JUDGMENT Ranjan Gogoi, J. 1. The validity of the Assam Entry Tax Act, 2008 and the Rules framed thereunder along with the provisions of the Assam Entry Tax (Amendment) Ordinance, 2008 have been questioned in this group of writ petitions. Consequently, all the writ petitions were heard together and are being answered by means of this common order. 2. Before adverting to the specific grounds of challenge as unfolded by the laborious arguments advanced on behalf of the contesting parties it will be useful to notice, though very briefly, the somewhat chequered history of the impugned legislation and the earlier challenges made before this Court as against the predecessor legislations. 3. The Assam Entry Tax Act, 2001 (hereinafter referred to as, "the Act of 2001") which is the predecessor legislation was brought into force with effect from October 1, 2001. The said Act which was enacted in exercise of powers under article 246 read with the entry 52 of List II of the Seventh Schedule to the Constitution of India had the following objects and reasons: Statement of objects and reasons It has come to the notice of the Government that many bulk consumers such as tea companies, oil companies, etc., take recourse to inter-State purchase of several items required for their own consumption with a view to availing benefit of lower rate of tax under the Central Sales Tax Act. This practice deprives the State of a substantial amount of revenue. 2. Further it is also observed that due to disparity in the rate of tax in different States, motor vehicles are purchased outside the State and then brought into the State for use. 3. In order to curb such losses of revenue and thereby mobilize additional resources, the Government have decided to levy tax on entry of selected items, including motor vehicles, which are imported into Assam from other States for own use and consumption: The Bill seeks to achieve above objects. 4. The Act of 2001 underwent several amendments commencing with the first amendment made effective from October 19, 2001 and culminating in the second Amendment Act with effect from May 12, 2005. The salient features of the principal Act of 2001 read with the amendments effected from time to time may now be briefly noticed. 2. Definitions.-(1) In this Act, unless the context otherwise requires: (a) ... The salient features of the principal Act of 2001 read with the amendments effected from time to time may now be briefly noticed. 2. Definitions.-(1) In this Act, unless the context otherwise requires: (a) ... (b) 'Entry of goods into a local area' with all its grammatical variations and cognate expressions means entry of the goods as specified in the Schedule into a local area from any place outside that local area including a place outside the State for consumption, use or sale therein: (c) 'Entry tax' means a tax on the entry of goods into a local area for consumption, use or sale therein, levied and payable in accordance with the provisions of this Act; (d) 'Importer' means a person who brings the goods as specified in the Schedule into a local area from any place outside that local area including a place outside the State for consumption, use or sale therein including for consumption or use of such goods in works contract; (e) 'Local area' means the area comprised within the limits of a local authority including any area which has been or may hereafter be included in the Municipal Corporation of Guwahati, constituted under the Guwahati Municipal Corporation Act, 1969 (Assam Act 1 of 1973) or in the Municipality or Town Committee constituted under the Assam Municipal Act, 1956 (Assam Act 15 of 1957) or any area comprised within a Gaon Panchayat or an Anchalik Panchayat constituted under the Assam Panchayat Act of 1994 (Assam Act XVIII of 1994). 3. Levy of tax.- (1) There shall be levied and collected an entry tax on the entry of goods specified in the Schedule into any local area for consumption, use or sale therein at such rate, not exceeding twenty per centum, as the State Government may, by notification, fix in this behalf and different rates may be fixed for different class or classes of specified goods and such tax shall be paid by every importer of such goods, whether he imports such goods on his own account or on account of his principal or any other person or takes delivery or is entitled to take delivery of such goods on such entry. (4) The State Government may, by notification in the Official Gazette, add to, delete, amend or otherwise modify the said Schedule and also may vary the rates of tax of the goods specified in the Schedule and thereupon the said Schedule shall be deemed to have been amended accordingly, [deleted by Assam Entry Tax (Second Amendment) Act, 2005 with effect from May 12, 2005] 5. Exemption from tax.-Notwithstanding anything contained in Section 3 and Section 4, and subject to production of documentary proof, no tax under this Act shall be levied in respect of the specified goods which are also subject to levy of taxes under the provisions of the Assam Value Added Tax Act, 2003- (i) if the sale of such specified goods inside the State, made by an importer are sales within the meaning of Clause (43) of Section 2 of the said Act, excepting sales falling under Sub-clauses (ii), (iii) and (iv) of the said clause and if he is liable to pay tax on such sales as a registered dealer under the Assam Value Added Tax Act, 2003 ; (ii) if the sale of such specified goods is made by the importer in the course of inter-State trade or commerce or in the course of export out of the territory of India or such goods are otherwise dispatched outside the State by way of stock transfer and if he is registered dealer under the Central Sales Tax Act, 1956. 8A. Subject to such condition as may be prescribed such sum of the proceeds of the tax as may be determined by the State Government shall be spent by the State Government for the purpose of development of trading facilities, maintenance of roads and other infrastructures in the local area." [introduced by the Assam Entry Tax (Second Amendment) Act, 2005 with effect from May 12, 2005]. 5. The provisions of the Act of 2001 as well as the amendments made thereto along with the several notifications issued under Section 3(4) of the Act of 2001, as it then existed, came to be challenged before this Court in a series of writ petitions, i.e., W. P. (C) No. 4774 of 2005 and other connected cases. 5. The provisions of the Act of 2001 as well as the amendments made thereto along with the several notifications issued under Section 3(4) of the Act of 2001, as it then existed, came to be challenged before this Court in a series of writ petitions, i.e., W. P. (C) No. 4774 of 2005 and other connected cases. By judgment and order dated November 17, 2006 [ITC Limited v. State of Assam [2007] 9 VST 250 (Gau)] a learned single judge of this Court allowed the writ petitions by holding the impugned levy to be violative of article 301 read with article 304(b) of the Constitution and further answered the specific point raised with regard to Section 3(4) of the Act by holding the said provision of the Act of 2001 to be suffering from the vice of excessive delegation. Aggrieved, the State preferred appeals in each of the writ petitions disposed of by the learned single judge, the lead case being Writ Appeal No. 462 of 2006. Several writ petitions raising the same questions were also filed by persons and entities who had not participated in the cases before the learned single judge. A Division Bench of this Court hearing the aforesaid writ appeals and writ petitions identified the following to be the core issues for determination in the cases under consideration [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gaui)]: (i) Whether impugned levy is discriminatory and violative of article 304(a) of the Constitution? (ii) Whether entry tax on the goods imposes restriction on its movement and hence violative of article 301 and whether requirements of article 304(b) have, therefore, to be complied with? (iii) Whether impugned levy is compensatory in nature? (iv) Whether subsequent amendments to the principal Act require Presidential sanction under article 304(b), although the Presidential sanction was granted prior to enactment of the principal Act? (v) Whether Section 3(4) of the impugned Act, as it stood till May 12, 2005, suffers from vice of excessive delegation of legislative functions? (vi) Whether omission of Section 3(4) in the impugned Act, by the Second Amendment Act, with effect from May 12, 2005, saves the actions taken under the said provisions of law, prior to May 12, 2005? (vii) Whether the judgment passed would have prospective effect? (viii) Whether refund of tax paid is permissible? 6. (vi) Whether omission of Section 3(4) in the impugned Act, by the Second Amendment Act, with effect from May 12, 2005, saves the actions taken under the said provisions of law, prior to May 12, 2005? (vii) Whether the judgment passed would have prospective effect? (viii) Whether refund of tax paid is permissible? 6. By judgment and order dated August 30, 20071 the Division Bench answered the questions arising in the writ petitions in the following manner: (1) The Act of 2001 prior to its amendment made with effect from October 19, 2001 was held to be discriminatory but such defect was held to have been cured by the amendment of Sections 2 (b) and (d) made with effect from the said date, i.e., October 19, 2001. (2) The Division Bench held that the entry tax imposed by the Act of 2001 is not compensatory in nature and that the same imposes restrictions on the free trade and commerce guaranteed by article 301 of the Constitution. (3) The Division Bench further held that the levy not being compensatory in nature, though the principal Act was enacted with prior Presidential sanction the subsequent amendments thereof did not have prior sanction of the President and, therefore, were violative of article 304(b) of the Constitution. (4) The Division Bench also held that Section 3(4) of the Act of 2001 did not suffer from the vice of excessive delegation. However, with the omission of the aforesaid Section 3(4) with effect from May 12, 2005 by the Second Amendment, while the collection of tax already made would not be affected all pending proceedings would become null and void. (5) The judgment of the Division Bench, it was held, would be prospective in operation. However, insofar as refund is concerned the Division Bench was of the view that the question of refund should be kept open for decision by the authority. Accordingly, the direction for refund as made by the learned single judge stood modified. In view of the findings reached, the Division Bench, naturally, interfered with all the notifications issued under Section 3(4) of the Act as impugned in the writ petitions. 7. Aggrieved by the aforesaid judgment and order dated August 30, 2007 [See State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. In view of the findings reached, the Division Bench, naturally, interfered with all the notifications issued under Section 3(4) of the Act as impugned in the writ petitions. 7. Aggrieved by the aforesaid judgment and order dated August 30, 2007 [See State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gaui)] passed by the Division Bench, the State of Assam filed special leave petitions before the honourable Supreme Court which were registered and numbered as SLP (C) Nos. 24934 to 25066 of 2007. The aforesaid special leave petitions are presently pending before the apex court. 8. During the pendency of the aforesaid special leave petitions the Assam Entry Tax Bill, 2008 was placed before the State Legislature with the following objects and reasons: Statement of Objects and Reasons The Assam Entry Tax Bill, 2008 seeks to levy and collect entry tax on the entry of certain goods into a local area for consumption, use or sale therein to facilitate trade and commerce. The Bill also seeks to create a fund, namely, the Assam Trade Development Fund into which the proceeds of the entry tax minus the cost of collection shall be credited and which shall be utilised exclusively for the development of infrastructure or amenities to facilitate trade, commerce and intercourse and it shall include the following- (a) Construction, development and maintenance of roads and bridges for linking the market and commercial areas to their hinterland. (b) Creation, development and maintenance of infrastructure for supply of electrical energy, water supply and sanitation and other infrastructure for furtherance of trade or commerce and intercourse. (c) Any other purpose connected with the development of trade and commerce and facilities relating thereto. (d) Providing finance, aid, grants and subsidies to local bodies and Government agencies for the aforesaid purposes. The Bill also seeks to transfer the proceeds of entry tax already collected under the Assam Entry Tax Act, 2001, after deducting therefrom the sum already utilised for aforesaid purposes, to the Assam Trade Development Fund and utilize this amount for the aforesaid purposes. Further, the Bill seeks to repeal the Assam Entry Tax Act, 2001. It seeks to save the actions already taken under the Assam Entry Tax Act, 2001. 