LexM/S. OCL INDIA LTD versus STATE OF ORRISA AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B C D E F G H 669 M/S. OCL INDIA LTD. v. STATE OF ORRISA AND ORS. (Civil Appeal No. 2348 of 2004) NOVEMBER 04, 2022 [UDAY UMESH LALIT, CJI, S. RAVINDRA BHAT AND J. B. PARDIWALA, JJ.] Orissa Entry Tax Act, 1999 – Orissa Municipal Act, 1950 - The Constitution of India – Article 243Q, Schedule 7th Entry 52 of List II – Whether the exclusion of an industrial area or areas from the limits of municipal councils or municipalities under the state laws in exercise of statutory power or by virtue of a declaration under proviso to Article 243Q, would result in that area ceasing to be a “local area” within Entry 52 of List II and consequently precluding State from levying and collecting entry tax from those areas – Held: The nature of services provided in industrial areas are relevant factors taken into account by the State or Governor while issuing exemptions under municipal laws or proviso to Article 243Q (1) – These, however, do not in any manner impact or undermine the fact that such industrial areas or estates are equally “local areas” – Diamond Sugar Mills itself acknowledged that the word “local” means relating to or “pertaining to a place” – Supreme Court also very pertinently held that a local area is one which is administered by municipal law, district board or a local board, union board, a panchayat or some body constituted by the Government for the governance of local affairs of any part of the State – The application of state laws regarding industrial areas, therefore, squarely falls within the expression “description of a body constituted for the purposes of local affairs of the State” since no one denies that industrial areas are also part of the State - The object of the levy, i.e., entry tax, is the regulation of entry of goods in a regular area for consumption, i.e., manufacture, use or sale – There is no dispute that entry of goods into an industrial area or estate is for their use for manufacturing or for processing or for the purposes of their delivery as their ultimate point of destination, i.e. for the purpose of their “consumption, use or sale” within that area – It could even be that the goods enter within the industrial [2022] 18 S.C.R. 669 669 A B C D E F G H 670 SUPREME COURT REPORTS [2022] 18 S.C.R. area or estate, as the ultimate point of destination for their use – In any case, the levy would be attracted because the incidence is the entry into the local area. Dismissing the special leave petition and appeals, the Court HELD: 1.1 The provisions in Part IX-A of the Constitution provide for constitution of municipalities, their duration, powers and responsibilities of authorities of the municipalities. Municipalities were conceived as vibrant democratic units of self-governance. Their term or duration was provided to be for five years; regular elections, to elect representatives of municipalities was contemplated. The special features of the municipalities contemplated by the provisions contained in Part IX-A, however need not be present in other bodies created by law, such as Boards, etc. Such statutory bodies, like industrial estates may perform some municipal functions. However, that some municipal functions are performed by such bodies ipso facto does not result in their acquiring the features of municipalities which are contemplated by Part IX-A of the Constitution. [Para 43][691-F- H; 692-A] 1.2 The introduction of Part IX-A by the 74th Amendment to the Constitution was with the intention of strengthening units of local self-government, and ensuring that they were subjected to minimum democratic standards. The proviso to Article 243-Q (1), therefore, has to be read in context, that industrial areas and estates, administered in terms of some legal regime, where some municipal services were provided, could be exempt from the requirements spelt out in Part IX-A of the Constitution. These provisions spell out the elements of democratic governance, such as representation of different Sections of society, regularity of elections, a three-tier structure of local government, reservation, mechanism for deciding election disputes, and elected bodies which were tasked with decision making in regard to various heads or subject matter, that concerned people at village, taluk and District levels. [Para 44][692-B-E] 1.3 The focus of provisions of Part IX-A of the Constitution inserted through the 74th Amendment was on local self- A B C D E F G H 671 governance and all provisions concerning it. It had no rel
Excerpt shown. Read the full judgment & AI analysis in Lexace.