2021 (12) TMI 900 - HC - VAT and Sales Tax

Court quashes Entry Tax Assessment Order, upholds exemption claim, no costs imposed

T. Muthusamy Versus The Commercial Tax Officer, Woraiyur Assessment Circle, Trichy – 1.

The Court quashed the Assessment Order demanding Entry Tax and penalty under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The ... Levy of Entry Tax - purchase of MMV Hydraulic Mobile Crane - Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 - HELD THAT:- On facts of the present case and a collecting, a reading of the documents filed indicates that the imported Escorts Crane was registered as a 'motor vehicle' before the Pondicherry Regional Transport Authority. It was registered as “MMV Hydraulic Mobile Crane” and was registered as PY 01 C 9412 on 21.11.1994. It was initially purchased by CRANE OPERATORS and later sold to one Mr.Shanmugam of M/s.Balagi Agencies and thereafter it was purchased by the petitioner on 03.10.1998. A reading of the proviso (b) to Section 3(1) of the Act makes it clear that no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of new registration mark in Tamil Nadu after a period of 15 or 18 months from the date of its registration, as the case may be, as per proviso (a) & (b) to Section 3(1) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The vehicle was first registered in the year 1994 in the Union Territory of Pondicherry. It was imported into the State by the petitioner only during October, 1998. Therefore, the purchase by the petitioner was beyond the period of 15/18 months after its registration. It was not necessary for the petitioner to have a prior registration of the vehicles in his own name in the Union Territory of Pondicherry to claim exemption under proviso (b) to Section 3(1) of the Act. There is no scope to levy entry tax on the petitioner under proviso (b) to Section 3(1) of the Act on the imported “MMV Hydraulic Mobile Crane” purchased from a seller in Union Territory of Pondicherry. Petition allowed. Issues:Challenge to Assessment Order dated 12.12.2003 demanding Entry Tax and penalty under Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.Analysis:1. The petitioner challenged the Assessment Order dated 12.12.2003 demanding Entry Tax and penalty under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The petitioner claimed exemption from paying the entry tax based on the proviso to Section 3 of the Act, as the vehicle was purchased after the expiry of the prescribed time limit for tax imposition. The petitioner also argued that the vehicle in question did not qualify as a 'motor vehicle' under the Act. The petitioner cited legal precedents to support their arguments.2. The respondent contended that for the petitioner to claim the benefit of the proviso to Section 3 of the Act, the vehicle should have been transferred prior to such claim. The respondent relied on a Division Bench decision to support their argument. Additionally, the respondent cited a recent Supreme Court decision emphasizing the availability of alternate remedies before resorting to a writ petition under Article 226 of the Constitution.3. The Court analyzed the definition of 'motor vehicle' under the Act and referred to legal precedents to determine the scope of the term. The Court distinguished the present case from previous cases involving similar vehicles, emphasizing the specific details of the imported Escorts Crane in question. The Court examined the provisions of Section 3(1) of the Act, which governs the levy of tax on the entry of motor vehicles into local areas.4. The Court highlighted the proviso to Section 3(1) of the Act, which exempts vehicles registered in other states or Union Territories prior to specified dates from entry tax if the owner applies for a new registration mark after a certain period. The Court interpreted the legislative intent behind the Act, emphasizing the exemption for used vehicles registered before being imported into Tamil Nadu.5. Based on the analysis, the Court found no merit in the impugned Assessment Order and quashed it. The Court allowed the Writ Petition filed by the petitioner, providing consequential relief without imposing any costs.In conclusion, the judgment delves into the intricacies of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, examining the exemption provisions, the definition of 'motor vehicle,' and relevant legal precedents to arrive at a decision favoring the petitioner's claim for exemption from entry tax.