9. The aforesaid Bill was passed by the State Legislature and received the assent of the honourable Governor on April 13, 2008. Further, the Bill seeks to repeal the Assam Entry Tax Act, 2001. It seeks to save the actions already taken under the Assam Entry Tax Act, 2001. 9. The aforesaid Bill was passed by the State Legislature and received the assent of the honourable Governor on April 13, 2008. Thereafter, in exercise of the powers under Section 1(3), the Governor of Assam has been pleased to appoint June 1, 2008 as the date on which the aforesaid Act was to come into force. It may be noticed, at this stage, that by the Assam Entry Tax (Amendment) Ordinance, 2008 which has also been challenged in the present group of cases the Act of 2008 has been brought into force with effect from October 1, 2001, i.e., the date with effect from which the Act of 2001 came into force. By the aforesaid Ordinance certain other amendments have been made in the Act of 2008, details of which will be noticed later. 10. At this stage, it will be apposite to notice the salient features of the Act of 2008 along with the amendments sought to be introduced by the Assam Entry Tax (Amendment) Ordinance, 2008: Long title.-An Act to levy a tax on the entry of goods into any local area in Assam for consumption, use or sale therein for the purpose of providing the infrastructure and amenities to facilitate trade and commerce within the State of Assam and to validate certain taxes imposed on entry of goods into any local area in Assam for consumption, use or sale therein and for the matters connected thereto or incidental thereto. Preamble : Whereas it is expedient to provide for the imposition of a tax on the entry of goods into any local area in Assam for consumption, use or sale therein for the purpose of providing the infrastructure and amenities to facilitate trade and commerce within the State of Assam and to validate certain taxes imposed on entry of goods into any local area in Assam for consumption, use or sale therein and for matters connected therewith or incidental thereto. 2. Definitions.-(1) In this Act, unless the context otherwise requires,- (a) ... 2. Definitions.-(1) In this Act, unless the context otherwise requires,- (a) ... (b) 'Entry of goods into a local area' with all its grammatical variations and cognate expressions, means, entry of goods as specified in the Schedule into a local area from any place outside that local area including a place outside the State for consumption, use or sale therein ; (c) 'Entry tax' means a tax on the entry of goods into a local area for consumption, use or sale therein, levied and payable in accordance with the provisions of this Act ; (d) 'Fund' means the Assam Trade Development Fund ; (e) 'importer' means a dealer or any other person, who in any capacity, whether on his own account or on account of a principal or any other person, effects or causes to be effected the entry of goods as specified in the Schedule into a local area or takes delivery or is entitled to take delivery of goods on its entry into a local area for consumption, use or sale therein and includes,: (i) every person who carries on the business of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (ii) every person who carries on business of transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. Explanation.-In case of any goods specified in the Schedule, which is transported through pipelines into a local area, the ultimate recipient of the goods in the local area shall be deemed to be the importer; (g) 'Local area' means any area of the State within the limits of any local authority including any area under- (i) Municipal Corporation of Guwahati, constituted under the Guwahati Municipal Corporation Act, 1969 (Assam Act I of 1973); or (ii) Municipality or Town Committee constituted under the Assam Municipal Act, 1956 (Assam Act 15 of 1957) ; or (iii) Gaon Panchayat or an Anchalik Panchayat or a Zilla Parishad constituted under the Assam Panchayat Act, 1994 (Assam Act 18 of 1994) ; or (iv) North Cachar Hills Autonomous Council or Karbi Anglong Autonomous Council and Bodoland Territorial Council; or (v) Any other local authority, by whatever name called, constituted or continued under an Act of the Parliament or the State Legislature. 3. 3. Levy of tax.-(1) Subject to the other provisions of this Act, there shall be levied and collected an entry tax on the entry of specified goods into any local area for consumption, use or sale therein, at the rates respectively specified against each item in the Schedule. The entry tax shall be leviable on the import value of the specified goods and shall be paid by every importer of such goods: Provided that no entry tax shall be levied under this section on the entry of specified goods into a local area, if it is proved to the satisfaction of the assessing authority, in such manner as may be prescribed, that such goods have already been subjected to entry tax or that the entry tax has been paid by the importer or any other person under this Act in respect of the same goods. (2) Notwithstanding anything contained in Sub-section (1), and subject to production of documentary proof, no entry tax shall be levied on such specified goods, which are also taxable under the Assam Value Added Tax Act, 2003 (Assam Act 8 of 2003),- (i) if such specified goods are brought into any local area by a dealer registered under the Assam Value Added Tax Act, 2003 for the purpose of resale and such goods are sold inside the State and the dealer is liable to pay tax on the sales of such goods under the Assam Value Added Tax Act, 2003 (Assam Act 8 of 2003) ; (ii) if such specified goods are sold in the course of inter-State trade or commerce or in the course of export out of the territory of India or such goods are otherwise despatched outside the State by way of stock transfer by a dealer registered dealer under the Central Sales Tax Act, 1956 (Central Act 74 of 1956); (iii) if such specified goods are imported into a local area in the course of import from outside the territory of India: Provided that, if any such dealer, after importing the specified goods, consumes such goods in any form or deals with such goods in any other manner, he shall inform the assessing authority before the 21st day of the month, succeeding the month in which such goods are so consumed or dealt with and pay the tax, which would have been otherwise leviable under the provisions of this Act. (3) Where the specified goods, the sales of which are exempted under the Assam Value Added Tax Act, 2003 (Assam Act 8 of 2003) for reasons of such goods being included in the First Schedule to the said Act, which after entry into a local area are sold by an importer in the course of inter-State trade or commerce or in the course of export out of the territory of India or are dispatched outside the State by way of stock transfer, the import value of such specified goods subsequently sold or sent out in the manner mentioned above shall, subject to production of proof, be deducted from the total import value to determine the taxable import value. (4) The State Government may, by notification in the Official Gazette, in the public interest or taking into account the infrastructure and amenities provided or to be provided to facilitate trade and commerce, vary the rates of tax of the specified goods and on such notification being issued, the Schedule shall be deemed to have been amended accordingly: Provided that the rate of tax to be specified or varied by the State Government in respect of any such goods shall not exceed twenty per centum. 10. Utilisation of the proceeds of the levy under the Act.-(1) The proceeds of the entry tax minus cost of collection, shall be credited and appropriated to the fund constituted under this Section by notification in the Official Gazette and shall be utilised exclusively for the development of infrastructures or amenities to facilitate trade, commerce and intercourse and it shall include the following: (a) construction, development and maintenance of roads and bridges for linking the market and commercial areas to their hinterlands, (b) creation, development and maintenance of infrastructure for supply of electrical energy, water supply and sanitation and other infrastructure for furtherance of trade, commerce and intercourse, (c) any other purpose connected with the development of trade and commerce or for facilities relating thereto which the State Government may specify by notification, (d) providing finance, aids, grants and subsidies to local bodies and Government agencies for the purposes specified in Clauses (a), (b) and (c). (2) The amount realised as entry tax shall not be used for the purposes other than those specified in Sub-section (1). (2) The amount realised as entry tax shall not be used for the purposes other than those specified in Sub-section (1). (3) The State Government shall transfer the proceeds of entry tax already collected under Assam Entry Tax Act, 2001, after deducting therefrom, the sum utilised under Clauses (a) to (d) of Sub-section (1) to the fund constituted under this Act and such amount on being transferred to the fund shall be utilised for the purposes specified in Sub-section (1). (4) The tax under this Act shall be continued to be levied till such time as is required to improve the infrastructure or amenities to facilitate trade and commerce. 12. Validation.-Notwithstanding anything contained in any judgment, decree or order of any court or other authority to the contrary, entry tax levied or collected or purported to have been levied or collected under the Assam Entry Tax Act, 2001 (Assam Act 4 of 2001), as amended from time to time, and all actions taken, things done, rules made, notifications issued or purported to have been taken, done, made or issued under the said Act shall, for all purposes, be deemed to be and to have always been validly levied, collected, taken, done, made or issued under the provisions of this Act, as if this Act were in force at all material times and accordingly,- (a) no suit or other proceeding shall be maintained or continued in, or before any court, Tribunal or other authority for the refund of any amount received or realised by way of such tax ; (b) no court, Tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such tax ; (c) any proceeding, act or thing which could have been validly taken, continued or done for the levy or collection of such tax at any time under the provisions of the said Act but which had not been taken, continued or done, may be taken, continued or done. 13. Repeal and saving.-(1) The Assam Entry Tax Act, 2001 (Assam Act 4 of 2001) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the Act so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act, as if this Act were in force at all material times. 11. Repeal and saving.-(1) The Assam Entry Tax Act, 2001 (Assam Act 4 of 2001) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the Act so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act, as if this Act were in force at all material times. 11. The following provisions of the Assam Entry Tax Rules, 2008 as framed 11 in exercise of the rule-making power vested by Section 11 of the Act may also be noticed. 11. Administration of Assam Trade Development Fund.-(1) The tax shall be deposited in a separate, distinct and exclusive Head of Account 0042-106-Tax on Entry of Goods into local area'. The amount so deposited shall constitute the Assam Trade Development Fund. (2) Budget provisions shall be made and shown separately under the expenditure heads of account of the Departments concerned with the activities mentioned in Sub-section (1) of Section 10 of the Act. The total allocation of such budget provisions in a financial year shall not be less than the amount collected as entry tax minus cost of collection during the year. (3) The concerned Department shall approve schemes and sanction funds exclusively for the development of infrastructure or amenities to facilitate trade, commerce and intercourse. 