Entry Tax On E-Commerce Sites Prima Facie Unconstitutional, Says Allahabad HC [Read Order]

The Allahabad High Court has observed that the levy of entry tax on e-commerce sites is prima facie unconstitutional as the state legislature has no authority or competence to do so.This observation was made by the Bench comprising Justice Ravindra Nath Mishra and Justice Amreshwar Pratap Sahi, in an interim order on a plea by Instakart Services Pvt. Ltd. which had challenged the levy of entry tax. It had contended that this levy would create unlawful fiscal barriers that would result in unprecedented price hike and would be an additional burden not only on the traders, but also on the public at large. The amendment is not only unconstitutional, but is also against the public interest, it was contended.The state, relied on Clause 19 of the Constitution (One Hundred and First Amendment) Act, 2016, to contend that the Legislature was competent to introduce the amendment. It further submitted before the court the state had to replenish its revenue and the said levy cannot be said to be unjustified.The court observed that amendment introduced is completely beyond the authority and competence of the state legislature as it ex facie introduces the levy of tax, which was not existing under the old Act, and therefore, could not be introduced by way of the amendment. The court also said Clause 19 of Constitution (One Hundred and First Amendment) Act, 2016, does not in any way prima facie saves the imposition of the tax through online purchase or e-commerce, particularly for personal use. Thus, there is a complete lack of legislative competence as such the impugned provisions are rendered unconstitutional, it observed.The court then ordered that Instakart is entitled to trade through e-commerce and on online purchase system subject to a condition that shall furnish bank guarantee to the satisfaction of the concerned authorities. The court has posted the matter for further consideration on 20th January.Read the Order here.This article has been made possible because of financial support from Independent and Public-Spirited Media Foundation.

Entry Tax On E-Commerce Sites Prima Facie Unconstitutional, Says Allahabad HC [Read Order]

Ashok KM

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