Allowed

T.Muthusamy, v. the Commercial Tax Officer

Madras HC15 Dec 2021WP/2574/2004

Case brief

AI extract

What is this about?

Allowed a writ petition to quash an entry tax demand against the petitioner for importing a hydraulic mobile crane registered in Pondicherry in 1994, ruling that the exemption under the Tamil Nadu Tax on Entry of Motor Vehicles Act applied despite the vehicle being purchased in 1998.

What did the court decide?

Impugned Assessment Order dated 12.12.2003 quashed; writ petition allowed with consequential relief.

T.Muthusamy, Vs the Commercial Tax Officer — Cheque Dishonour | Madras HC (2021)

¶1

IN THE HIGH COURT OF JUDICATURE AT MADRAS

¶2

Reserved On 08.11.2021 Pronounced On 15.12.2021

¶3

CORAM

¶4

THE HON'BLE MR.JUSTICE C.SARAVANAN

¶5

W.P.No.2574 of 2004

¶6

(Through Video Conferencing)

T.Muthusamy

... Petitioner

Vs.

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

¶11

... Respondent

¶12

Writ Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari, to call for the records in Rc.1279/2000 B1, dated 12.12.2003 on the file of the respondent and quash the same as illegal without jurisdiction.

¶13

For Petitioner : Mr.A.Thiyagarajan, Senior Counsel for Mr.S.Ramesh Kumar.

¶14

For Respondent : Mr.D.Ravichander Government Advocate.

¶15

ORDER

¶16

The petitioner has challenged the impugned Assessment Order dated 12.12.2003 passed by the respondent bearing reference No.RC.1279/2000 B1.

¶17

By the impugned order, the respondent had demanded a sum of Rs.1,18,400/- towards Entry Tax payable under the provisions of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. Apart from the tax, a penalty of Rs.2,36,800/has been demanded from the petitioner.

¶18

Appearing on behalf of the petitioner, the learned Senior Counsel for the petitioner submits that the petitioner had purchased the “MMV Hydraulic Mobile Crane” from M/s.Balagi Agencies in Pondicherry which was originally registered in the name of the said company / owner on 21.11.1994. The learned

¶19

https://hcservices.ecourts.gov.in/hcservices/

¶20

Senior Counsel for the petitioner further submits that the year of the manufacture of the vehicle is 1994 and in terms of proviso to Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, the petitioner is exempted from paying the entry tax. It is submitted that 15 months time prescribed under Clause (a) to proviso to Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 had expired in the year 1996 itself, whereas, the petitioner purchased the vehicle in the year 1998 and therefore, the question of imposing entry tax on the petitioner under the provisions of the aforesaid Act cannot be countenanced.

¶21

The learned Senior Counsel for the petitioner further submits that in view of proposal to demand from the petitioner, the petitioner has also re-transferred the vehicle back to the person in Pondicherry and therefore, the petitioner cannot be made liable to pay the entry tax. The learned Senior Counsel for the petitioner further placed reliance on the decision of the Division Bench of this Court in Rds Projects Ltd. Vs. Commercial Tax Officer, (2007) 8 VST 574. It is submitted that as per the aforesaid decision, no entry is payable as “MMV Hydraulic Mobile Crane” is not a 'motor vehicle' within the meaning of Section 3 of the Tamil Nadu Motor Vehicles Act, 1989. It is submitted that “MMV Hydraulic Mobile Crane” is not a 'motor vehicle' with the meaning of 'motor vehicle' in Section 2(i) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.

¶22

The learned Senior Counsel for the petitioner further submits that the plea of alternate remedy at this stage is not available in the light of the law settled by the Hon'ble Supreme Court in Uflex Ltd. Vs. Government of Tamil Nadu, order dated 17.09.2021 in Civil Appeal Nos.4862 to 4863 of 2021.

¶23

Appearing on behalf of the respondent, the learned Government Advocate submits that to claim the benefit of proviso to Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, the vehicle should have been transferred by the petitioner prior to such claim. In this connection, the learned Government Advocate submits that this Writ Petition is liable to be dismissed in the light of the decision of the Division Bench of this Court in T.Chitty Babu Vs. Union of India, rep. by the Secretary, Department of Law and Justice, (2020) 5 MLJ 577.