12. The salient features of the impugned Act and Ordinance of 2008 as well 12 as the provisions of the Act of 2001 having been noted, the court would like to proceed to understand the specific grievances of the writ petitioners in each of these cases as against the aforesaid Act and Ordinance of 2008. The elaborate arguments advanced by the learned Counsel for the petitioners, details of which will be noted hereinafter, make it clear that three issues, in the main, arise for determination in the present case. The first is with regard to the validity of the extended meaning of the expression "importer" in so far as the specified goods transported through pipelines into a local area, as contained in the Explanation to Section 2(e) of the Act of 2008, is concerned. The second and the most contentious issue in the case is whether the entry tax levied by the Act of 2008 is a compensatory tax so as to obviate the requirement of prior sanction of the President under the proviso to article 304(b) of the Constitution. The second and the most contentious issue in the case is whether the entry tax levied by the Act of 2008 is a compensatory tax so as to obviate the requirement of prior sanction of the President under the proviso to article 304(b) of the Constitution. The next issue arising in the case is with regard to the validation of the entry tax levied or collected under the provisions of the Act of 2001, which has been declared to be ultra vires the Constitution by a Division Bench of this Court in Writ Appeal No. 462 of 2006 and other connected cases [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)]. In this regard the validity of the provisions of the Amendment Ordinance giving effect to the provisions of the Act of 2008 from October 1, 2001, i.e., the date of coming into force of the Act of 2001 would also arise for consideration of the court. In this regard, specifically, the validity of the Ordinance, which has the effect of making items taxable with effect from October 1, 2001, though introduced in the Schedule to the Act of 2001 with effect from subsequent dates, would be a co-incidental question that would require an answer from the court. 13. Dr. AK Saraf, learned Senior Counsel appearing for the writ petitioners in a group of cases including W. P. (C) No. 2452 of 2008 wherein the issue concerning the extended meaning of the expression "importer" is involved, had offered the lead argument in the case. Dr. Saraf has argued that in so far as the crude oil transported through pipelines is concerned, the petitioner in W. P. (C) No. 2452 of 2008, is the mere recipient of the said crude oil at the refinery point. The pipelines have been laid by the Oil and Natural Gas Commission and the Oil India Limited (hereinafter referred to as "the ONGC" and "OIL") which organizations are responsible for maintenance and upkeep and security of the pipelines. The crude oil is transported by the said organizations to the refineries owned by the petitioner in W. P. (C) No. 2452 of 2008. The said petitioner is in no way connected with the transportation of the crude oil or with the pipelines in question. In such a situation, according to Dr. The crude oil is transported by the said organizations to the refineries owned by the petitioner in W. P. (C) No. 2452 of 2008. The said petitioner is in no way connected with the transportation of the crude oil or with the pipelines in question. In such a situation, according to Dr. Saraf, there is no justification for treating the petitioner as an "importer" of the crude oil merely on account of the receipt of the same by the petitioner at the refinery. 14. Continuing, Dr. Saraf has referred to the affidavit of the respondents dated August 8, 2008, wherein in paragraph 4, it has been stated that entry tax is a tax simpliciter. Drawing support from the said statement of the respondents as made in the affidavit filed as well as by placing before the court the provision of Section 3(2)(i) of the Act, Dr. Saraf has contended that entry tax has really been levied by the Act of 2008 in lieu of value added tax (VAT), inasmuch as, under the aforesaid provision of the Act of 2008 no entry tax is leviable in a situation where VAT has been paid. In this regard, Dr. Saraf has also referred to the Budget speech of the year 2008-09 presented by the honourable Chief Minister of the State (Finance Minister) to the State Assembly wherein in paragraphs 35.3 and 35.4, reference has been made to the loss of revenue collection on account of striking down of the Act of 2001 by the Division Bench of this Court in Writ Appeal No. 462 of 2006 and other connected cases [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)]. In the course of his arguments, Dr. Saraf has also contended the entry tax sought to be levied by the Act of 2008 to be discriminatory by citing the example of goods manufactured within a local area which would be exempt from payment of entry tax and those manufactured outside the local area which would be amenable to the provisions of the Act if moved to the local area for consumption, use or sale. 15. In so far as the question whether entry tax is compensatory or not is 15 concerned, Dr. 15. In so far as the question whether entry tax is compensatory or not is 15 concerned, Dr. Saraf, learned Senior Counsel for the petitioner, has taken pains to trace the long history of judicial enunciation of the provisions contained in Chapter XIII of the Constitution and the evolution and development of the concept of compensatory tax. Learned Counsel has placed before the court the Constitution Bench judgment in Atiabari Tea Co. Ltd. v. State of Assam [1961] 1 SCR 809, wherein the apex court laid down that "... restrictions, freedom from which is guaranteed by article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301 ..." Citing another Constitution Bench judgment in the case of Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491, Dr. Saraf has submitted that in the aforesaid judgment the concept of regulatory measure or compensatory tax was evolved to take out such a measure from the requirement contained in the proviso to article 304(b) of the Constitution. The following observation of the apex court has been particularly stressed upon by Dr. Saraf to contend that taxing provision to be compensatory must conform to the requirement spelt out by the apex court: ... Whether a tax is compensatory or not cannot be made to depend on the preamble of the statute imposing it. Nor do we think that it would be right to say that a tax is not compensatory because the precise or specific amount collected is not actually used in providing any facilities. It is obvious that if the preamble decided the matter, then the mercantile community would be helpless and it would be the easiest thing for the Legislature to defeat the freedom assured by article 301 by stating in the preamble that it is meant to provide facilities to the tradesmen. Likewise actual user would often be unknown to tradesmen and such user may at sometime be compensatory and at others not so. Likewise actual user would often be unknown to tradesmen and such user may at sometime be compensatory and at others not so. It seems to us that a working test for deciding whether a tax is compensatory or not is to enquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities. It would be impossible to judge the compensatory nature of a tax by a meticulous test, and in the nature of things that cannot be done. 16. Continuing, Dr. Saraf has argued that the working test laid down in Automobile Transport ltd. [1963] 1 SCR 491 continued to hold the field until in Bhagatram Rajeev Kumar v. Commissioner of Sales Tax 1994 (4) SCALE 1103 and in State of Bihar v. Bihar Chamber of Commerce [1996] 2 SCR 184, the apex court was seen to have made a departure by holding that "some connection" between the impost and the benefit derived would be sufficient for the levy to partake the character of compensatory tax. The aforesaid view of the apex court in Bhagatram Rajeev Kumar 1994 (4) SCALE 1103 and Bihar Chamber of Commerce [1996] 2 SCR 184came to be tested by another Constitution Bench in Jindal Stainless ltd. v. State of Haryana [2006] 283 ITR 1(SC) . The "some connection" theory as evolved in Bhagatram Rajeev Kumar 1994 (4) SCALE 1103 and Bihar Chamber of Commerce [1996] 2 SCR 184stood disapproved and the law laid down in Automobile Transport Ltd. [1963] 1 SCR 491 was reiterated. In Jindal Stainless ltd. [2006] 283 ITR 1(SC) while reiterating the law laid down in Automobile Transport Ltd. [1963] 1 SCR 491, the apex court had necessarily to express its detailed views in the matter. It is the argument of the learned Counsel for the petitioner that the entry tax levied by the Act of 2008 does not satisfy the tests laid down in Jindal Stainless ltd. [2006] 283 ITR 1(SC) and, therefore, the impost in question is not a compensatory tax. 17. In the above context, Dr. Saraf has drawn the attention of the court to the provisions of Section10 of the Act of 2008 on the basis of which the State would like the court to understand that the levy, indeed, is compensatory. However, according to Dr. 17. In the above context, Dr. Saraf has drawn the attention of the court to the provisions of Section10 of the Act of 2008 on the basis of which the State would like the court to understand that the levy, indeed, is compensatory. However, according to Dr. Saraf, what is contemplated by the provision of Section 10 of the Act lie within the parameters of the general duties of the State, which, it is, otherwise obliged to provide and perform. Therefore, according to Dr. Saraf, the Act of 2008 does not facially show any quantifiable benefit to the tax-payer as a recompense for what is being provided. Consequently, according to the learned Counsel, one of the cardinal tests laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) is not met in the present case. Furthermore, according to Dr. Saraf, though in terms of the law laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC), it is open for the State to lay before the court positive materials to show what facility is being provided to the tax-payer no such materials have been forthcoming in any of the affidavits filed in the present case. Rather, according to Dr. Saraf, the facts stated in the affidavit dated August 8, 2008 clearly indicate that though a sum of Rs. 250 crore has been earmarked for the annual budget 2008-09 for allotment to different Departments purportedly for infrastructural development of the local area it has been virtually admitted in the said affidavit that no specific or concrete plan as to how and in what manner the amount will be spent has been drawn up. 18. Additionally, Dr. Saraf has contended that under Section 3(1) of the Act, 18 the rate of tax is ad valorem, i.e., progressive, which is a strong circumstance that would go against the levy being compensatory. In this regard Dr. Saraf has further contended that ad valorem rate of entry tax does not logically explain what specific facilities will be enjoyed by the importer of goods carrying a higher rate of tax. Therefore, a progressive rate of entry tax does not satisfy the test laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) . 19. Another dimension of the challenge projected by Dr. Saraf, learned 19 Senior Counsel for the petitioner, has been with regard to the provisions contained in Section 3(2)(ii) of the Act. Dr. Therefore, a progressive rate of entry tax does not satisfy the test laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) . 19. Another dimension of the challenge projected by Dr. Saraf, learned 19 Senior Counsel for the petitioner, has been with regard to the provisions contained in Section 3(2)(ii) of the Act. Dr. Saraf has pointed out that by virtue of the said provision, goods coming into a local area, which are subsequently sold in the course of inter-State sale by the importers alone, are exempted from payment of entry tax. Goods entering into a local area by virtue of inter-State trade are, however, not so exempted. This, according to Dr. Saraf, violates article 286 of the Constitution. In this regard Dr. Saraf has also contended that a tax covered by any of the fields enumerated in the List II of the Seventh Schedule to the Constitution, i.e., entry 52 herein cannot have the effect of trenching upon the field covered by another entry of the same list, i.e., entry 54. 20. In so far as the validating effect of the Act of 2008 is concerned, Dr. Saraf 20 has contended that the tax collected under the Act of 2001 having been declared to be unconstitutional by the Division Bench in Writ Appal No. 462 of 2006 and other connected cases [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)] and directions for refund, though qualified, having been passed by the Division Bench, the aforesaid collection of tax cannot be legitimised as has been purported to be done by Section 12 of the Act of 2008. Lastly, Dr. Saraf has argued that the Ordinance of 2008 has been issued in colourable exercise of powers and is contrary to the proviso to article 304(b) of the Constitution. Dr. Saraf, learned Senior Counsel for the petitioner, has also questioned the necessity of the Ordinance at the point of time it came to be issued as well as the satisfaction therefor. 