M/S SHAKTIKUMAR M. SANCHETI AND ANR. versus STATE OF MAHARASHTRA AND ORS.

Citation: [1994] SUPP. 6 S.C.R. 98 · Decided: 25-11-1994 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Dismissed

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Judgment (excerpt)

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MIS SHAKTIKUMAR M. SANCHETI AND ANR. 
v. 
STATE OF MAHARASHTRA AND ORS. 
NOVEMBER 25, 1994 
[KULDIP SINGH, R.M. SARAI AND B.L. HANSARIA, JJ.] 
Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 
1987-Section 3-Tax on entry of vehicles into a local area-Validity-
Expression 'local area'-Meaning-Whether levy of tax was bad/or being 
vague and contrary to concept of local area-Held, No-Levy being in 
addition to octroi realised by local authorities-Whether it amounted to 
double taxation-Held, No-Whether levy can be said to be invalid merely 
because measure of levy is to be purchase value of vehicle-Held, No. 
The appellants, contractors or dealers of motor vehicles who 
purchased vehicles from outside the State and brought them in the 
State of Maharashtra, are aggrieved by levy of entry tax on such 
vehicles under Maharashtra Tax on Entry of Motor Vehicles into Local 
Areas Act, 1987. In writ petitions filed in the High Court, it was 
claimed that the levy was a colourable exercise of the legislative power 
of the State as Entry 52 of List II of the Vllth Schedule of the 
Constitution of India did not permit imposition of such tax. It was also 
urged that the legislation impeded freedom of the appellants under 
Article 301 of the Constitution. Dismissing the writ petitions, the High 
Court held that the impugned Act was a valid piece of legislation as 
various entries in the Vllth Schedule were merely fields and not the 
powers of the legislation. It was held that the submission that the entry 
tax being leviable in the local area it could have been levied on 
movement of goods from one local area to another local area in the 
State only and not to more than one local area covering the entire State 
was devoid of any merit. High Court did not' find that the provision 
violated the constitutional guarantee under Article 301 or there was 
any double taxation involved in it. 
These appeals have been filed against judgment and order of the 
High Court. In this Court the levy was challenged on the ground that 
the incidence being on the purchase value of the motor vehicle it was in 
nature of purchase tax. The tax on entry of vehicle in the State as such 
was bad being vague and contrary to the concept of the local area as 
understood. It was urged that the legislature in treating the entire State 
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S. M. SANCHETI v. STATE 
99 
as local area has gone beyond the permissible limits carved out of it by A 
the Constitution. It was also urged that it being in addition to the tax 
levied and collected as octroi by local authorities was violative of 
Article 286 of the Constitution. 
Dismissing the appeal, this Court 
HELD : 1.1. Under the provisions of the Maharashtra Tax on 
Entry of Motor Vehicles Into Local Areas Act, 1987, the charge is on 
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the entry of vehicle into a local area for use or sale and not on its 
purchase. So long as the levy is on the entry of the vehicle into a local 
area for use or sale therein it cannot be said to be invalid merely 
because the measure of levy is the purchase value of the motor vehicle. 
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(100 D, 102 F] 
1.2. The expression 'local area' has been used in various Articles of 
the Constitution, namely 3 (b), 12, 245 (1), 246, 277, 321, 323-A, and 
37l(D). They indicate that the constitutional intention was to D 
understand the 'local area' in the sense of any area which is 
administered by a local body, may be corporation, municipal board, 
district board etc. The High Court rightly held that the definition does 
not comprehend entire State as local area; .the use of word 'a' before 
'local area' in the section is significant. The taxable event, according to 
High Court, is not the entry of vehicle in any area of the State but in a E 
local area. It cannot, therefore, be struck down on that ground. 
(103 C, E] 
Diamond Sugar Mills Limited and Anr. v. State of U.P. and Anr., AIR 
(1961) SC 652, distinguished. 
State of Karnataka and Ors. v. Mis Hansa Corporation, AIR (1981) 
SC 463, relied on. 
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1.3. Tax levied under different legislations enacted in exercise of 
constitutional power are not rendered bad on assumption that it 
amounts to double taxation. The taxable event for any entry tax is not G 
same as for octroi; nor it is by the same authority for the same purpose 
and for same period. (103 F] 
Sri Krishna Das v. Town Area Committee, Chirgoan, (1990) 3 SCC 
645, relied on. 
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SUPREME COURT REPORTS 
[199

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