Strict compliance with entry tax payment rules sustains penalty where tax was not paid in the prescribed manner.

Entry tax liability arose when the motor vehicles entered the local area, and payment of sales tax under a different head did not discharge the statutory obligation under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The statutory scheme required compliance in the prescribed manner, and section 4 did not excuse non-payment of entry tax but only provided for reduction or set-off where the Act permitted it. Failure to pay entry tax as required justified the penalty under section 15(2), and the reduced penalty of Rs. 10,000 under section 15(1) was sustained. The challenge to the revisional order therefore failed.

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Issues: Whether the writ petition challenging the revisional order confirming entry tax liability and sustaining penalty under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 deserved interference.

Analysis: The liability to entry tax arose when the motor vehicles entered the local area, and the assessee admittedly did not pay that tax in the manner required by section 3 of the Act. The statutory scheme under section 4 provided only for reduction or set-off of tax liability in the manner contemplated by the Act and did not excuse non-payment of entry tax. The Court held that the Act had to be complied with in the manner prescribed, and that payment of sales tax under a different head could not displace the statutory obligation to pay entry tax. Since the assessee had failed to comply with the statutory requirement, the revisional authority was justified in sustaining the penalty under section 15(2) and in reducing the penalty under section 15(1) to Rs. 10,000.

Conclusion: The challenge to the revisional order failed, and the penalty and entry tax demand were upheld.

Ratio Decidendi: Where a taxing statute prescribes the manner of payment and collection of tax, the liability must be discharged strictly in that manner, and failure to pay the tax as required attracts the statutory penalty.

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