained in Section 16 of the VAT Act which provides that Input tax in relation to a registered dealer to mean the tax charges under this Act by selling dealer to such dealer on the sale to him of any goods for resale or for use in manufacturing or processing of goods for sale or for directly use in mining or use as containers or packing materials or for the execution of works contract. Learned counsel submitted that once entry tax is made adjustable against the output tax payable by a dealer, it becomes abundantly clear that entry tax forms part of the consolidated fund of the State. Learned counsel submitted that after entry tax collected is merged in the general revenue of the State, it is neither possible nor conceivable that the proceeds of entry tax would be exclusively utilized by the Fund. 31. Last but not the least, learned counsel submitted that the amendment to Section 11 have been made effective from 1st April, 2006. The Trade Development Fund has been constituted only in March 2008. 31. Last but not the least, learned counsel submitted that the amendment to Section 11 have been made effective from 1st April, 2006. The Trade Development Fund has been constituted only in March 2008. Learned counsel submitted that in view of the establishment of Trade Development Fund in March 2008, the Legislature could not have made the amendment to Section 11 with retrospective effect. The retrospective amendment sought to be made by the State Legislature is irrational and arbitrary as there was no scope for utilization of the proceeds of entry tax by the fund, when the fund was constituted recently. 32. Mr. S.B. Gadodia, learned Advocate General on the other hand submitted that the relevant provisions of the VAT Tax Act relating to imposition of entry tax under facially and patently show that the levy of entry tax is compensatory in nature for the following reasons:- (i) The preamble of the Act. after amendment by 2007 Amendmcnl Act says that Value Added Tax Act is an Act to provide for and consolidate the laws relating to Value Added Tax on sale or purchase of goods and on entry of goods into local area in the State of Jharkhand and to create Jharkhand Trade Development Fund for the purpose of development of Trade, Commerce and Industry. Therefore, from reading of the preamble it is clear that this Act has been framed to create Jharkhand Trade Development Fund for the purpose of development of Trade. Commerce and Industry of the State. (ii) From perusal of Aims and Object of Jharkhand Value Added (Amendment) Bill, 2007 and Financial Memorandum appended to the aforesaid Bill, it is clear that amendments have been made in the Jharkhand Value Added Tax Act, 2005 for creating Jharkhand Trade Development Fund to give compensatory nature to the concept of Entry Tax under VAT. (iii) Newly added Section 2(xxi A) of the Act defines 'Fund' as created by the State Government through notification published in the official' gazette for the purpose of Development of Trade, Commerce and Industry. In fact, the 'Fund' has been created vide S.O. No. 48 dated 29.3.2008 by the Finance Department. (iv) That Section 11 of the Act is charging Section for entry of goods mentioned in Schedule-III of the Act on their entry into the State or into the Local Areas for the purpose of consumption, use and sale therein. In fact, the 'Fund' has been created vide S.O. No. 48 dated 29.3.2008 by the Finance Department. (iv) That Section 11 of the Act is charging Section for entry of goods mentioned in Schedule-III of the Act on their entry into the State or into the Local Areas for the purpose of consumption, use and sale therein. (v) Newly added sub-section (4) of Section 11 says that entry tax levied and collected under this section shall be appropriate into the fund i. e. Jharkhand Trade Development Fund as created under Clause (xxi A) of Section 2 of the Act. (vi) In Section 11 (5), tax payable under sub-section (1) shall continue to be levied till such time as is required to improve infrastructure within the State such as, Power, Road, Market condition etc. with a view to facilitate the better market condition for trade, commerce and industry. (vii) Under Section 11 (7), the State Government can, by notification, shall specify the manner of deposit of tax under appropriate Head of Account and the manner in which proceeds of the fund shall be utilized exclusively for the development of trade, commerce and industry of the State of Jharkhand. (viii) Finance Department of the State of Jharkhand has issued S.O. No. 48 dated 29.3.2008 creating Jharkhand Trade Development Fund, wherein in Part-2 it has been specified that proceeds of entry tax levied and collected under Section 11 of the Act shall be appropriated into the Fund." . 