OCL Limited Vs State of Orissa & Ors (Supreme Court)
Date- 4th November, 2022
Sub-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 243-Q, 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.

The three judges bench of Supreme Court including CJI was dealing with a vexatious issue relating to levy of entry tax by holding the industrial townships to be local area within the ambit and scope of the Orissa Entry Tax Act, 1999 whereas the appellants like OCL India Limited and SAIL in the State of Orissa and HIndalco in the State of UP having lost in Orissa and Allahabad high courts contended that the levy of entry tax was against Article 301 of the Constitution of India as per which trade, commerce and intercourse throughout the territory of India shall be free. They also relied on the earlier decision of the Supreme Court in the case of Jindal Stainless Limited & Anr Vs State of Haryana & Ors. The court however refusing to agree to the argument that when a notification is issued, excluding industrial areas or estates from municipal areas, they cease to be local areas, and cannot be treated as such for the purpose of levy of entry tax, dismissed the appeals by holding that the industrial townships were local areas and levy of entry tax was within the framework of constitution of India.

Ramesh Patodia
04-11-2022