IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA No. 1551 of 1998(A)
1. C.ABDUL LATHEEF
... Petitioner
Vs
1. STATE OF KERALA
... Respondent
For Petitioner :SRI.K.M.SATHYANATHA MENON
For Respondent :ADVOCATE GENERAL
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.M.JOSEPH
Dated :01/12/2007
O R D E R
H.L.DATTU, C.J. & K.M.JOSEPH, J.
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W.A.Nos.1525 of 1997, 1551 of 1998,
1221, 1261, 1287, 1385 & 1658 of 2004 &
W.P.(C) Nos.17923, 24041 & 31561 of 2004
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Dated, this the 1st day of December, 2007
JUDGMENT
H.L.Dattu, C.J.
In all these writ appeals and writ petitions the appellants/petitioners are
calling in question certain actions of the respondent authorities, inter alia,
demanding payment of entry tax under the provisions of the Kerala Tax on
Entry of Goods into Local Areas Act, 1994 (‘the Act’ for short). All these
demands were made pursuant to the charging provision under the said Act.
The said charging provision is held to be unconstitutional by a Division Bench
of this Court in the case of Thressiamma L.Chirayil v. State of Kerala (2007 (1)
KLT 303). In the said decision the Division Bench of this Court has observed
as under:
“A compensatory tax is levied on an individual as a
member of a class and a fee is levied on an individual as
such. The concept of compensatory tax is a judicially evolved
principle and could be an exception to the provisions of
Art.301. 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. A tax is a payment where
the special benefit, if any, is converted into common burden.
On the other hand, a fee is based on the “principle of
equivalence”. In the case of a fee or compensatory tax, the
“principle of equivalence” applies and the basis of a fee or a
compensatory tax is the same. The main basis a fee or 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. Fee or a
W.A.No.1525/1997, etc.
2
compensatory tax has to be broadly proportional and not
progressive. Levy of entry tax on goods imported from
other State to the State of Kerala and from abroad is not
compensatory in nature since the State Government
could not discharge its burden by placing materials before
Court that payment of levy of entry tax is reimbursement/
recompense for the quantifiable/measurable benefit
provided or to be provided. Demand and collection of
entry tax under the Kerala Tax on Entry of Goods into
Local Areas Act, 1994 is illegal, unauthorized and
violative of Art.301 of the Constitution of India.”
2. Since the charging provision itself has been struck down by this
Court, the question of demanding for payment of entry tax under the Act
would not arise. Accordingly, we dispose of all these writ appeals and writ
petitions.
3. Consequently, all pending interlocutory applications also stand
closed.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(K.M.JOSEPH)
JUDGE
vns