In Brief
This landmark judgment upholds the constitutional validity of entry tax laws in Orissa, Bihar, Kerala, and Jharkhand. The Supreme Court held that states have legislative competence under Entry 52 of List II to levy entry tax on goods imported from outside India when such goods enter local areas for consumption, use, or sale. The court distinguished between the taxing event for customs duties (imposed by Parliament when goods cross customs barriers) and entry tax (imposed by states after goods are released for home consumption). The American 'Original Package' doctrine was rejected as inapplicable in India. The court affirmed that imported goods lose their immunity from state taxation once customs formalities are completed. Appeals against Orissa and Bihar High Court judgments were dismissed; Kerala's appeals were allowed; and Jharkhand's appeal was allowed, with liberty given to challenge entry tax on grounds of discrimination under Article 304(a)."
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