The West Bengal government's efforts to shore up revenue collection received a setback today with the Calcutta High Court holding the entry tax introduced in the 2012-2013 budget as unconstitutional.
Justice Indira Banerjee, holding the imposition of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012, as unconstitutional, observed that it was not compensatory in nature.
The order referred to a Supreme Court judgement which said that imposition of such taxes have to be compensatory in nature and observed that this was not followed in case of this Act introduced by the West Bengal government.
Today's order also noted that the President's assent was not taken for the Act.
The petition, challenging the constitutional validity of the Act, was filed in 2012 by several companies, including Tata Steel, Hindalco and Bharti Airtel.
The government had last year passed the Act to create a compulsory entry tax fund in a bid to fill the state's empty coffers.
The Left Front government had abolished a similar tax in 1995.
The government had said during introduction of the tax in March, 2012 in the Assembly that the tax was aimed at facilitating trade and industry by creating infrastructure like roads, bridges and cold storage chains.
