TaxTMI 
TaxTMI 
2019 (1) TMI 1714
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....36306, 36461, 36760, 37161 and 37230 of 2007, 1785, 1981, 1982, 4238, 8737, 11146, 11924, 11925, 12137, 12138, 12715, 14633, 15296, 15297, 15682, 15747, 16160 and 16164 of 2008, 5847 of 2010, 10126 of 2011, 16973 and 29772 of 2012, 17843 of 2014 and W. A. Nos. 2192 of 2001, 1600 and 1615 of 2006. For the Petitioner : Satish Parasaran and R. L. Ramani , Senior Counsel, M. Vinayagamurthy , G. Ramadurai , S. Vishnu Mohan , M. Sriram , B. Raveendran , C. Kathiravan , S. A. Rajan , Jacob George , S. Rajasekar , Ms. Rajalakshmi , A. Babu , K. Hariharan , R. Natesan , A. S. Chandrasekaran , A. Ganesan , R. Vivekanandan , Ms. A. Ayesha Parveen , K. Govi Ganesan , R. Parthasarathy , B. Sathish Sundar , T. V. Lakshmanan , M. Md. Ibrahim Ali , Arul Murugan , K. S. Srinivas Rao , T. V. Badrinarayanan , P. Anbarasan , A. S. Baalaji , N. Gopalakrishnan , K. Muruganandam , B. Raviraja , P. Rajkumar , S. P. Meenakshisundaram , J. Naresh Kumar , S. Ramesh Kumar , A. M. Pa....
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....te either for use or for sale therein, which is liable for registration in the State under the Motor Vehicles Act, 1988. 6. Mr. T. V. Lakshmanan, learned counsel appearing for the petitioner would submit that the legislation is only to prevent evasion of sales tax in the State of Tamil Nadu by purchasing vehicles from neighbouring State and not against imported vehicles, which are not liable to sales tax. Further, it is submitted that a plain reading of the provisions of the Act will clearly show that the Act does not purport to levy entry tax on imported motor vehicles as it is aimed only at the goods brought in from other States within the territory of India. 7. Further, it is contended that the provisions of the Act have to be interpreted in the light of the statements of objects and reasons appended to the bill and if it is done so, it is clear that the enactment does not intend to levy entry tax on imported vehicles. In other words, it is submitted that the Tamil Nadu Act intended to prevent evasion of tax and not for the purpose of augmenting revenue and therefore, the enactment cannot be made applicable to levy entry tax on imported vehicles. 8. The learned counsel ....
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....hat after you have construed the words and have come to the conclusion that they can bear only one meaning, duty is to give effect to that meaning. 13. Further, the learned counsel relied on the observations made in the said book to the effect that plain meaning rule applies at the stage when the words have been construed in their context and the conclusion is reached that they are susceptible to only one meaning and in that event, the meaning so derived is to be given effect to irrespective of consequences for no alternative construction is really open. Therefore, it is the submission of Mr.T. V. Lakshmanan that the plain reading itself requires a contextual reading. 14. Reliance was placed on the decision of honourable Supreme Court in the case of Controller of Estate Duty, Gujarat v. Shri Kantilal Trikamlal reported in [1976] 4 SCC 643. This decision was relied on to support his argument that the same word when it occurs in different statute would have a different meaning. In the said decision, the word which was the subject-matter of interpretation was of "disposition" as to its meaning under the provisions therein under the provisions of the Gift tax Act, 1958 and under ....
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....ishments of debts and all other rights at the expense of and made by the deceased in favour of the beneficiary. The substantive definition of 'property' in section 2(15) is not exhaustive but only inclusive and the supplementary operation of Explanation 2 takes in what is not conventionally regarded as 'disposition'. Indeed, 'disposition', even according to law dictionaries, embraces 'the parting with, alienation of, or giving up property . . . a destruction of property' (Black's Legal Dictionary). The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener, can be called 'disposition' in law. Undoubtedly this operation, to use a neutral expression, is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains. This legal result, produced by voluntary action, is 'disposition' within the scope of Explanation 2 to section 2(15). 21. The assessee's contention, effectively prese....
