Supreme Court Lets LG Electronics Withdraw Challenge To Rajasthan HC Entry Tax Ruling

The Supreme Court on Wednesday permitted LG Electronics India Pvt. Ltd. to withdraw its Special Leave Petitions challenging a Rajasthan High Court ruling on entry tax, granting it liberty to seek a review before the High Court as the constitutional validity of the provision remains pending.

A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe recorded the submission that the vires of the provision had not been examined in the proceedings leading to the impugned judgment, since constitutional challenges are already pending before the Rajasthan High Court in separate writ petitions.

“As the vires have not been considered in the present proceedings, the petitioner will be entitled to move the High Court by way of a Review Petition for necessary order,” the Bench said, dismissing the SLPs as withdrawn with liberty.

The petitions arose from a common judgment of the Rajasthan High Court at Jaipur dismissing a batch of sales tax revision petitions filed by LG Electronics. The dispute related to the levy of entry tax on goods brought into Rajasthan and subsequently stock-transferred outside the state after six months, without being consumed, used, or sold within Rajasthan.

Before the High Court, LG Electronics had argued that entry tax under Section 3 of the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999, is leviable only when goods are brought for consumption, use, or sale, and that Rule 12(3) of the Entry Tax Rules, which prescribes a six-month cut-off, was contrary to the charging provision.

Rejecting the revisions, the High Court held that Section 3 is the charging provision and that Rule 12(3) merely prescribes a cut-off period to give effect to the levy. It observed that since the vires of Rule 12(3) had not been challenged, the revisions did not give rise to any substantial question of law.

The apex court, however, did not examine the merits of the entry tax dispute.

For Petitioner: Advocates Charanya Lakshmikumaran, AOR, Nitum Jain,Neha Choudhary, Swastik Mishra, Medha Sinha

For Respondent: Additional Advocate General Shiv Mangal Sharma, Sonali Gaur, Nidhi Jaswal, AOR