21. The arguments advanced by Dr. Saraf, learned Senior Counsel for the petitioner have been largely adopted by Sri G. N. Sahewalla, Sri G. K. Joshi and Dr. B. P. Todi, learned Counsel appearing for some of the writ petitioners. While Dr. 21. The arguments advanced by Dr. Saraf, learned Senior Counsel for the petitioner have been largely adopted by Sri G. N. Sahewalla, Sri G. K. Joshi and Dr. B. P. Todi, learned Counsel appearing for some of the writ petitioners. While Dr. Todi has specifically argued that Section 3(2)(ii) of the Act is contrary to article 286 of the Constitution, Sri G. N. Sahewalla and Sri G. K. Joshi, learned Senior Counsel for the petitioners have drawn the attention of the court to the different dates with effect from which the various items in the Schedule to the Act of 2008 were included in the Schedule to the Act of 2001. On the said basis, learned Counsel have additionally urged that the Ordinance of 2008, amending Section 1(3) of the Act of 2008 to be invalid. As already noticed by the Ordinance of 2008, the Act of 2008 has been made effective from October 1, 2001, i.e., the date of coming into force of the Act of 2001. 22. Sri N. Dutta, learned Senior Counsel appearing for the petitioners in another group of writ petitions while adopting the arguments advanced by Dr. Saraf, has offered certain additional arguments which must be taken note of Sri Dutta has contended that under the provisions of the Act, the entry tax collected from local area can be utilised for development of the infrastructure of another area without there being any guideline in the Act or the Rules in the matter. Sri Dutta has further argued that no materials have been laid before the court by the respondent-State to show the details of the amount collected and what has been allotted or proposed to be allotted in the absence of which there is no discernible quantifiable benefit to the tax-payer as a measure of recompense for what is being provided. Therefore, according to Sri Dutta, the cardinal test laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) has not been met in the present case. Tracing the history of entry 52 of List II of the Seventh Schedule and placing the provision of entry 49 of the Government of India Act, 1935, Sri Dutta has submitted that any levy covered by entry 52 is meant for allotment to the local bodies to enable such bodies to carry on their activities. Such a levy, therefore, according to Sri Dutta, can never be compensatory. 23. Such a levy, therefore, according to Sri Dutta, can never be compensatory. 23. Placing the decision of the apex court in Shri Prithivi Cotton Mills Ltd. 23 v. Broach Borough Municipality reported in [1971] 79 ITR 136(SC), Sri Dutta has submitted that two conditions must be satisfied before a validation statute can take legal effect. The first is that the Legislature must possess the power to impose the tax and secondly the grounds for which the impost was earlier declared to be illegal or invalid, must be removed/cured. Relying on another judgment of the apex court in J. N. Saksena v. State of Madhya Pradesh reported in (1976) II LLJ 154 SC, Sri Dutta has submitted that the validating law has to be judged with reference to a further test, i.e., that it is consistent with the provisions of Part III of the Constitution. In this regard Sri Dutta has submitted that by Section 13 of the Act of 2008, the Entry Tax Act of 2001, which has already been adjudged to be unconstitutional, has been repealed and furthermore Section 12 of the Act has nullified the legal remedies of a payer of entry tax, which has been adjudged to be illegally levied. In this regard Sri Dutta has also pointed out that the Division Bench of this Court having already directed for consideration of claims of refund, the payers of the tax, illegally collected, have a remedy by way of a civil action against such order that may be passed in the refund proceedings. The Act of 2008 having barred a civil suit, according to Sri Dutta, is repugnant to the provisions of a Central enactment, i.e., the Code of Civil Procedure. 24. Learned Counsel for the petitioners have also relied on the decisions of 24 several High Courts in cases involving the validity of the provisions of the Entry Tax Act applicable in those States. 24. Learned Counsel for the petitioners have also relied on the decisions of 24 several High Courts in cases involving the validity of the provisions of the Entry Tax Act applicable in those States. In particular, reference has been made to the decision of the Jharkhand High Court in Tata Iron & Steel Company Ltd. v. State of Jharkhand [2007] 6 VST 587, the decision of the Kerala High Court in Thressiamma L. Chirayil v. State of Kerala [2007] 7 VST 293, the decision of the Madras High Court in ITC Limited v. State of Tamil Nadu [2007] 7 VST 367 besides the decision of the Allahabad High Court in Indian Oil Corporation Limited v. State of Uttar Pradesh [2007] 10 VST 282. In all the aforesaid decisions the honourable High Courts had interfered with the levy on the ground that the same is not compensatory in nature and, therefore, the requirement spelt out by the proviso to article 304(b) of the Constitution had to be met. Learned Counsel for the petitioners, in their characteristic fairness, have also referred to a decision of the Karnataka High Court in Manipal Academy of Higher Education v. State of Karnataka [2008] 13 VST 377 as well as another decision of the Patna High Court in Indian Oil Corporation Limited v. State of Bihar [2007] 10 VST 140, besides the recent pronouncement of the Madhya Pradesh High Court in Godfrey Philips India Ltd. v. State of M.P. [2008] 17 VST 465 wherein the levy of entry tax has been upheld though a serious attempt had been made to persuade the court not to subscribe to the views expressed in the aforesaid later judgments. 25. Controverting the arguments advanced by the learned Counsel for the petitioners including Mr. G. K. Joshi and Dr. B. P. Todi, learned Senior Counsel, Sri K. N. Choudhury, learned Additional Advocate-General, Assam, has, at the outset, sought to explain the basis of the earlier judgment of the Division Bench of this Court in Writ Appeal No. 462 of 2006 and other connected cases. Sri Choudhury has pointed out that in the judgment dated August 30, 20071 the Division Bench taking note of the first amendment to the Act of 2001 effective from October 19, 2001 held the levy in question not to be discriminatory except for the period the Act of 2001 was in force prior to its first amendment. Sri Choudhury has pointed out that in the judgment dated August 30, 20071 the Division Bench taking note of the first amendment to the Act of 2001 effective from October 19, 2001 held the levy in question not to be discriminatory except for the period the Act of 2001 was in force prior to its first amendment. Sri Choudhury has submitted that thereafter the Division Bench took the view that even if the levy was not discriminatory it was incumbent on the State to prove that the restrictions imposed were reasonable and in public interest, which burden the State had not been able to satisfactorily discharge. 26. Sri Choudhury has further submitted that notwithstanding the aforesaid finding the Act of 2001 could still be saved if the levy in question was compensatory. However, the Division Bench answered the said question against the State. In doing so the Bench took note of the provisions of Section 8Ainserted by the Second Amendment Act of 2005 with effect from May 12, 2005 and the materials placed in the affidavit of the State. In this regard, Sri Choudhury has submitted that on the basis of the materials available before the Division Bench, a conclusion was reached that the State had not furnished detailed particulars of the infrastructure facilities provided for or intended to be provided to substantiate the stand taken that the impugned levy is compensatory in nature. 27. Sri Choudhury has also submitted that the provisions for infrastructure facilities like laying of roads and maintenance thereof, as pleaded by the State in its affidavit before the Division Bench in W.A. No. 462 of 2006 [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)] and other connected cases, were held to be relatable to the sovereign functions of the State which facilities the State is bound to provide irrespective of the fact whether any entry tax is levied or not. Ltd. [2008] 15 VST 70 (Gau)] and other connected cases, were held to be relatable to the sovereign functions of the State which facilities the State is bound to provide irrespective of the fact whether any entry tax is levied or not. Sri Choudhury has further pointed out that the court also took note of the fact that under Section 8A of the Act the State Government had been empowered to spend such amount of the tax collected for the purpose of development of trading facilities, maintenance of road and other infrastructure facilities in the local areas without there being any laid-down parameters for determination of the amounts to be spent under different heads which aspect of the matter had been left to be determined by the State Government by the Act of 2001. According to Sri Choudhury, it is in the aforesaid circumstances that the Division Bench came to the conclusion that the impugned levy was not compensatory either on the face of the provisions contained in the Act or on the basis of the materials laid before the court. Consequently, the court came to the conclusion that though the principal Act had prior Presidential sanction as required under the proviso to article 304(b) of the Constitution, as all subsequent amendments to the Act did not have such prior Presidential sanction the said amendments along with the notifications issued thereunder were void and unconstitutional. 28. It is the further submission of Sri Choudhury that the validity of the Act 28 of 2008 cannot be judged by the findings recorded and the conclusions reached by the Division Bench in W. A. No. 462 of 2006 and other connected cases [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)] and that the said question has to be decided independently on the basis of the provisions of the Act of 2008 as well as the materials laid before the court by the State in its affidavits filed in the present group of cases. 29. Unfolding the aforesaid argument, the learned Additional Advocate- 29 General, Assam, has placed before the court the long title and the Preamble to the Act of 2008 along with the Statement of Objects and Reasons, details of which have been extracted above, to contend that the Act of 2008 is compensatory in nature. 30. 29. Unfolding the aforesaid argument, the learned Additional Advocate- 29 General, Assam, has placed before the court the long title and the Preamble to the Act of 2008 along with the Statement of Objects and Reasons, details of which have been extracted above, to contend that the Act of 2008 is compensatory in nature. 30. Sri Choudhury, learned Additional Advocate-General, Assam, has also 30 placed before the court the provisions contained in Section 10 of the Act of 2008 by which the defects in the Act of 2001, which had led the Division Bench to declare the said enactment to be unconstitutional, have been sought to be cured/corrected. Comparing the provisions of Section 10 of the Act of 2008 and Section8A of the Act of 2001, which was considered by the earlier Division Bench, Sri Choudhury has submitted that what is contemplated by Section 10 of the Act of 2008 goes far beyond the purposes contemplated by Section 8A of the Act of 2001. In this regard, Sri Choudhury has submitted that the proceeds of the entry tax are to be credited and appropriated to a special fund and is to be utilised for the development of infrastructure and for making of provisions for amenities to facilitate trade, commerce and intercourse in the specific areas enumerated in Section 10(1)(a) to 10(1)(d). Sri Choudhury has further pointed out that under Section 10(2) the amount realised as entry tax is not to be used for any other purpose than those specified in Section 10(1)(a) to 10(1)(d). Furthermore, all proceeds of entry tax collected under Act of 2001 are to be transferred to a special fund. Pointing out the provisions of rule 11 of the Rules, the learned Additional Advocate-General has drawn the attention of the court to the creation of a special fund, i.e., Assam Trade Development Fund into which the amount collected by way of entry tax is to be deposited under a separate, distinct and exclusive head of accounts. 