Date:19/12/2006 URL: http://www.thehindu.com/2006/12/19/stories/2006121907740100.htm

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Entry tax illegal: court

Staff Reporter

Kochi: A Division Bench of the Kerala High Court on Monday declared illegal and unauthorised the demand and collection of entry tax for goods brought from outside the State under the provisions of the Kerala Tax On Entry of Goods into the Local Area Act 1994.

The Bench comprising Justice K.S. Radhakrishnan and Justice M.N. Krishnan, while allowing a batch of writ petitions filed by various companies, observed that the provisions of the Act were violative of Article 14 (equality before law), and 19(1)(g) (freedom to practise any profession, trade or business).

The court observed that compensatory character of the tax was not self-evident from the Act. There was no connection or nexus between the collection of entry tax and its utilisation for the benefit of traders and manufacturers from whom it was collected. Since the term "outside the State" had been used, the tax was not liable on goods brought from abroad.