- (1.)HEARD both the parties.
The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 (hereinafter referred as the said Act) came into effect in the year 1993. The validity of the said Act was upheld by the Hon'ble Supreme Court in the case of State of Bihar v. Bihar Chamber of Commerce, reported in : [1996]2SCR184 . By the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein (Amendment) Act, 2001, which came into operation on and from 11 July, 2001, the said act was amended. Subsequent thereto by the Bihar Tax on Entry of Goods into Local Areas for consumption, Use or Sale Therein (Amendment) Act, 2003, which came into operation on and from 22 August, 2003, the said Act was further amended. These two amendments were challenged. The challenge so thrown failed before this Court on the ratio of the Judgment of the Hon'ble Supreme Court rendered in the case of State of Bihar v. Bihar Chamber of Commerce (supra). The challenge was thereupon taken before the Hon'ble Supreme Court. When the same was pending consideration, the Hon'ble Supreme Court by a Judgment rendered in Jindal Stainless Limited (2) v. : [2006]283ITR1(SC) declared that the law laid down in the State of Bihar v. Bihar Chamber of Commerce (supra) is not good law. Subsequent thereto, the Hon'ble Supreme Court by its Judgment rendered in Jindal Stainless Limited (3) v. : (2006)7SCC271 directed, amongst others, the parties whose challenge to the said amending Acts were then pending before the Hon'ble Supreme Court to place before this Court the relevant datas in the writ petitions concerned with a direction upon this Court to deal with the basic issue as to whether the levy imposed by those amendments was compensatory in nature with a further direction that the Judgment so to be rendered by this Court should be placed on record of the Hon'ble Supreme Court. In terms of the said direction of the Hon'ble Supreme Court, this Court considered, amongst others, the said two amendments and declared them to be not compensatory in nature. The Judgment so rendered by this Court has been placed before the Hon'ble Supreme Court and the Hon'ble Supreme Court is in seisin of the matter along with other connected matters. We are told that the Hon'ble Supreme Court is likely to take up the matter in question and all other connected matters sometimes in the months of May, 2008.

(2.)IN the original Act, the charging Section contained in Section 3 thereof provided, to the extent we are concerned, as follows:
There shall be levied and collected a tax on entry of scheduled goods into a local area for consumption, use or sale therein at such rate not exceeding 5 per centum of the import value of such goods as may be specified by the State Government in a notification published in a official gazette subject to such conditions as may be prescribed.

The charging section therefore, provided: (a) Tax shall be levied on entry of scheduled goods into a local area for consumption, use or sale therein; (b) At such rate not exceeding 5 per centum of the import value of such goods; (c) As may be specified by the State Government in a notification published in an official gazette; and (d) Subject to such conditions as may be prescribed.

The Act defined the words "Prescribed" and "Scheduled goods" as under:
Prescribed means prescribed by the Rules made under this Act.
Schedule goods means goods specified in the Schedule to this Act.

(3.)SECTION 9 of the Act authorized the State Government to make Rules for carrying out the purposes of the Act. On 17 May, 1993, the State Government made the Bihar Tax on Entry of Goods into Local Areas Rules, 1993 and thereby made the prescriptions. The Act contained a Schedule which in turn contained six specific items of goods.
In terms of the Act, therefore, entry tax on those six specific items of goods became levyable upon their entry into a local area for consumption, use or sale at such rate as was to be notified by the State Government, but which rate was not to exceed 5% subject to the conditions as had been prescribed in the Rules. The Rules did not prescribe anything pertaining to the rates to be specified by the State Government.