State Lost Legislative Competence to Facilitate Entry Tax Collection After Deletion of Entry 52 — Interim Stay Granted in Batch of 120+ Petitions: Punjab & Haryana HC

The Punjab and Haryana High Court has granted interim stay against coercive recovery proceedings under the Haryana Tax on Entry of Goods into Local Areas Act, 2008 — a statute that was repealed by the Haryana GST Act, 2017 — holding prima facie that after the omission of Entry 52 of List II of the Seventh Schedule to the Constitution by the 101st Amendment (2016), the State of Haryana lost its legislative competence to make any provision facilitating collection of entry tax, whether by amendment or executive order. The interim order was passed by Justices Deepak Sibal and Lapita Banerji on 05.05.2026 in CWP-10193-2025 and a batch of over 120 connected petitions.

The challenge is to three provisos inserted in Section 174(2) of the HGST Act, 2017 by the Haryana GST (Amendment) Act, 2021, and the Removal of Difficulty Order dated 11.12.2024 issued by the Excise and Taxation Department thereunder. While Section 174(1) repealed the 2008 Entry Tax Act and Section 174(2) saved actions already taken under it, the 2021 amendment introduced provisos enabling the Government to pass executive orders to remove difficulties in implementing the repealed Acts. The 2024 Order laid down the procedure for collection of entry tax for the pre-repeal period.

The petitioners' core argument is constitutional: the 2008 Act derived its legislative competence from Entry 52 of List II. Once Entry 52 was omitted by the 101st Amendment (2016), the State lost the power to legislate on entry tax. The 2017 repeal and saving clause under Section 174(2) could preserve past actions, but the 2021 amendment and 2024 executive order go beyond preservation — they create new mechanisms for collection, which the State no longer has competence to enact. The court noted that the Supreme Court's interim stay in the connected BTL EPC Ltd. v. State of West Bengal matter (SLP (Civil) No. 7295 of 2025) remains operative.

The Revenue's counter-position is that Section 174(2) is not under challenge and merely saves pre-existing rights — the 2021 provisos and 2024 Order are only procedural mechanisms for implementing those saved actions, not fresh legislative impositions. The court found this argument insufficient at the prima facie stage and granted interim protection, adjourning for final hearing.