31. Referring to the affidavit dated August 8, 2008 filed by the respondents, Sri Choudhury has pointed out that in the budget for the year 2008-09 a sum of Rs. 31. Referring to the affidavit dated August 8, 2008 filed by the respondents, Sri Choudhury has pointed out that in the budget for the year 2008-09 a sum of Rs. 250 crores has been earmarked for development of infrastructure to facilitate trade, commerce and intercourse in the local areas of the State and out of the amount so earmarked diverse amounts have been allocated to different Departments like PWD ; Guwahati Development Department; Town and Country Planning Department; Panchayat and Rural Development Department; Public Health Engineering Department and the Power Department. Furthermore, in the aforesaid affidavit, it has been stated that a committee for administration of the special fund created by rule 11 of the Rules has been constituted by notification dated July 24, 2008. Sri Choudhury has also drawn the attention of the court to the statements made in the aforesaid affidavit to the effect that the different Departments involved will be submitting proposals for development of infrastructure to the committee so constituted and the committee after examination of the proposals will recommend the sanction and release funds to the different Departments for development of infrastructure and for provision of facilities and amenities to facilitate trade and commerce in the local areas. 32. Insofar as the Ordinance of 2008 is concerned, Sri Choudhury has referred to the common affidavit of the respondents filed in W. P. (C) No. 3299 of 2008 to point out that the Act of 2008, being a validating legislation enacted to take care of the defects of the earlier legislation as pointed out by the Division Bench in its judgment dated August 30, 2007 [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gau)], had necessarily to be retrospective in nature. However, inadvertently as the said aspect was overlooked the Ordinance has been promulgated to correct the error. Sri Choudhury has pointed out that the challenge as against the Ordinance has been made by the petitioners on grounds of propriety, expediency and necessity for the Ordinance which being matters of exclusive consideration of the legislative authority ought not to be gone into by the court. Sri Choudhury has further submitted that the validating legislation has necessarily to be retrospective as laid down by the apex court in several judgments, details of which have been placed before the court. 33. Sri Choudhury has further submitted that the validating legislation has necessarily to be retrospective as laid down by the apex court in several judgments, details of which have been placed before the court. 33. For the sake of brevity the court is of the view that notice in this regard 33 may be had of the judgment of the apex court in Municipal Committee Patiala v. Model Town Residents Assn. reported in AIR 2007 SC 2844 , wherein in paragraph 20 the apex court has taken the view that a validating legislation altering the basis of the law can be retrospective. However, Sri Choudhury, learned Additional Advocate-General, has submitted that in so far as the Ordinance making all items of the Schedule to the Act of 2008 retrospective in operation from October 1, 2001 is concerned, such retrospectivity should be with effect from the dates from which such items were brought into the Schedule to the Act of 2001 and therefore the provisions of the Ordinance in this regard may be suitably read down by the court instead of invalidating the same on the aforesaid count. 34. Continuing, Sri Choudhury, learned Additional Advocate-General, has 34 placed reliance on the decision of the apex court in G. K. Krishnan v. State of Tamil Nadu reported in [1975] 2 SCR 715, particularly the observations contained in paragraph 17 of the judgment in the said case to contend that users of vehicles who stand in a special and direct relation to roads may be called upon to make a special contribution for the maintenance of such roads over and above the general contribution as tax-payers of the State. Referring to another decision of the apex court in the case of Kishan Lal Lakhmi Chand v. State of Haryana reported in 1993 (3) SCALE 296 , Sri Choudhury has drawn the attention of the court to paragraph 8 of the judgment wherein the provisions of validation contained in Section 11 of the Haryana Rural Development Act, 1986 were found to be valid on the basis that the amount collected under the earlier invalid law was not to be retained by the State but would be passed on to the credit of the special board constituted under the provisions of the validating Act. Sri Choudhury has also referred to another decision of the apex court in State of H.P. v. Yaspal Garg (dead) by Lrs. Sri Choudhury has also referred to another decision of the apex court in State of H.P. v. Yaspal Garg (dead) by Lrs. reported in [2003] 3 SCR 1056 wherein in para 24 the apex court has clearly upheld the power of the Legislature to enact a validating legislation by removing the reasons for the earlier invalidation. 35. Insofar as the ad valorem levy of Entry Tax Act, 2008 is concerned, 35 Sri Choudhury has submitted that the ad valorem levy indicates the measure of the tax and where the Act is otherwise found to be within the competence of the Legislature the same cannot be invalidated on account of the objections as to the measure or quantum of tax. In this regard reliance has been placed by Sri Choudhury on a decision of the apex court in Venkateshwara Theatre v. State of Andhra Pradesh reported in AIR 1993 SC 1947 wherein the apex court had indicated the essential difference between the subject of the tax and the measure of the tax. Referring to the decision of the apex court in State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal reported in AIR 2004 SC 3894 , Sri Choudhury has relied on the observations contained in para 21 of the judgment to contend that the compensatory nature of the levy will not be affected by any statement made to the effect that the levy has been imposed to augment the financial resources of the State as has been contended by the petitioners. According to Sri Choudhury, as held by the apex court in State of Gujarat AIR 2004 SC 3894 even giving of a wrong reason for exercise of the power to levy a tax would not affect the validity thereof. Reference has been made by Sri Choudhury to two other judgments of the apex court-the first in Shaktikumar M. Sancheti v. State of Maharashtra (1995) 1 SCC 351 and in Mohan Das N. Hegde (dead) through Lrs. v. State of Karnataka reported in AIR 2005 SC 2178 , wherein different rates of entry tax on vehicles either on the purchase value or the cost of the vehicle were held by the apex court not to be adverse to the regulatory/compensatory nature of the levy. 36. v. State of Karnataka reported in AIR 2005 SC 2178 , wherein different rates of entry tax on vehicles either on the purchase value or the cost of the vehicle were held by the apex court not to be adverse to the regulatory/compensatory nature of the levy. 36. On the aforesaid basis, Sri Choudhury, learned Additional Advocate-General, has argued that merely because entry tax has been levied ad valorem by the Act of 2008 it cannot be said that said levy is not compensatory. 37. Insofar as the contention of Dr. Saraf, learned Counsel for the petitioners with regard to Section 3(2)(ii) of the Act of 2008 is concerned, Sri Choudhury, learned Additional Advocate-General, has urged that article 286 of the Constitution has no application in respect of entry of goods into a local area for purposes of sale, consumption or use therein to which situation it is the provisions contained in Part XIII of the Constitution which alone will apply. The validity of any fiscal legislation in respect of entry of goods into a local area for the purpose enumerated above will have to be decided on anvil of the provision of Part XIII of the Constitution and not by reference to article 286. In this regard, Sri Choudhury has referred to the decision of the apex court in State of Bombay v. United Motors (India) Ltd. reported in [1953] 4 SCR 1069 and also the decision of the apex court in Bengal Immunity Company Limited v. State of Bihar reported in [1955] 2 SCR 603 . 38. Sri Choudhury, learned Additional Advocate-General, has also refuted the contention advanced by Sri N. Dutta, learned Senior Counsel for the petitioners, to the effect that levy under entry No. 52 of List II of the Seventh Schedule to the Constitution can never be compensatory by contending that such a proposition, broad as it is, is self-defeating and self-contradictory and does not logically follow either from the provisions of entry 52 or the concept of compensatory tax. Sri Choudhury has also contended that the argument advanced by Sri Dutta, learned Counsel for the petitioners, that the entry tax collected from one local area has necessarily to be used for the development of the infrastructure of that local area alone is without any substance. 39. Sri Choudhury has also contended that the argument advanced by Sri Dutta, learned Counsel for the petitioners, that the entry tax collected from one local area has necessarily to be used for the development of the infrastructure of that local area alone is without any substance. 39. Lastly, Sri Choudhury has elaborately placed before the court the decision of the apex court in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) and has contended that the quantifiable benefit derived by the tax-payers as a measure of recompense for the service provided, because of its very nature, cannot be worked out with the degree of precision which the petitioners in the present case have insisted upon. Such determination, according to Sri Choudhury, has necessarily to be proximate and the degree of proximity has to be the subject-matter of judicial satisfaction. According to Sri Choudhury, in the present case, if the aforesaid test is to be applied the levy in question, will pass the test of being compensatory in nature. 40. The contentions advanced by the rival parties having been taken note of, 40 the court may now proceed to examine the same and record its views in the matter. 41. The contention with regard to the definition of "importer" of specified 41 goods transported through pipelines into a local area, contained in the Explanation to Section 2(1)(e), may be taken up first. The said Explanation, by a deeming provision, has made the recipient of specified goods transported through pipelines an "importer" within the meaning of the Act, though in cases of other specified goods, a person, who, effects entry of goods into a local area has been included within the ambit of the said definition. The power of the Legislature to make the recipient of the crude oil, i.e., the petitioner, an importer under the Act by means of a deeming provision has to be conceded. As observed in J. K. Cotton Spinning and Weaving Mills Ltd. v. Union of India 1987(32) ELT 234 (SC) "... The Legislature is quite competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. . .". As observed in J. K. Cotton Spinning and Weaving Mills Ltd. v. Union of India 1987(32) ELT 234 (SC) "... The Legislature is quite competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. . .". The deeming provision contained in the Explanation to Section 2(1)(e) of the Act also appears to be consistent with the provisions of the Act, which seeks to impose the levy on a person who is responsible for the entry of specified goods into a local area, which, in the case of goods transported through pipelines, can also be reasonably understood to be the recipient of crude oil, i.e., the refinery owned by the petitioner in W.P. (C) No. 2452 of 2008. Furthermore, in the affidavit dated August 8, 2008 filed by the State, it has been stated that expenses are incurred by the State for providing security to the pipelines. The pipelines, however, according to the petitioner in W. P. (C) No. 2452 of 2008, are owned by the ONGC or OIL, as the case may be. Even in such a situation the service provided by the State, i.e., security to the pipelines, would still benefit the petitioner, who receives the crude oil within the refinery owned by it. A discernible relationship between the tax to be paid and the service to be provided does exist. 