Odisha government today won a four-year legal battle with Vedanta Aluminium Limited (VAL) over levy of Entry Tax as Supreme Court ruled in its favour.

A nine-judge Constitution bench of the apex court ruled in favour of validity of separate entry taxes on movement of goods, as per the laws of state government. The court held that the state is competent to levy Entry Tax under the Article 304 of the Constitution of India.

With this ruling, Odisha is set to earn Rs 1500 crore and interest on it.

“In pursuance to interim orders of Supreme Court of India and High Court of Orissa, some dealers have paid 50% of Entry Tax due on imported scheduled goods and some dealers have paid one third of Entry Tax due on scheduled goods brought /procured from outside the State which is not manufactured. It is expected that the dealers will pay the balance pending Entry Tax of about Rs 1500 crore and interest thereon after Division Benches vacate the stay,” said state Finance Minister Pradeep Amat.

It may be recalled that VAL had filed a special leave petition (SLP) in the apex court challenging the Orissa Entry Tax Act, 1999.

VAL had contended that goods imported from outside India could not be exigible for Entry Tax which a dealer is liable to pay on the event of entry of goods into a local area for use, consumption or sale.

Notably, Entry Tax is imposed by state governments on movement of goods from one state to another that receives goods.

Various corporate houses and business entities had contended that the imposition of entry tax is violative of the right to freedom of trade and commerce in India, guaranteed under Article 301 of the Constitution.

The bench comprising chief justice T.S. Thakur, justices A.K. Sikri, S.A. Bobde, Shiva Kirti Singh, N.V. Ramana, R. Banumathi, A.M. Khanwilkar, D.Y. Chandrachud and Ashok Bhushan was hearing the case on a daily basis.

In 2003, the plea was referred to a larger Constitution bench and in 2008 the apex court formulated questions to be considered by the Constitution bench.

In 2010, the then chief justice S.H. Kapadia referred the case to a nine-judge bench.