33. Learned counsel further submitted that notification clearly stipulates that a High Level Committee has been constituted for specifying the manner in which the proceeds of the fund shall be utilized. The Committee shall identify and sanction schemes to be completed from the proceeds of the fund keeping in view necessary facility and infrastructure to be created for the benefit of entry tax payers. According to the learned counsel that the entire amount of entry tax shall be appropriated and proceeds of the said tax shall be utilized exclusively for the development of trade, commerce and industry in the State. Learned Advocate General drawn our attention to Section 11 (6) of the Act and submitted that provision has been made for utilizing the proceeds of the fund exclusively for the development of trade, commerce and industry in the State of Jharkhand. Learned Advocate General drawn our attention to Section 11 (6) of the Act and submitted that provision has been made for utilizing the proceeds of the fund exclusively for the development of trade, commerce and industry in the State of Jharkhand. Learned Advocate General submitted that from reading of various sections of the Act and the amendment made therein and also notification the entry tax has become compensatory in nature and facial and patent test laid down by the Supreme Court in Jindal Stainless Ltd.'s case has been fully complied with. Learned counsel then submitted that since levy of entry tax is compensatory in nature, the same is not violative of Article 301 of the Constitution of India and the same does not need assent of the President of India under Article 304(b) of the Act. Learned counsel then submitted that vires of Entry Tax was challenged in the Patna High Court in the case of Indian Oil Corporation and Anr. vs. State of Bihar & Ors., (2007)10 VST 140 [: 2007(1) PLJR 502 ] and the Patna High Court upheld the vires of the Act holding that the Bihar Entry Tax Act as amended in 2006 is compensatory in nature. 34. Learned Advocate General then submitted that category of persons bringing goods from outside the State into the State of Jharkhand or any local areas as well as another category of persons who bring goods from one local area to another local area are similarly situated and these two categories of persons are not discriminated. According to the learned counsel, levy of entry tax on a person who brings goods from outside the State into the State of Jharkhand or any local area is identically the same as of any person who brings goods from one local area to another local area. Persons of both the categories have to pay entry tax at the rate of 4%. Learned counsel referred the decision of the Gujarat High Court in the case of Eagle Corporation Ltd. vs. State of Gujarat, (2007)6 VST 560 where the Court held that ultimate liability of the tax on both categories of persons bringing goods from outside the State and persons bringing goods from one local area to another local area of the State is the same. There is eventually no differentiation between the goods imported from outside the State or the goods moved from one local area to other local area. inside the State. Learned Advocate General submitted that entry tax is payable only by persons who bring goods from outside the State. There is no discrimination between the persons who bring goods from outside the State and pay entry tax. 35. Distinguishing the ratio decided by other High Courts on the issue whether levy of entry tax is compensatory in nature, learned Advocate General submitted that none of those provisions of different State Acts imposing entry tax facially and patently discloses that Act is compensatory in nature. On the contrary provisions of the VAT Act and Notification issued by the State Government patently and facially demonstrate that provisions are compensatory in nature and the entire fund collected on account of entry tax is kept separately in separate fund and the entire amount IS exclusively utilized for providing facilities to the tax payers. 36. As noticed above, the proposition of law has been set at rest by the Constitution Bench of the Supreme Court in Jindal Stainless limited's case (supra). The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. Under the principle of equivalence, as applicable to a fee or a compensatory tax, there is an indication of a quantifiable data, namely, a benefit which is measurable. As held by the Supreme Court, the basic difference between a tax, on one hand, and a fee/compensatory tax, on the other hand, is that the former is based on the concept of burden, whereas compensatory tax is based on the concept of recompense/reimbursement. For a tax to be compensatory, there must be some link between the quantum of tax and the facilities/services. The Supreme Court further obseNed and held that whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment, facially or patently. indicates quantifiable data on the basis of which, the compensatory tax is sought to be levied. The .Act must facially indicate the benefit which is quantifiable or measurable. If the Act does not indicate facially the quantifiable benefit. indicates quantifiable data on the basis of which, the compensatory tax is sought to be levied. The .Act must facially indicate the benefit which is quantifiable or measurable. If the Act does not indicate facially the quantifiable benefit. the burden will be on the State as a service/facility provider to show by placing the materials before the Court, that the payment of compensatory tax is a reimbursement for the quantifiable/measurable benefit provided or to be providec;f to its payers. 37. In the light of the ratio decided by the Constitution Bench of the Supreme Court in Jindal Stainless limited's case (supra), the relevant paragraphs of which have been quoted hereinabove, now I shall proceed to decide the constitutional validity of the provisions of Section 11 of the VAT Act as challenged in these writ petitions. 