42. The next issue that will require consideration of the court is the arguments and counter-arguments advanced with regard to the validation provisions contained in Section 12 of the Act of 2008. In this regard the tenability of the challenge made against the Ordinance of 2008 will also require the consideration of the court. 43. The principles governing a legislative attempt to validate a law declared ultra vires by a court, had been laid down by a Constitution Bench of the apex court in Shri Prithivi Cotton Mills Ltd. v. Broach Borough Municipality [1971] 79 ITR 136(SC) . The observations of the Constitution Bench as contained in paragraph 4 of the judgment which have been re-stated in the Delhi Cloth & General Mills Co. Ltd. v. State of Rajasthan [1996] 1 SCR 518, may be usefully extracted below: Before we examine Section 3to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. Ltd. v. State of Rajasthan [1996] 1 SCR 518, may be usefully extracted below: Before we examine Section 3to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. When a Legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the Legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or exercise. A court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the Legislature gives its own meaning and interpretation of the law under which tax was collected and by legislative fiat makes the new meaning binding upon courts. The Legislature may follow any one method or all of them and while it does so it may neutralize the effect of the earlier decision of the court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the Legislature and legal and adequate to attain the object of validation. The Legislature may follow any one method or all of them and while it does so it may neutralize the effect of the earlier decision of the court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the Legislature and legal and adequate to attain the object of validation. If the Legislature has the power over the subject-matter and competence to make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a validating law, therefore, depends upon whether the Legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax. 44. As already noted earlier in I. N. Saksena (1976) II LLJ 154SC, the apex 44 court has laid down a further test that a validating law has to satisfy, i.e., such law must be consistent with the provisions of Part III of the Constitution. 45. In the present case the power and competence of the State Legislature 45 under entry 52 of List II to impose a tax on the entry of goods into a local area for purposes of sale, consumption and use therein is not in issue. That the Act of 2008 transgresses any of the fundamental rights of any of the petitioners guaranteed by Part III of the Constitution has also not been seriously debated before us. The question, therefore, that is required to be answered is whether the defects on account of which the earlier law, i.e., the Act of 2001 was declared invalid, by the Division Bench in W. A. No. 462 of 2006 [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gauhati)] have been removed while enacting the Act of 2008. In other words, what would now require a determination by the court is whether the Act of 2008 is compensatory, which is really the third issue arising in the case. However, before proceeding to answer the said question, the court must deal with the issue with regard to the validity of the Amendment Ordinance of 2008. 46. In other words, what would now require a determination by the court is whether the Act of 2008 is compensatory, which is really the third issue arising in the case. However, before proceeding to answer the said question, the court must deal with the issue with regard to the validity of the Amendment Ordinance of 2008. 46. The Amendment Ordinance of 2008 seeks to amend the long title and preamble of the Act by inserting the following: and to validate certain taxes imposed on entry of goods into any local area in Assam for consumption, use or sale therein and for matters connected thereto or incidental thereto. It also seeks to amend Sub-section (3) of Section 1 of the Act by deeming the Act of 2008 to have come into force with effect from October 1, 2001, i.e., the date on which the Assam Entry Tax Act of 2001 came into force. 47. The writ petitioners in most of the cases have amended the writ petitions originally filed in order to challenge the validity of the aforesaid provisions of the Ordinance. A perusal of the pleadings in this regard indicates that the challenge against the Ordinance is primarily on grounds of expediency and necessity thereof, which questions the court cannot enter into. Another ground of challenge against the Ordinance is that it violates the requirement of the proviso to article 304(b) of the Constitution-a question that is inter-linked with the issue that remains to be adjudicated, i.e., whether the Act itself is compensatory or not. The only other objection of the petitioners as against the Ordinance which has some bearing and relevance is that the retrospective effect sought to be given to the Act of 2008 from October 1, 2001 would have the effect of making certain items to the Schedule of the Act of 2008 taxable from a point of time anterior to the inclusion of the said items in the Schedule to the Act of 2001. 48. 48. While no precedent needs to be cited for expressing the view that a validating statute more often than not, has to be retrospective in operation, the effect and legal consequences of such retrospective operation, as pointed out by the petitioners above, would not require the consideration of the court in view of the stand taken on behalf of the State that it was not the intention of the Legislature to make the Scheduled goods under the Act of 2008 taxable from any point of time earlier than the inclusion of the said goods in the Schedule to the Act of 2001. The intention of the Legislature while giving retrospective effect to the Act of 2008 having been clarified, the court has to read and understand the provisions of the Amendment Ordinance giving retrospective effect to the Act of 2008 in respect of the different specified goods to be from such date(s) that the said goods came to be included in the Schedule to the Act of 2001. 49. Part III of the Constitution deals with the freedom of trade, commerce and intercourse within the territories of India. The aforesaid freedom which is enshrined in article 301 is however subject to the other provisions contained in Part III. While article 302 empowers the Parliament to impose restrictions on the freedom of trade, commerce and intercourse as may be required in the public interest, article 303(2) authorizes the Parliament to go beyond the prescription contained in article 303(1) and authorize the making of discrimination in order to deal with a situation arising from scarcity of goods in any part of the territory of the country. On the other hand, article 304 authorizes a State Legislature to impose tax on goods imported from other States without causing any discrimination and also to impose reasonable restrictions on the freedom of trade. However, by the proviso to article 304(b) a law of the State Legislature imposing reasonable restrictions shall not be enacted without the prior sanction of the President. 50. Two decisions of old vintage which still holds the field, i.e., Atiabari Tea 50 Co. Ltd. v. State of Assam [1961] 1 SCR 809 and Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491 may now be taken note of. In Atiabari Tea Co. 50. Two decisions of old vintage which still holds the field, i.e., Atiabari Tea 50 Co. Ltd. v. State of Assam [1961] 1 SCR 809 and Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491 may now be taken note of. In Atiabari Tea Co. Ltd. [1961] 1 SCR 809 it was laid down that taxing laws though not excluded from the operation of the Part XIII of the Constitution, it is only such taxes that directly and immediately restrict trade that would fall within the purview of the provisions contained in the aforesaid Part XIII. A Bench of seven honourable judges of the apex court in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 evolved the concept of compensatory tax and held that as such taxes further trade and commerce instead of causing any hindrance. If a levy can be held to be compensatory in nature, its validity will not depend on the fulfilment of the requirements contemplated by the proviso to article 304(b) of the Constitution. In the said judgment the apex court also laid down a working test whether a levy is compensatory or not in the following terms: ... a working test for deciding whether a tax is compensatory or not is to enquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities. 51. The above law declared in Automobile Transport (Rajasthan) Ltd. AIR 51 1962 SC 1406 came to be continuously applied to decide whether a levy is compensatory or not. However, in two decisions of the apex court, i.e., Bhagatram Rajeev Kumar v. Commissioner of Sales Tax 1994 (4) SCALE 1103 and in State of Bihar v. Bihar Chamber of Commerce [1996] 2 SCR 184 a somewhat broader proposition of "some link between the tax and the facilities extended ..." was understood to have been laid down by the apex court. The aforesaid broader proposition came to be noticed in Jindal Stripe Ltd. v. State of Haryana (2003) 8 SCC 60 which led to a reference being made for an authoritative pronouncement as to whether the aforesaid broader proposition could survive in view of the law laid down in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 . The aforesaid broader proposition came to be noticed in Jindal Stripe Ltd. v. State of Haryana (2003) 8 SCC 60 which led to a reference being made for an authoritative pronouncement as to whether the aforesaid broader proposition could survive in view of the law laid down in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 . The following observations contained in paragraph 231 of the referral order Jindal Stripe Ltd. v. State of Haryana (2003) 8 SCC 60 would be necessary to be noticed at this stage. 231. It is contended by the appellants, with considerable force, that if the concept of compensatory tax has to be understood in the manner in which it has been viewed by the court in the decisions of Bhagatram case 1994 (4) SCALE 1103 and Bihar Chamber of Commerce's case [1996] 2 SCR 184, there will be no practical distinction between a tax raised for general revenue purposes and a compensatory tax meant for the specific purpose of providing facilities or services to the persons subjected to the tax. All State revenues are presumably expended or at least are expendable only for the welfare of the nation or the State as a whole. This may result in a general economic upliftment and the betterment of all facets of life including ultimately and in an indirect sense the trading community. The approach in the two decisions noted does away with the difference between taxes in general and compensatory taxes. If that is the law then any tax could pass the test of compensatory tax judged from the standard applied. Then no tax can impinge on the freedom ordained by article 301, a result which, it is pointed out, would go counter to the court's decision in Atiabari Tea Co.'s case [1961] 1 SCR 809 and the long line of authorities referred to earlier starting with Automobile Transport case [1963] 1 SCR 491 . 52. The aforesaid reference was answered by the apex court in Jindal Stainless Ltd. v. State of Haryana [2006] 283 ITR 1(SC) . 52. The aforesaid reference was answered by the apex court in Jindal Stainless Ltd. v. State of Haryana [2006] 283 ITR 1(SC) . As elaborate contentions have been advanced by the rival parties on the true meaning and purport of the various observations contained in Jindal Stainless Ltd. [2006] 283 ITR 1(SC), it will be necessary for the court to reproduce herein the view of the apex court in the matter as contained in paragraphs 39, 40, 41, 42, 43, 44, 45, 49, 50, 52 and 53 of the judgment (paragraphs 36, 37, 38, 39, 40, 41, 42, 46, 47, 49 and 50 in STC): 39. As stated above, in order to lay down the parameters of a compensatory tax, we must know the concept of taxing power. 40. Tax is levied as a part of common burden. The basis of a tax is the ability or the capacity of the tax-payer to pay. The principle behind the levy of a tax is the principle of ability or capacity. In the case of a tax, there is no identification of a specific benefit and even if such identification is there, it is not capable of direct measurement. In the case of a tax, a particular advantage, if it exists at all, is incidental to the States' action. It is assessed on certain elements of business, such as, manufacture, purchase, sale, consumption, use, capital, etc., but its payment is not a condition precedent. It is not a term or condition of a licence. A fee is generally a term of a licence. A tax is a payment where the special benefit, if any, is converted into common burden. 