Delhi HC stays govt notification on cigarettes

NEW DELHI: The Delhi High Court on Wednesday stayed the Delhi government''s notification imposing luxury tax on certain goods including cigarettes in the National Capital Territory under the Delhi Luxury Tax on Commodities Act.
While issuing notice to the Centre, Delhi government and Commissioner of Sales Tax, a Bench comprising Justice S B Sinha and Justice A K Sikri stayed the notification.
The Bench was hearing a petition by ITC.
Senior advocate D D Thakur, appearing for ITC, said the Supreme Court had granted interim stay on legislations framed by Uttar Pradesh, West Bengal and Andhra Pradesh that imposed similar taxes on cigarettes.
He said it was beyond the legislative competence of Delhi Assembly to pass Act to facilitate imposition of luxury tax on certain goods and a subsequent notification by Lt Governor for its implementation was contrary to Constitutional provisions.
Since no Presidential assent for the Act had been taken by the Delhi Government before its implementation, Lt Governor''s notification violated the Article 301 of the Constitution, Thakur contended.
The Lt Governor''s notification of April 22 had fixed luxury tax on cigarettes and smoking mixture at 20 and 50 per cent respectively under the provisions of the Act that was passed by the Delhi Assembly on April 9, 2001.
The Act also provides for impostion of luxury tax on certain other goods up to 50 per cent, ITC''s petition said.
The Kerala High Court and the Allahabad High Court had struck down similar legislations passed by the respective state governments, Thakur said, adding the tax under the Act would affect free inter-state trade.