Srinagar, Dec 24: High Court has reserved judgment on the petition filed by telecommunication companies wherein they have challenged the state government’s decision of imposing entry tax on their equipments transported into the state.
Justice Muzaffar Hussain Attar reserved the judgment after hearing arguments of senior counsel Z A Shah representing the petitioners and senior Supreme Court Lawyer M L Verma, Advocate General M I Qadri and H Tasaduq Khwaja who defended the state government.
During the proceedings, the court heard the arguments with regard to constitutional validity of Jammu and Kashmir Entry Tax Act, which has been challenged by the telecommunication companies like Airtel, Aircel, Reliance, Infratel and other companies operating in the state.
The entire debate centered on application and violation of various provisions of the Constitution and the counsels of the parties cited several Supreme Court rulings in support of their contentions.
Counsel for the petitioners, Z A Shah, argued before the court that the companies import goods into the state for creating infrastructure for providing services and the imported equipment is not meant for sales and they can not be charged with entry tax.
The counsel submitted before the court that the decision of the government is against employment generation. “The state government should create investment friendly environment so that employment is generated for the people of the state,” Shah argued.
Arguing on behalf of the telecommunication companies, the counsel informed the court that during the budget speech, the state Finance Minister amid passing the Act had clearly shown that the act was intended to prevent tax evasion by non-dealers, who he said had brought goods and sold them in the market.
The counsel pleaded that there are sufficient provisions under General Sales Tax Act to deal with tax evaders under the said Act.
The defense while arguing for the state argued that that the Entry Tax Act was a charging and remedial act and was a regulatory measure to prevent menace of tax evasion.
“The Act can not be questioned and it was protected under Constitution,” Verma argued.
He submitted that the petitioners were not directly and immediately affected by the operation of the Act. “Being affluent, the companies were in a position to pay the tax,” he told the court.
He also pleaded that the legislature had the power to pass the law because the state Assembly enjoys more powers unlike other states under the Constitution.
The court after hearing the arguments for two days reserved the case for decision, which will be pronounced later.

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