Strict interpretation of entry tax law allows set-off for sales tax paid on vehicle bought outside Kerala.

Section 4(2) of the Kerala Tax on Entry of Motor Vehicles into Local Areas Act, 1994 was construed to allow a non-dealer purchaser who bought a motor vehicle outside Kerala for personal use and brought it into Kerala to claim reduction of entry tax by the sales tax already paid in the other State. The Court held that the words "in any Union Territory or any other State" qualified the place of purchase, not the place of use, and that a taxing provision must be read strictly on its plain language without adding restrictions from supposed legislative intent or revenue concerns. An administrative circular could not override the statute, and the contrary demand was unsustainable.

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Issues: Whether section 4(2) of the Kerala Tax on Entry of Motor Vehicles into Local Areas Act, 1994 entitled a non-dealer purchaser of a motor vehicle for his own use outside Kerala to reduction of entry tax by the amount of sales tax already paid in the other State.

Analysis: Section 4(2) was held to be clear and unambiguous. The qualifying words "in any Union Territory or any other State" were read as qualifying the place of purchase, not the place of use. The provision therefore covered a person who bought a vehicle outside Kerala for his own use and brought it into Kerala. The Court also held that the statute had to be construed on its plain language in a taxing matter, and that legislative intent or revenue consequences could not be used to add words to the provision. The administrative circular could not override the statute or supply a restriction not found in the text. The rule framed under the Act also supported the same construction by providing set-off of tax actually paid in another State or Union Territory.

Conclusion: The purchaser was entitled to reduction of entry tax to the extent of sales tax paid outside Kerala, and the contrary demand was unsustainable.

Ratio Decidendi: A taxing provision must be interpreted strictly on its plain language, without adding words on the basis of supposed legislative intent, and a statutory tax reduction cannot be curtailed by a circular that is inconsistent with the enactment.

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