LexVIKRAM CEMENT & ANR. versus STATE OF MADHYA PRADESH & ORS.
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[2015] 4 S.C.R. 497 VIKRAM CEMENT & ANR. v. STATE OF MADHYA PRADESH & ORS. (Civil Appeal No.8192 of 2003) MARCH 17, 2015 [A.K. SIKRI AND R. F. NARIMAN, JJ.] A B Madhya Pradesh Sthaniya Kshetra Me Mal Ke C Pravesh Par Kar Adhiniyam, 1976 - Entry tax - Rate of - Reduced by Notification dated 4.5.1999 for a limited period i.e. from 1.5.1997 to 30.9.1997 - However, Explanation to the Notification stating that if the tax was D already paid at higher rate for that period, would not be refunded to the assessee - Held: The Explanation to the Notification is discriminatory as it carves out two categories of tax payers i.e. one who have already paid the tax and the other who paid the tax after the Notification E was issued - There is no basis for or rationale behind creating the two classes which would have any causal connection with the objective sought to be achieved - The Explanation is also violative of Art. 265 of the Constitution - Therefore, the Explanation to the F Notification is unconstitutional - Notification No.A-3-80-98- ST-V (49) dated 4.5.1999 - Explanation to the Notification - Notification dated 5. 7. 1999 - Constitution of India, 1950 - Arts. 14 and 265. G Allowing the appeal, the Court ' HELD: 1. The Explanation attached to Notification 497 H 498 SUPREME COURT REPORTS [2015] 4 S.C.R. '"'A dated 4.5.1999, or for that matter the Notification dated 5.7.1999, which states that the amount shall not be refunded in any case on the basis that dealer had filed the tax at a higher rate, results in invidious discrimination towards those who have paid the tax B . at a higher rate, like the appellants, when compared with that category of the persons who were defaulters and have now been allowed to pay the tax at the rate of 1 % for the relevant period. The con~equence is that it carves out two categories of tax payers who -c are· made to pay the tax at different rates, even though they are identically situated. There is no basis for creating these two classes and there is no rationale behind it, which wo'uld have any causal connection ..JD· with the objective sought to be achieved. . The Explanation is highly discriminatory in nature. [Paras . 1 and 10] (503-F-H; 504-A-C; 508-D] \D.S. Nakara & Ors. v. Union of India 1983 (2) SCR 1 E 165: (1983) 1 SCC 305; Re.: Special Courts Bill, 1978 1979 (2) SCR 476: (1979) 1 sec 380; EP Royappa v. State of Tamil Nadu (1974) 2 SCR 348 - relie~ on. 2. The effect of tile Notification· dated 4.5.1999 . would be that any person bringing raw materials, yiz. F coal, gypsum and bauxite, within the State of Madhya Pradesh was liable to pay the entry tax only at the rate of 1%. Once this aspect is kept in mind, the legal effect thereof has to be that all the persons including the appellants, who had already paid the tax, were G supposed to pay. the tax at the rate of J % only. Therefore, if they had paid the tax at a higher rate, they were entitled to the refund of excess amount of tax paid. Thus, as the entry tax payable was at the H rate of 1% only, asking any person to pay at a higher Y. ~VIKRAM CEMENT &1ANR. v: STATE OF MADHYA 499 PRADESH & ORS. rate would be clea~ly·violative: of Article 265 of the, A Constitution. Article 265 of the Constitution .has to be read along with Article 14 in the given context. (Paras ~· 12, 13) [508-E-G~ 5d9~A-C] · .. ; .. . 1 \'":;v ts r ,• Kunnathat Thathunni Moopil Nair v. State of Kera/a & · · s Anr. (1961) 3 SCR 77; Corporation Bank v. Saraswati Abharansala & Anr. 2008 (16) SCR 340: (2009) 1 SCC 540 -:,relied on. 3. On a presumpti~n that while a~ding this. ·C Explanation to the Notification, the Government had , kept in mind the principle of unjust enrich~ent, there cannot be any justification for adding the Explan~tion. In order to determine as to whether a particular dealer is in fact entitled to refund or not, the Government D can go into the .issue of unjust enrichment while considering his application for, refund. That would depend on the facts of each case. It cannot .be ~ ~ ~· 1;- presu med that the burden was positively passed on to the buyers by these dealers and, therefore, they ~ E are not entitled to 'refund. Therefore, the imp~gned Expl~Hations in the Notifi~ations"dated: 4.5.1999''and 5.7.1999 are1 unco.nstitutiona1. [Paras 1sj~nCI t16l (51,3- D-H; 514-A] ' ' · ·::1rl 1·r1· • 1 ' . ~ . J . Case Law Reference 1983 (2) SCR 165 1979 (2
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