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....and did in fact benefit the other person concerned. The extinguishment of a right may also cover the release of his interest by one joint tenant in favour of another.' (Green's Death Duties, Seventh Edition, Butterworths, page 149) 22. Shri Desai and also Shri Kazi, appearing for the 'accounting persons' in the respective cases, urged that this expansive interpreta tion taking liberties with traditional jural concepts is contrary to this court's pronouncement in Commissioner of Gift-tax v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC). That was a case under the Gift Tax Act, 1958 and the construction of section 2(xxiv) fell for decision. Certainly, many of the observations there, read dehors the particular statute, might reinforce the assessee's stand. This court interpreted the expression 'transfer of property' in section 2(xxiv) and held that the expression 'disposition' used in that provision should be read in the Commissioner of Gift-tax v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC). context and setting of the given statute. The very fact that 'dis position' is treated as a mode of transfer takes the legal concept....
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.... Commissioner of Income-tax [2001] 247 ITR 658 (SC) ; [2001] 3 SCC 359 and submitted that the court must always seek to find out the intention of the Legislature and the intention of the statute from the language used. Further, by relying on the observations made in the said decision, it is submitted that in a taxing statute where literal interpretation leads to a result not intended to sub- serve the object of the legislation another construction in consonance with the object should be adopted. Therefore, it is his submission that literal interpretation has to be eschewed. The object of the enactment has to be seen and the object being one for prevention of evasion of tax and not for augmentation of revenue, the same cannot be applicable for levy of entry tax on imported motor vehicles. 19. The learned counsel referred to the decision of Nine-Judges Bench of the honourable Supreme Court in the case of Jindal Stainless Ltd. v. State of Haryana reported in [2018] 5 GSTR-OL 164 (SC) ; [2017] 12 SCC 1 and referred to paragraph 77 of the judgment of honourable Dr. T. S. Thakur, Chief Justice of India, wherein it was held that an interpretation which is both textual and contextual ha....
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....can be introduced. Therefore, it is submitted that the question of applying external aids by way of referring to objects and reasons does not arise and even if it is done so, the object of enactment is clear and that the levy of entry tax is legally valid. 22. The learned Special Government Pleader referred to the decision of the honourable Supreme Court in the case of Commissioner of Income-tax v. N. C. Budharaja & Company [1993] 91 STC 450 (SC) ; [1993] 204 ITR 412 (SC) ; [1994] Supp (1) SCC 280, wherein, it has been held that it would not be reasonable or permissible for the court to rewrite the section or substitute words of its own for the actual words employed by the Legislature in the name of giving effect to the supposed underlying object. 23. Reliance was placed on the decision in the case of Gurudevdatta VKSSS Maryadit v. State of Maharashtra [2001] 4 SCC 534 and the decision in the case of Mathuram Agrawal v. State of Madhya Pradesh [1999] 8 SCC 667 in support of the said arguments. Thus, it is the submission of the learned Special Government Pleader that the charging section is clear as held by the honourable Supreme Court in the case of Fr. William Fernandez [201....
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.... Act, 1959. 30. Section 2(d) of the Act, viz., "Entry of motor vehicles into a local area" to mean with all its grammatical variations and cognate expressions, means entry of motor vehicle into a local area from any place outside the State for use or sale therein. The definition is a clear indicator to show that the charging section of the Act namely section 3 would apply at the stage when the vehicle enters into a local area. In other words, the taxable event is the entry of the vehicle in a local area and not purchasing in other State or Union Territory. This view is supported by the decision of the honourable Supreme Court in the case of Bhagatram Rajeev Kumar v. Commissioner of Sales Tax, Madhya Pradesh reported in [1995] 96 STC 654 (SC). The Commissioner of Commercial Taxes had issued a Circular No. 9, dated February 9, 1996 to the effect that import of vehicles from outside also amounts to an entry into local area. 31. Section 2(g) defines "importer" to mean a person who brings a motor vehicle into a local area from any place outside the State for use or sale therein ; and who owns the vehicle at the time of its entry into the local area. Section 2(h) defines "local are....