41. On the other hand, a fee is based on the 'principle of equivalence'. This principle is the converse of the 'principle of ability' to pay. In the case of a fee or compensatory tax, the 'principle of equivalence' applies. The basis of a fee or a compensatory tax is the same. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. In the case of a tax, even if there is any benefit, the same is incidental to the Government action and even if such benefit results from the Government action, the same is not measurable. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. In the case of a tax, even if there is any benefit, the same is incidental to the Government action and even if such benefit results from the Government action, the same is not measurable. 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. 42. A tax can be progressive. However, a fee or a compensatory tax has to be broadly proportional and not progressive. In the principle of equivalence, which is the foundation of a compensatory tax as well as a fee, the value of the quantifiable benefit is represented by the costs incurred in procuring the facility/services which costs in turn become the basis of reimbursement/recompense for the provider of the services/facilities. Compensatory tax is based on the principle of 'pay for the value'. It is a sub-class of 'a fee'. From the point of view of the Government, a compensatory tax is a charge for offering trading facilities. It adds to the value of trade and commerce which does not happen in the case of a tax as such. A tax may be progressive or proportional to income, property, expenditure or any other test of ability or capacity (principle of ability). Taxes may be progressive rather than proportional. Compensatory taxes, like fees, are always proportional to benefits. They are based on the principle of equivalence. However, a compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. If one keeps in mind the 'principle of ability' vis-a-vis the 'principle of equivalence', then the difference between a tax on the one hand and a fee or a compensatory tax on the other hand can be easily spelt out. Ability or capacity to pay is measurable by property or rental value. Local rates are often charged according to ability to pay. Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it rests upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it. Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it rests upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it. 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/fee 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 facility/services. Every benefit is measured in terms of cost which has to be reimbursed by compensatory tax or in the form of compensatory tax. In other words, compensatory tax is a recompense/reimbursement. 43. In the context of article 301, therefore, compensatory tax is a compulsory contribution levied broadly in proportion to the special benefits derived to defray the costs of regulation or to meet the outlay incurred for some special advantage to trade, commerce and intercourse. It may incidentally bring in net-revenue to the Government but that circumstance is not an essential ingredient of compensatory tax. 44. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters. 45. To sum up, the basis of every levy is the controlling factor. In the case of 'a tax', the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of 'a fee', the basis is the special benefit to the payer (individual as such) based on the principle of equivalence. When the tax is imposed as a part of regulation or as a part of regulatory measure, 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 revenue but as reimbursement/recompense to the service/facility provider. It is then a tax on recompense. Compensatory tax is by nature hybrid but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement/recompense. It is then a tax on recompense. Compensatory tax is by nature hybrid but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement/recompense. If the impugned law chooses an activity like trade and commerce as the criterion of its operation and if the effect of the operation of the enactment is to impede trade and commerce then article 301 is violated. Why was the matter placed before a Bench of five judges? 49. The concept of compensatory taxes was propounded in the case of Automobile Transport [1963] 1 SCR 491, in which compensatory taxes were equated with regulatory taxes. In that case, a working test for deciding whether a tax is compensatory or not was laid down. In that judgment, it was observed that one has to enquire whether the trade as a class is having the use of certain facilities for the better conduct of the trade/business. This working test remains unaltered even today. 50. As stated above, in the post 1995 era, the said working test propounded in the Automobile Transport [1963] 1 SCR 491, stood disrupted when in Bhagatram's case 1994 (4) SCALE 1103 , a Bench of three judges enunciated the test of 'some connection' saying that even if there is some link between the tax and the facilities extended to the trade directly or indirectly, the levy cannot be impugned as invalid. In our view, this test of 'some connection' enunciated in Bhagatram's case 1994 (4) SCALE 1103 is not only contrary to the working test propounded in Automobile Transport's case [1963] 1 SCR 491, but it obliterates the very basis of compensatory tax. We may reiterate that when a tax is imposed in the regulation or as a part of regulatory measure the controlling factor of the levy shifts from burden to reimbursement/recompense. The working test propounded by a Bench of seven judges in the case of Automobile Transport [1963] 1 SCR 491 and the test of 'some connection' enunciated by a Bench of three judges in Bhagatram's case 1994 (4) SCALE 1103 cannot stand together. The working test propounded by a Bench of seven judges in the case of Automobile Transport [1963] 1 SCR 491 and the test of 'some connection' enunciated by a Bench of three judges in Bhagatram's case 1994 (4) SCALE 1103 cannot stand together. Therefore, in our view, the test of 'some connection' as propounded in Bhagatram's case 1994 (4) SCALE 1103 is not applicable to the concept of compensatory tax and accordingly to that extent, the judgments of this Court in Bhagatram Rajeev Kumar v. Commissioner of Sales Tax 1994 (4) SCALE 1103 and State of Bihar v. Bihar Chamber of Commerce[1996] 2 SCR 184 stand overruled. Conclusion: 52. In our opinion, the doubt expressed by the referring Bench about the correctness of the decision in Bhagatram's case 1994 (4) SCALE 1103 followed by the judgment in the case Bihar Chamber of Commerce [1996] 2 SCR 184 was well-founded. 53. We reiterate that the doctrine of 'direct and immediate effect' of the impugned law on trade and commerce under article 301 as propounded in Atiabari Tea Co. Ltd. v. State of Assam [1961] 1 SCR 809 and the working test enunciated in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491 for deciding whether a tax is compensatory or not vide paragraph 19 of the report (AIR), will continue to apply and the test of 'some connection' indicated in paragraph 8 (of SCC) See at page 658 of [1995] 96 STC of the judgment in Bhagatram Rajeev Kumar v. Commissioner of Sales Tax 1994 (4) SCALE 1103 and followed in the case of State of Bihar v. Bihar Chamber of Commerce [1996] 2 SCR 184 is, in our opinion, not good law.' Accordingly, the constitutional validity of various local enactments which are the subject-matters of pending appeals, special leave petitions and writ petitions will now be listed for being disposed of in the light of this judgment. 53. The apex court in Jindal Stainless Ltd. [2006] 283 ITR 1(SC), has reiterated the working test laid down in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 as contained in paragraph 19 of the judgment. 53. The apex court in Jindal Stainless Ltd. [2006] 283 ITR 1(SC), has reiterated the working test laid down in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 as contained in paragraph 19 of the judgment. In paragraph 19, the Bench of seven honourable judges after laying down the working test has also been pleased to observe that "it would be impossible to judge the compensatory nature of tax by a meticulous test and in the nature of things that cannot be done". The principle of measurable/quantifiable benefits to the tax-payers from the levy imposed making such levy a reimbursement/recompense for the service provided, as laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) therefore, necessarily has to be understood in the context of the latter observations in Automobile Transport (Rajasthan) Ltd. [1963] 1 SCR 491 . The ultimate test, therefore, will not be mathematical or precision oriented but would largely be approximate, the proximity being a matter of judicial determination and satisfaction. 54. It has to be noticed, in the present case, that the provisions of the Act of 54 2008 and the Rules framed thereunder provide for credit of the entire proceeds of the entry tax to a special fund, i.e., the Assam Trade Development Fund for exclusive utilization for development of infrastructure and provisions for amenities to facilitate trade, commerce and intercourse including the specific fields mentioned in Section 10(1)(a) to (d). Section 10(2) provides that the amounts realised as entry tax will not be used for any other purpose except those specified under Sub-section (1). The affidavit dated August 8, 2008 filed by the State indicates that for the current financial year, i.e., 2008-09 a sum of Rs. 250 crore has been earmarked for credit to the special fund. Out of the said amount of Rs. 250 crore diverse amounts have been earmarked for different Departments connected with the development of infrastructure and making of provisions for amenities to facilitate trade, commerce and intercourse. 55. The affidavit further indicates that a committee for administration of the 55 special fund has been constituted on July 24, 2008, which committee has been entrusted with the task of examination of proposals to be submitted by the concerned departments with regard to development of infrastructure and thereafter for sanction and release of funds. 55. The affidavit further indicates that a committee for administration of the 55 special fund has been constituted on July 24, 2008, which committee has been entrusted with the task of examination of proposals to be submitted by the concerned departments with regard to development of infrastructure and thereafter for sanction and release of funds. The Budget speech of the honourable Chief Minister of the State for the year 2008-09 indicates that while collection by way of entry tax for the year 2005-06 was Rs. 296.69 crore and for the year 2006-07 was Rs. 216.43 crore, for the year 2007-08 there has been practically no collection of entry tax on account of the interference made by the court in Writ Appeal No. 462 of 2006 and other connected cases [State of Assam v. Chhotabhai Jethabhai Patel Tobacco Products Co. Ltd. [2008] 15 VST 70 (Gauhati)]. Thereafter, the Entry Tax Act of 2008 was enacted effective from June 1, 2008. Though the amount collected till date under the said Act has not been placed before the court, the figures of collection for the earlier years can be legitimately taken into account by the court in making an estimate for the current year. 56. The argument offered on behalf of the petitioners that the amount of 56 entry tax collected and contemplated to be used under Section 10 of the Act of 2008 for the purposes mentioned therein pertains to the general duties of the State which the State is otherwise obliged to perform, though attractive, at first blush, needs a closer scrutiny. Firstly, the specific fields of development enumerated in Section 10(1)(a) to (d) of the Act are not exhaustive. This is evident from the fact that the different fields covered by Section 10(1)(a) to (d) have been made inclusive in nature by Section 10(1) of the Act. Other areas where development of infrastructure and provisions for amenities will be required to be made, depending on the experience of the working of the Act, are adequately contemplated by Section 10 of the Act by making the areas specified by Sub-clauses (a) to (d) to be inclusive instead of exhaustive of the parameters that will be required for development of infrastructure and provision for amenities to facilitate trade, commerce and intercourse. 57. 