SREE KRISHNA MARBLES AND GRANITES Vs. STATE OF KERALA
HIGH COURT OF KERALA
SREE KRISHNA MARBLES AND GRANITES
STATE OF KERALA
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(1.) The petitioner is challenging Ext. P4 notice issued by the Sales Tax Inspector, Sales Tax Checkpost, Walayar, demanding entry tax on marble slabs imported by the petitioner to Kerala from outside the State. The petitioners case is that the petitioner is a registered dealer under the K.G.S.T. and C.S.T. Acts in Kerala and is liable to pay sales tax on the sale of marble brought by it on its sale, since marble is an item taxable under the First Schedule to the K.G.S.T. Act at the point of first sale in the State. According to the petitioner, the goods transported are covered by sale bill and other documents and the second respondent has no case to the contrary. The petitioner relies on Notification S.R.O. 590/96 by which the Government of Kerala has granted exemption from entry tax liability on goods brought by registered dealers on which they pay sales tax in Kerala. They have a further case that there is no proper assessment and demand of entry tax and the tax demanded by the second respondent vide Ext. P4 notice is arbitrary and untenable.
(2.) I have heard counsel for the petitioner and also the Government Pleader. Marble is an item coming under Entry 5 of the Schedule to the Kerala Tax on Entry of goods into Local Areas Act, hereinafter called the Entry Tax Act. S.3 of the Entry Tax Act provides for levy of entry tax on goods covered by the Schedule to the Entry Tax Act if such goods are imported into the State for consumption, use or sale therein. S.3 which is relevant in this context is extracted for easy reference:
Levy of Tax : - (1) Subject to the provisions of this Act, tax shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein. The tax shall be at such rate or rates as may be fixed, by the Government, by notification on the purchase value of the goods but not exceeding the rates specified for the goods in the First Schedule to the Kerala General Sales Tax Act.
Provided that no tax shall be levied and collected in respect of any motor vehicle which registered in any Union territory or any other State under the provisions of the Motor Vehicles Act, 1988 (Central Act 59 of 1988) prior to a period of fifteen months or more from the date on which it is registered in the State:
Provided further that no tax shall be levied and collected in respect of any goods which is the property of the Central Government or which is used exclusively for purposes relating to the defence of India.
(2) The tax shall be payable by the importer in such manner and within such time as may be prescribed.
(3.) The contention of counsel for the petitioner that there was exemption from entry tax under S.R.O. 590/96 on dealers registered under the K.G.S.T. and C.S.T. Acts for goods brought to Kerala for resale by them is correct. However, the said notification is modified by S.R.O. No. 949/02 dated 21.11.2002 produced by the petitioner as Ext. P5 whereunder the earlier notification is modified withdrawing the exemption in respect of goods, namely, marble slabs, marble tiles, Cudappa stones and slabs, granite slabs and tiles and generators specified in the Schedule to the Entry Tax Act. In fact, it is specifically mentioned in Ext. P4 notice that the demand of entry tax is by virtue of withdrawal of exemption under S.R.O. 949/02 dated 21.1.2002. Since Ext. P4 is based on the amended notification, the petitioner is challenging the validity of Ext. P5 on the ground that the said notification is arbitrary and discriminatory and violative of Art.14 of the Constitution of India. I heard the Government Pleader who defended the action of the second respondent and contended that Ext. P5 notification is not discriminatory or arbitrary.;
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