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.... for use or sale therein ; and who owns the vehicle at the time of its entry into the local area. What is interesting to note is that the proviso under section 3(1) gives a benefit in respect of motor vehicles which was registered in any Union Territory or any other State under the Law relating to motor vehicle and under the said category two classes of vehicles have been considered that is those registered prior to September 10, 1996, or registered after September 10, 1996. It is further interesting to note that in respect of the tax payable by the importer, there is no such distinction drawn in the statute and the window which has been given under the proviso is restricted to the vehicles which was registered in Union Territory or other State either before September 10, 1996 or after September 10, 1996. 35. Section 4 of the Act deals with "reduction in tax liability". Sub-section (1) of section 4 states that where an importer of a motor vehicle liable to pay tax under the Act is a dealer in motor vehicles, becomes liable to pay tax under the Tamil Nadu General Sales tax Act and additional sales tax under the Tamil Nadu Additional General Sales tax Act by virtue of the sale of ....
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....orted vehicles. 41. It is the submission of the learned counsel for the petitioners that the enactment is not pari materia in the sense that the Tamil Nadu Entry Tax Act has been enacted to curb evasion and it is not for augmentation of revenue and the scheme of the Act is entirely different from that of the 1994 Act. 42. If we agree with the submissions of the learned Special Government Pleader that both enactments are in pari materia, the Statements of Object and Reasons are identical, then we will have to apply the decision of the honourable Supreme Court in Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; . If that is done, all other contentions raised by the petitioner stands foreclosed and the curtain will have to be drawn. In the event, we do not agree with the submissions of the learned Special Government Pleader, we may be required to examine the contentions advanced by the learned counsel for the petitioners, how the terms occurring in section 3 and section 4 to be interpreted ; What is the contextual reading that has to be done ; to examine whether section 4 to be read into the charging section namely section 3 and if that is done so, it is undoubtedly an enactment fo....
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....common purpose that is to curb evasion of sales tax on motor vehicles purchased from outside the State and brought into the State for use or sale therein, which are liable for registration under the Motor Vehicles Act, 1988. 46. Thus, we are satisfied that the object of enacting the statute by respective Legislative Assemblies of both the States are identical. The argument of the petitioners is that the scheme and spirit of the Act needs to be understood first, for every social legislation has a personality and taxing statute a fiscal philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained. 47. It is the further submission of the learned counsel for the petitioners that in a taxing statute one has to look merely at what is clearly stated and there is no room for intendment and a contextual reading is required to be given because a common word appearing in two different statutes will not have the same meaning. In this regard, reliance was placed on the decision in the case of Controller of Estate Duty, Gujarat v. Shri Kantilal Trikamlal reported in [1976] 4 SCC 643 as well as in the case of Oxford Univer....
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....her note that the charging section under the 1994 Kerala Act is section 3 which reads as follows : "Section 3. Levy of tax Substituted by Act 23 of 1996 with effect from July 29, 1996.-(1) Subject to the provisions of this Act, tax shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein (inserted by Act 10 of 2005). The tax on such goods shall be at such rate or rates as may be fixed by the Government by notification, on the purchase value of goods not exceeding the tax payable for the goods as per the (substituted by Act 23 of 1996 with effect from July 29, 1996) Schedule to the Kerala General Sales tax Act, 1963 or the Kerala Value Added tax Act, 2003: Provided that no tax shall be levied and collected in respect of any motor vehicle which was registered in any Union Territory or any other State under the provisions of Motor Vehicles Act, 1988 (Central Act 59 of 1988), prior to a period of fifteen months or more from the date on which it is registered in the State : Provided further that no tax shall be levied and collected in respect of any (substituted by Act 23 of 1996 with....
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....ed above, section 2(h) has defined what the "local area" means. One more common feature between Kerala enactment and the Tamil Nadu enactment is the definition of local area as defined under section 2(d) of the said enactment. 55. Bearing the above legal principles, we now proceed to take note of the decision of the honourable Supreme Court in the case of Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; and test its applicability to the cases on hand. 56. We are required to undertake this exercise on account of the argument advanced by the learned counsels for the petitioner that the honourable Supreme Court in Fr.William Fernandez [2018] 57 GSTR 6 (SC) ; dealt only with entry tax legislation of the States of Orissa, Bihar, Kerala and Jharkand. We have noted above that the Statement of Objects and Reasons of the Kerala and Tamil Nadu Act are in pari materia as well as the charging section, viz., section 3 and the definition of local area in both enactments. 57. Bearing in mind this similarity, we now go to the decision in Fr. William Fernandez [2018] 57 GSTR 6 (SC). One of the questions which was framed for consideration by the Supreme Court was whether section 2(....
