Excess entry tax refund after sales tax set-off is available, subject to account verification and lawful computation.

Under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, entry tax liability is reduced to the extent of sales tax payable on the vehicle sale, and any tax paid in excess of the amount legally due may be refunded. The Madras High Court noted that the earlier view treating entry tax and sales tax as wholly separate was not decisive. It held that if excess entry tax remained after the permissible set-off, the assessing officer could determine the excess from the dealer's books of account and grant refund, subject to the dealer producing the relevant accounts for verification.

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Issues: Whether the petitioner was entitled to refund of excess entry tax after set-off against sales tax under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.

Analysis: The entry tax regime under Section 4 permits reduction of the dealer's liability to the extent of sales tax payable on the sale of the vehicles, and Section 11 provides for refund of tax paid in excess of the amount legally due. The earlier view treating entry tax and sales tax as wholly separate so as to deny refund was not accepted as determinative. The Court held that if, after giving the permissible set-off, any excess entry tax remained with the authority, the assessing officer could compute the excess with reference to the books of account and refund it to the dealer. The petitioner was required to cooperate by producing the relevant accounts for verification.

Conclusion: The petitioner was entitled to have the impugned rejection set aside and to seek refund of any excess entry tax found due after set-off, subject to verification of accounts.

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