- (1.) WE have heard learned counsels for the petitioners. Learned Advocate General has appeared for the State of Rajasthan.
(2.) THE constitutional validity of the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 (for short, 'the Act') was upheld by Division Bench of the Rajasthan High Court in the case of M/s. Godfrey Philips India Ltd. (1) and Anr. v. State of Rajasthan and Anr., : (2001) 121 STC 54 (Raj.). In M/s. Dinesh Pouches Ltd. (1) v. State of Rajasthan and Ors. (D.B. Civil Writ Petition No. 21/2002), the vires of the Act, challenged on the grounds that it violates freedom of trade, commerce and intercourse under Article 301, not saved by Article 304(b) of the Constitution of India, the Act was upheld, following the earlier judgment in M/s. Godfrey Philips India Ltd. (1) and Anr. v. State of Rajasthan and Anr.
(3.) A Special Leave to Appeal was filed by the assessee's against the judgments in M/s. Godfrey Philips India Ltd. (1) v. State of Rajasthan and Anr. (supra) and M/s. Dinesh Pouches Ltd. (1) v. The State of Rajasthan and Ors. (supra). The State of Rajasthan also filed Special Leave to Appeal, as the Court had upheld two notifications and had quashed the circular dated 23.10.1999, with direction to the respondents, making entry tax on cigarettes qua petitioners recoverable with effect from 7.1.2000. In Jindal Strips Ltd. (1) v. State Haryana, : (2003) 8 SCC 60, a two -Judges Bench of the Apex Court doubted the correctness of the views expressed in Bhagatram Rajeevkumar v. CST, : 1995 Supp. (1) SCC 673, and referred the matter to a larger Bench. In Jindal Stainless Ltd. (2) and Anr. v. State of Haryana and Ors. : (2006) 7 SCC 241, a Constitution Bench of five Judges, on such reference, held as follows: - - "52. In our opinion, the doubt expressed by the referring Bench about the correctness of the decision in Bhagatram case followed by the judgment in Bihar Chamber of Commerce 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 and the working test enunciated in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan for deciding whether a tax is compensatory or not vide para 19 of the Report (AIR), will continue to apply and the test of "some connection" indicated in para 8 (of SCC) of the judgment in Bhagatram Rajeevkumar v. CST and followed in State of Bihar v. Bihar Chamber of Commerce is, in our opinion, is 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." ;