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.... from the provisions of the Act. 60. The entry tax legislations are referable to entry 52 of List II of the Seventh Schedule to the Constitution. Entry 52 also provided a legislative field, namely, 'taxes on the entries of goods into a local areas for consumption, use or sale therein'. Legislation is thus concerned only with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to charge ability of entry tax. In this context reference is made to judgment of Federal Court reported in Miss Kishori Shetty v. King ; AIR 1950 FC 69 (1950 RLW 46). . ." 60. The honourable Supreme Court then proceeded to consider the argument with regard to how the statute requires to be, in other words more or less identical to that which was advanced before us by Mr. T. V. Lakshmanan was considered by the Supreme Court and the same was answered against the assessee on the following terms (pages 40 and 41 in 57 GSTR) : "61. To the same effect judgment of this court in State of Bombay v. F. N. Balsara, AIR 1951 SC 318 is referred. The submission which has been pressed by the learned counsel for the writ petitioners is th....
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.... . The intention of the Legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is rele vant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the Legislature. The statute should clearly and unambiguously convey the three components of the tax law, i.e., the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the Legislature to do the needful in the matter.'." 61. The legal principles which flow from the observations contained in the above paragraphs is that the well....
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.... area from any place outside the local area or outside the State are to be charged with entry tax. Foreign territory would be a place which is not only outside the local area but also outside the State. Further, the Supreme Court rejected the writ petitioner's arguments by stating that they are trying to introduce words of limitation in the definition clause. 65. Statutory interpretation cannot be done, as by process of interpretation, the provision cannot be re-written nor any word can be introduced. Further, it was held that the expression "any place" before the words "outside the State" is also indicative of wide extent. The words "any place" cannot be limited to a place within the territory of India when no such indication is discernible from the provisions of the Act. Further, it was pointed out that the origin of goods has no relevance with regard to chargeability of entry tax. 66. In this context, the decision of the Federal Court in Miss Kishori Shetty v. The King, AIR 1950 FC 69 was referred to. Ultimately, the honourable Supreme Court held that the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area....
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....ch did not agree with the view taken in the case of Sumitomo Corporation (W. P. No. 498 of 1991 decided on dated September 1, 1999), largely on account of the decision of the Division Bench of the Kerala High Court in Fr. William Fernandez [1999] 115 STC 591 (Ker). On account of the differing view, the matter was referred to the honourable Chief Justice to post the case before the Division Bench. We are informed that the matter is still pending. However, the decision of the Division Bench in Fr. William Fernandez [1999] 115 STC 591 (Ker) has been reversed by the honourable Supreme Court and the matter has been decided against the assessee. Therefore, the said decision is an answer to the reference made in the case of Aashish Gulati (W. P. No. 11033 of 2000, dated September 6, 2000). 70. Therefore, in our considered view, there would be no necessity for a separate order to answer the reference and the decision of the honourable Supreme Court in Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; covers the issue referred for consideration of the Division Bench. 71. Coming back to the arguments of Mr. R. L. Ramani, learned Senior Counsel, it is submitted that the above orders w....
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....or that matter to grant administrative waiver. It is a policy decision to be taken by the Government and it is not for the court to dictate as to whether or not the Government should exercise such power. That apart, facts of the case in which Government granted administrative waiver subject to conditions vide G. O. Ms. No. 157, dated April 22, 1996 was entirely different and cannot be applied to the present cases, which arise out of a different enactment, the purport and intent being totally different. First of the decision was in the year 1999 holding that entry tax is leviable on import of vehicles. Another learned single Bench took a different view but did not distinguish the earlier decision, but chose to follow the decision of the Division Bench of the Kerala High Court in Fr. William Fernandez reported in [1999] 115 STC 591 (Ker). In the third decision, there has been a reference because in the third decision, the first decision was noted. However, we need not labour much to make a further probe on this issue because the decision of the Division Bench of the Kerala High Court in Fr. William Fernandez reported in [1999] 115 STC 591 (Ker) has been reversed by the honourable Sup....