2023 (11) TMI 407 - HC - VAT / Sales Tax

Order barred by limitation under Section 8(5) of TN Motor Vehicles Tax Act; forklift not a taxable motor vehicle

The HC held that the impugned order was barred by limitation under Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, ... Validity of impugned order - barred by limitation under Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act 1990 - HELD THAT:- The Division Bench in SRI BALAKRISHNA TRANSPORT VERSUS COMMERCIAL TAX OFFICER, TAMBARAM I ASSESSMENT CIRCLE, CHENNAI [2009 (2) TMI 787 - MADRAS HIGH COURT] has categorically held that the authorities cannot make an assessment when the assessee had not filed any return. In other taxes like income tax there are provisions to take action if the assessee has not filed any return. The income tax authorities are empowered to take action, to impose penalty, if returns are not filed. Such provisions are not available in the present Act. The Act only states every person liable to pay tax under the Entry Tax Act ought to file a return. If return not filed, then the Act is not empowering the authorities to take action. In such circumstances, the authorities are not having jurisdiction to pass any order if return is not filed. In the present case since the order is passed beyond the period of limitation of three years, the order cannot be sustained. Whether as per the definition of “Motor Vehicle”, the “Fork Lift” will not come under the definition or not? - HELD THAT:- On perusing the photos and brochures of the said vehicle, this Court is of the considered opinion that the vehicle can be used only in the enclosed premises and it cannot be used on the roads. Therefore, on perusing the brochures and the usage of the vehicle, this Court is of the considered opinion that the vehicle cannot come under the definition of “Motor Vehicles”. Section 3 clearly states if vehicle is not liable for registration, then the respondent is not empowered to levy tax. In the present case, the vehicle is not liable for registration. Therefore, the respondent is not empowered to levy tax. When there is no jurisdiction to levy tax, then the respondent cannot levy tax. Since under Article 265 of the Constitution of India, any tax can be levied, by the authority of law. If there is no authority, the respondent is not empowered to levy tax. Therefore, the respondent is not empowered to levy tax, since there is no jurisdiction. This Court is of the considered opinion that the impugned order is liable to be quashed and accordingly quashed - Petition allowed. Issues Involved:The issues involved in the judgment are the validity of the impugned order dated 02.09.2021 under Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act 1990 and the assessment of tax on the purchase of Fork Lift under the Act.Validity of Impugned Order:The petitioner, engaged in cargo handling activities, purchased a Fork Lift for business purposes within enclosed premises. The respondent issued an assessment notice in 2011 for the purchase made in 2005, beyond the three-year limitation period under Section 8(5). The respondent argued that since no returns were filed, the limitation period starts from the date of knowledge. The petitioner cited a judgment stating that authorities cannot assess if no return is filed. The court upheld the petitioner's argument, emphasizing the lack of provisions for assessment when returns are not filed, leading to the quashing of the impugned order.Classification of Fork Lift:The petitioner contended that the Fork Lift purchased is not a 'Motor Vehicle' under the Act as it is used only within enclosed premises and not on public roads. The respondent argued that any mechanically propelled vehicle for road use falls under the definition. The court, after reviewing vehicle brochures and usage, concluded that the Fork Lift is designed solely for enclosed premises, thus not meeting the definition of a 'Motor Vehicle.'Levy of Tax and Jurisdiction:The respondent levied tax under Section 3 of the Act, which mandates tax on motor vehicles liable for registration. As the Fork Lift was not liable for registration, the court held that the respondent lacked jurisdiction to levy tax. Without the authority to levy tax, the respondent's action was deemed unauthorized. The court emphasized that under Article 265 of the Constitution of India, taxes can only be levied with legal authority, which was absent in this case. Consequently, the court quashed the impugned order.Conclusion:The High Court of Madras allowed the Writ Petition, quashing the impugned order dated 02.09.2021 due to being beyond the limitation period and the lack of jurisdiction to levy tax on the Fork Lift purchase. The court ruled in favor of the petitioner, highlighting the absence of provisions for assessment without filed returns and the specific usage of the Fork Lift within enclosed premises, exempting it from the definition of a 'Motor Vehicle' under the Act.