2021 (5) TMI 803 - HC - VAT and Sales Tax

Court declines to examine challenge to Entry Tax Circular on out-of-state vehicle sales, leaves right to challenge open.

M/s. Susee Automobiles (Private) Limited Versus The Commissioner of Commercial Taxes, Chennai, The Assistant Commissioner (CT), Palakkarai Assessment Circle, Trichy, The Assistant Commissioner (CT) (FAC), Madurai Rural (South), Madurai

The Court declined to examine the challenge to the Circular mandating Entry Tax on motor vehicles purchased from outside the state for sale in Tamil Nadu ... Levy of Entry Tax on purchase of motor vehicle from the outside state for sale in Tamil Nadu - validity of Circular dated 09.07.2002 - HELD THAT:- The circular issued in July 2002 has been challenged only in August 2015. The Assistant Commissioner, Palakkarai Assessment Circle, Trichy, appears before this Court through Video Conferencing and states that following the introduction of GST regime, the impugned circular has become infructuous. However, this circular would definitely have relevance in respect of the assessments made prior to 01.07.2017. There is only a general challenge to the validity of the impugned circular. If on account of the circular the rights of the assessee has been affected, then challenge will certainly lie - Leaving open the right of the assessee to question the validity of the impugned circular if he had suffered any order of assessment by applying the circular, these writ petitions are closed. Issues:Challenge to the validity of Circular dated 09.07.2002 mandating Entry Tax on motor vehicles purchased from outside state for sale in Tamil Nadu.Analysis:The petitioner challenged the Circular issued by the first respondent in 2002, contending that the authorities were not justified in mandating the payment of Entry Tax on the purchase of motor vehicles from outside the state for sale in Tamil Nadu. The petitioner's counsel argued that Entry Tax should only be payable when the motor vehicle is used or sold, citing relevant case laws to support their contention.The Court acknowledged the considerable force in the petitioner's contentions but noted that the challenge to the circular was brought only in August 2015, despite its issuance in July 2002. The Assistant Commissioner stated that due to the introduction of the GST regime, the impugned circular had become irrelevant. However, the Court recognized that the circular might still be relevant for assessments made before 01.07.2017. While no specific case was presented, only a general challenge to the circular's validity, the Court emphasized that if the rights of the assessee had been affected by the circular, a challenge would be justified.The Court declined to examine the issue in the abstract and closed the writ petitions, leaving open the right of the assessee to question the circular's validity if they had suffered any adverse assessment due to its application. The Court emphasized that if the circular had impacted the rights of the assessee, a challenge would be permissible. The judgment concluded by closing the connected miscellaneous petitions without any costs.