Notices under repealed law: Gurgaon chamber of commerce flags retrospective taxation

In a representation submitted to chief minister Nayab Saini, the GCCI said that the Haryana Tax on Entry of Goods into Local Areas Act, 2008, was repealed in July 2017 following the rollout of Goods and Services Tax in July 2017. The entry tax levied under the Act of 2008 was also subsumed in the GST regime.

The Gurgaon Chamber of Commerce & Industry (GCCI) has raised concerns over the issuance of fresh assessment notices and tax demands under the Haryana Tax on Entry of Goods into Local Areas Act, 2008, urging the state government to intervene and provide relief to the industry.

The excise and taxation department have served assessment notices citing a 2016 Supreme Court order. The apex court in its November 11, 2016 order in Jindal Stainless Steel Ltd v/s State of Haryana had upheld the constitutional validity of Haryana Tax on Entry of Goods into Local Areas Act, 2008. (HT File)

In a representation submitted to chief minister Nayab Saini, the GCCI said that the Haryana Tax on Entry of Goods into Local Areas Act, 2008, was repealed in July 2017 following the rollout of Goods and Services Tax in July 2017. The entry tax levied under the Act of 2008 was also subsumed in the GST regime.

GCCI president Vikas Jain, in a statement, said that authorities, however, have started issuing assessment notices and raising tax demands, nearly a decade after the law ceased to exist.

Jain emphasised that this is not a case of pending litigation or continuation of earlier proceedings. “No assessment notices or demands were issued during the relevant years when the law was in force. The current actions, initiated after a gap of 8-9 years, are being viewed as retrospective in nature and contrary to the principles of certainty and stability in taxation. Businesses are now being asked to produce records dating back 8-9 years, documents that may no longer be readily available,” Jain said.

The GCCI president said such actions effectively amounted to retrospective taxation, creating uncertainty and negatively impacting investor confidence, including among multinational corporations operating in Haryana.

State officials, however, said that matter is still under litigation.

While acknowledging the authority of the Supreme Court in matters related to entry tax, the Chamber said that reopening assessments after such a long gap could lead to the risk of best judgment assessments, which would be unjust and burdensome.

The excise and taxation department have served assessment notices citing a 2016 Supreme Court order. The apex court in its November 11, 2016 order in Jindal Stainless Steel Ltd v/s State of Haryana had upheld the constitutional validity of Haryana Tax on Entry of Goods into Local Areas Act, 2008. The Act provided for levy and collection of tax on entry of goods into a local area for consumption, use or sale therein and for matters connected therewith or incidental thereto. However, in July 2017 the Haryana Tax on Entry of Goods into Local Areas Act, 2008 was repealed following the enactment of Haryana Goods and Services Tax Act, 2017. The entry tax levied under the Act of 2008 was also subsumed in the SGST Act.

The GCCI has urged the state government that no fresh assessment proceedings or tax demands be initiated at this stage under the Entry Tax Act, 2008 and demands already raised during 2025-26 financial year be withdrawn.

“We clarify that this representation does not cover cases where notices were issued prior to June 2017 and are still pending adjudication. Such cases may continue to be dealt with in accordance with the applicable legal process,’’ the representation said.