57. Additionally, the provisions of Section 10(2) which impose an embargo of use of any amount of entry tax collected for any other purpose ; the transfer of the amount collected under the Act of 2001 to the special fund; the provisions of rule 11 providing for deposit of the amount of entry tax collected under an exclusive head of account, are sufficient facial indications that the levy under the Act is intended to provide certain identifiable benefits to trade. The provision in the Budget of 2008-09 for credit of Rs. 250 crores to the special fund created, the funds earmarked for infrastructure development and provisions for amenities to different departments and the constitution of a committee to examine the developmental schemes and to sanction and allocate funds, which materials have been placed in the affidavit dated August 8, 2008, are further pointers that should enable the levy to partake of the character of being compensatory in nature. While it is correct that the development of infrastructure and provision of amenities may also benefit persons other than the payers of entry tax, the said fact, by itself, will not affect the compensatory nature of the levy, inasmuch as, it is not a requirement, such a situation being impossible, that the levy of entry tax should bring benefit only to those from whom the tax is collected. 58. Strenuous arguments have been offered on behalf of the petitioners that Section 10 of the Act of 2008 enumerates different fields of developmental activity which, even otherwise, fall within the general duties and responsibilities of a sovereign State. Laying of roads and maintenance thereof ; provisions for electricity, sanitation, water supply, etc., covered by Section 10(1)(a) to (d) of the Act and the proposed expenditure thereon out of the amounts collected by way of entry tax, it is argued, cannot be understood to bring any special benefit or facility to trade. An additional argument has been made by Sri N. Dutta, learned Senior Counsel, to the effect that, in any event, detailed particulars of any specific developmental activity or project that is intended to be provided has not been laid before the court to enable the court to understand the levy to be compensatory even by application of the test of "service to be provided" in the future, a course of action held permissible in Jindal Stainless Ltd. [2006] 283 ITR 1(SC). 59. 59. The concept of a welfare State encompasses such a wide range of duties 59 and responsibilities for the welfare of the citizens that it is practically impossible to catalogue the same. A developing economy like India is plagued by a persistent constraint of funds making it impossible for the State to provide what is intended. Consequently, in many parts of the country infrastructure is at the minimum. Such minimum provisions are all that the general revenue of the State can provide for the time being. If in such a situation, extra facilities, though the same may pertain to the general duties of the State, is provided for by levy of an additional impost, such a levy can still be regarded as a compensatory measure provided the requisite tests are satisfied. The following observations of the apex court in G. K. Krishnan v. State of Tamil Nadu [1975] 2 SCR 715 may best sum up the situation: 17. Strictly speaking, a compensatory tax is based on the nature and the extent of the use made of the roads, as, for example, a mileage or ton-mileage charge or the like, and if the proceeds are devoted to the repair, upkeep, maintenance and depreciation of relevant roads and the collection of the exaction involves no substantial interference with the movement. The expression 'reasonable compensation' is convenient but vague. The standard of reasonableness can only lie in the severity with which it bears on traffic and such evidence of extravagance in its assessment as come from general considerations. What is essential for the purpose of securing freedom of movement by road is that no pecuniary burden should be placed upon it which goes beyond a proper recompense to the State for the actual use made of the physical facilities provided in the shape of a road. The difficulties are very great in defining this conception. But the conception appears to be based on a real distinction between remuneration for the provision of a specific physical service of which particular use is made and the burden placed upon transportation in aid of the general expenditure of the State. It is clear that the motor vehicles require, for their safe, efficient and economical use, roads of considerable width, hardness and durability; the maintenance of such road will cost the Government money. It is clear that the motor vehicles require, for their safe, efficient and economical use, roads of considerable width, hardness and durability; the maintenance of such road will cost the Government money. But, because the users of vehicles generally, and of public motor vehicles in particular, stand in a special and direct relation to such roads, and may be said to derive a special and direct benefit from them, it seems not unreasonable that they should be called upon to make a special contribution to their maintenance over and above their general contribution as tax-payers of the State. (emphasis is ours), If, however, a charge is imposed, not for the purpose of obtaining a proper contribution to the maintenance and upkeep of the road, but for the purpose of adversely affecting trade or commerce, then it would be a restriction on the freedom of trade, commerce or intercourse [See Freightlines & Construction Holding Ltd. v. State of New South Wales [1968] AC 625]. 60. In Jindal Stainless Ltd. [2006] 283 ITR 1(SC) the apex court has held that the service provided may be existing or intended. In the present case the court is dealing with a situation where the service in return for the levy, largely, is intended to be provided. In such circumstances the existence of a definite and existing blueprint for the future may not be possible or feasible. The road map for the services to be provided could well depend on the experience of the working of the Act of 2008, which is yet to be perceived. What would be of paramount importance in this regard is the wording of the statute and if the statute in question contemplated such a vision, its validity should not be judged by the apprehensions of its possible operation. In this regard, the provisions of the Act of 2008 have already been taken note of by us in another part of the present order which would seem to indicate the elasticity of the provisions of Section 10 to admit necessary infrastructure development and provisions for amenities as may be necessary on the basis of the experience of the working of the Act. 61. The argument advanced by the petitioners that levy of entry tax being ad valorem, the same cannot be compensatory, would now require to be examined. 61. The argument advanced by the petitioners that levy of entry tax being ad valorem, the same cannot be compensatory, would now require to be examined. No authority in support of the proposition has been cited, perhaps, because none exists. In fact, in paragraph 21 of the judgment in Jindal Stainless Ltd. [2006] 283 ITR 1(SC), the apex court did not go into the said question as the same was not necessary for the decision in the case. 62. The decision of the apex court in Shaktikumar M. Sancheti v. State of Maharashtra (1995) 1 SCC 351 and Mohan Das N. Hegde (dead) Lrs. v. State of Karnataka AIR 2005 SC 2178 could be understood to be authorities for the proposition that entry tax need not be uniform. In the said decisions the apex court had upheld the compensatory nature of the entry tax which was being imposed on the basis of the purchase value/cost price of motor vehicles. Logically also, different rates of tax for different goods by itself may not be destructive of the compensatory nature of the tax. Moreover, the ad valorem rate of tax being a measure therefor, unless such rate can be held to be confiscatory, which plea has not even been advanced, the levy in question cannot be adjudged to be unconstitutional on the ground urged. 63. There is also no good reason why the court should feel inclined to accept 63 the argument that the Act of 2008 having permitted the use of the amount of entry tax collected from one local area for the development of another local area, the said Act should be held to be invalid on the said ground. The argument overlooks the facts stated in the affidavit of the State wherein the steps taken for effective implementation of the Act of 2008 have been delineated, i.e., constitution of a special fund ; allocation of funds to different Departments as well as the constitution of the committee to examine proposals for development of infrastructure and to sanction and release funds. The argument also overlooks the stated purpose of the enactment in question, i.e., to facilitate trade, commerce and intercourse by making provisions for infrastructural development as well as the provisions for amenities. 64. The argument also overlooks the stated purpose of the enactment in question, i.e., to facilitate trade, commerce and intercourse by making provisions for infrastructural development as well as the provisions for amenities. 64. If the Act is otherwise within the competence of the State Legislature 64 and is compensatory in nature, there is no good reason as to why, merely on account of the aforesaid facet of the Act, the same should be invalidated by the court. The other argument advanced on behalf of the petitioners that the entry tax being a levy under entry 52 of List II of the Seventh Schedule to the Constitution the same cannot be compensatory is, once again, too broad a proposition for acceptance. Entry 52 deals with the power of the State Legislature to impose taxes on entry of goods into a local area for purpose of use, sale or consumption therein. The amount collected by way of entry tax may be allocated to the different local bodies to enable such bodies to carry on their activities or may be used by the State itself for expenditure against different infrastructural development activities in the local areas. Tested against the aforesaid background, it is difficult to see as to why the entry tax levied under entry 52 of List II cannot ever be compensatory, as contended. 65. The decisions of the several High Courts interfering with the levy of 65 entry tax, details of which cases along with the judgments have been placed before the court, have been duly considered by us. On such consideration, we find that the interference made by the Madras, Kerala, Allahabad and Jharkhand High Courts in ITC Limited v. State of Tamil Nadu [2007] 7 VST 367, Thressiamma L. Chirayil v. State of Kerala [2007] 7 VST 293, Indian Oil Corporation Limited v. State of Uttar Pradesh [2007] 10 VST 282 and Tata Iron & Steel Company Ltd. v. State of Jharkhand [2007] 6 VST 587have been on the basis of the materials placed before the respective honourable courts in support of the plea that the entry tax levied was compensatory. 66. The present case, naturally, had to be considered in the light of the 66 provisions of the statute in question and the materials placed before this Court. 66. The present case, naturally, had to be considered in the light of the 66 provisions of the statute in question and the materials placed before this Court. In so far as the decision of the Punjab and Haryana High Court in Jindal Strips Limited v. State of Haryana [2008] 12 VST 149 is concerned the court has noticed that the basis of the said judgment is that the facilities that were to be provided under the relevant statute fell within the general duties of the State and therefore, the levy of entry tax was understood to be contrary to the law laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) . With utmost respect to the views expressed by the Punjab and Haryana High Court and on our own understanding of the law laid down in Jindal Stainless Ltd. [2006] 283 ITR 1(SC) we are unable to agree with the views expressed by the Punjab and Haryana High Court. 67. Consequently, we hold that the levy of entry tax by the Act of 2008 is compensatory. The said finding would enable us to reach the further conclusion that by enacting the Act of 2008 the State Legislature had removed the defects in the earlier law, i.e., the Act of 2001 on account of which the said Act was declared to be ultra vires. We have also reached the conclusion that the Amendment Ordinance of 2008 is valid subject to our observations with regard to the date(s) from which the different specified goods will become taxable. 68. Consequently, all the writ petitions are dismissed. However, in the facts and circumstances of the cases we deem it proper not to make any order as to costs.