38. Section 11 of the Act is a charging Section. By amendment of Section 11, provision was made for levy of entry tax on import price and entry of goods mentioned in Schedule-III of the Act into State or into local areas for consumption, use or sale therein. Section 11 of the Act, as originally stood, ex facie is violative of provision of Articles 301 and 304 of the Constitution of India inasmuch as it imposes limitations and restrictions in the free movement of goods. 39. In course of hearing of the writ petitions, the State came with an amendment, namely, Jharkhand Value Added Tax Act (Amendment Act 2007). By the aforesaid amendment, sub-sections (4), (5), (6) and (7) have been inserted. According t6 sub-section (4), entry tax levied and collected shall be appropriated into funds. According to sub-section (6) of Section 11, the proceeds of the fund shall be utilized exclusively for the development of trade and industry in the State of Jharkhand. According to the provision, the fund collected is to be used for construction, development and maintenance of roads and bridges providing finances, aids, grants, subsidies to the financial, industrial and commercial units, creating infrastructure for supply of electrical energy and water supply to the industries, marketing and other commercial complexes, etc. 40. In 2008, a notification was issued by the Finance Department vide S.O. No. 48 dated 29th March, 2008 prescribing the procedures for levy of tax on import price on entry of goods into the State or on into the local areas for consumption, use or sale therein. 40. In 2008, a notification was issued by the Finance Department vide S.O. No. 48 dated 29th March, 2008 prescribing the procedures for levy of tax on import price on entry of goods into the State or on into the local areas for consumption, use or sale therein. In the said notification, the aforesaid purposes have been mentioned. 41. Admittedly, Section 11 of the Act has been introduced without obtaining pnor sanction of the President as required under the proviso to Article 304(b) of the Constitution of India. Save and except, the amendment brought in 2007 and notification issued in 2008, the respondent-State has not produced and placed any material before this Court showing that payment of compensatory tax is a reimbursement for the quantifiable/measurable benefit provided or to be provided to its payers. Prima facie, we do not find any quantifiable data i.e. a benefit which is measurable. Maintaining of roads, and providing bridges is not compensatory in nature so as to constitute special advantage to trade, commerce and intercourse. Undisputedly expenses for maintenance of construction of roads and bridges are met from the general revenue of the State. It is the statutory obligation and duty of the State to provide facilities, like roads and bridges, etc. Similarly, a statutory body, namely, State Financial Corporation, has been constituted under the State Financial Corporation Act for providing incentive and financial-aids to the industries. So far question of supply of electrical energy and waters to the industries, marketing and commercial complexes are concerned, it cannot be held that these are the special benefits to the trades men. In our opinion, the purposes for which the trade development fund has been created, do not directly facilitates trade and commerce. and do not specially benefits the trade people in the local areas for which such entry tax is collected. Curiously enough, the trade development fund has been created by notification dated 29th March, 2008 giving retrospective effect from 1st April, 2006. Nothing has been brought on record by the respondent-State to show that the entry tax collected from 1st April, 2006 till the date of notification has been utilized. In our considered opinion, therefore, levy of entry tax is discriminatory being violative of Article 304(a) of the Constitution of India. 42. Nothing has been brought on record by the respondent-State to show that the entry tax collected from 1st April, 2006 till the date of notification has been utilized. In our considered opinion, therefore, levy of entry tax is discriminatory being violative of Article 304(a) of the Constitution of India. 42. As stated above, no data or details have been placed by the State to show as to In what manner, entry tax so collected has been or being utilized. In the amended provision or in the notification issued pursuant to the said provision, no separate earmarked facility has been planned for the traders. Moreover, there is absolutely no correlation to the revenue generated under the Act and the expenditure incurred by the local authorities for providing the services. Whatever facilities sought to be provided by the Act and the notification, are either the constitutional obligation of the State or statutory duty of the Corporation and the local bodies constituted under the Act. 43. Having regard to the law discussed hereinabove, we, therefore, hold that Section 11 of the Jharkhand Value Added Tax Act, 2005 and the amendment made therein by Jharkhand VAT (Amendment) Act, 2007 is ultra vires and unconstitutional as being opposed to Article 301 of the Constitution and is not saved by Article 304 of the Constitution of India. 44. These writ petitions are accord. ingly allowed. However, in the facts of the case. there shall be no order as to costs. DK Sinha, J.-I agree.