¶24

The learned Government Advocate appearing for the respondent also placed reliance on the latest decision of the Hon'ble Supreme Court in The Assistant Commissioner of State Tax and Others Vs. M/s. Commercial Steel Limited, order dated 03.09.2021 in Civil Appeal No.5121 of 2021, wherein, in

¶25

https://hcservices.ecourts.gov.in/hcservices/

¶26

paragraph No.11, it was held as follows:-

¶27

11.The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:

¶28

i. a breach of fundamental rights;

¶29

ii.a violation of the principles of natural justice;

¶30

iii.an excess of jurisdiction; or

¶31

iv.a challenge to the vires of the statute or delegated legislation.

¶32

Heard the learned Senior Counsel for the petitioner and the learned Government Advocate appearing for the respondent. I have perused the impugned order and the provisions of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 and considered the decision rendered by the Division Bench of this Court cited by the learned counsel for the petitioner to quash the impugned order and the decision cited by the learned Government Advocate to state that this Writ Petition is liable to be dismissed on account of the fact that the petitioner has an efficiency remedy.

¶33

I shall first deal with the second argument of the learned Senior Counsel for the petitioner regarding the expression 'vehicle' as defined in Section 2(i) of the Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990, as per which, 'motor vehicle' means a 'motor vehicle' as defined in Clause (28) of Section 2 of the Motor Vehicles Act, 1988.

¶34

In Bolani Ores Ltd. Vs. Sate of Orissa, (1974) 2 SCC 777, the Hon'ble Supreme Court held that the words “adapted for use” cannot be larger in their import by including vehicles which are not suitable for use on road.

¶35

In Rds Projects Limited Vs. Commercial Tax Officer, (2007) VST 574 Mad, the petitioner therein had purchased Volvo Hydraulic Excavator (Model: EC 210BLC) and Volvo Hydraulic Excavator (Model: EC360BLC) against "C" form from M/s. Volvo India Pvt. Ltd. These two machines were to be used for the sea protection works along the Ennore expressway in Chennai and after their purchase, the machines were brought into the State of Tamil Nadu. In the above case, on facts, the Court concluded

¶36

https://hcservices.ecourts.gov.in/hcservices/

¶37

that the excavator in question was mounted on iron plates made into chain such as caterpillar vehicles or military tanks. Such an excavator was used for excavating the earth and loaded in lorries and it was held that it cannot be used on public roads, since the roads would get damaged by the chains. Under those circumstances, the Court held that the Volvo excavators purchased by the petitioner therein which was the subject to levy of entry tax are exactly similar to the excavators which were the subject-matter in Intelligence Officer, Squad No. IV, Kozhikode Vs. Ray Constructions Ltd., (2006) 147 STC 438 and thus allowed the Writ Petition.

¶38

However, 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.

¶39

Therefore, the question of treating the Escorts Crane as “MMV Hydraulic Mobile Crane” of Escorts make purchased by the petitioner cannot be accepted on par with Volvo Hydraulic Excavator (Model: EC 210BLC) and Volvo Hydraulic Excavator (Model: EC360BLC) as in the case of Rds Projects Limited Vs. Commercial Tax Officer, (2007) VST 574 Mad. I shall therefore proceed to examine whether the tax can be levied under Section 3 (1) of Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.

¶40

Section 3(1) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 is the charging section. It reads as under:-

¶41

Levy of tax 4.

¶42

(1) Subject to the provisions of this Act, there shall be levied and collected a tax on the entry of any motor vehicles into any local area for use or sale therein which is liable for registration, or for the assignment of a new registration mark, in the State under the Motor Vehicles Act, 1988 (Central Act 59 of 1988). The rate of tax shall be at such rate or rates, not exceeding twenty per cent, as may be fixed by the Government, by notification, on the purchase value of the motor vehicles;

¶43

Provided that in respect of any motor vehicle which was registered in any Union

¶44

https://hcservices.ecourts.gov.in/hcservices/

¶45

Territory or any other State under the law relating to motor vehicle :-

¶46

(a)before the 10th September 1996, no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of a new registration mark in this State after a period of fifteen months from the date of its registration; (b)on or after 10th September 1996, no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of a new registration mark in this State after a period of eighteen months from the date of its registration.

¶47

Explanation.- For the purpose of this proviso, the expression' law relating to motor vehicle' means the Motor Vehicles Act, 1,939 or the Motor Vehicles Act, 1988, as the case may be.

¶48

(2) The tax shall be payable by an importer in such manner and within such time as may be prescribed.

¶49

Sl. No.	Category	Rate of Tax on purchase Value (3)	the %
(1)	(2)
1.	i. All two wheelers and three wheelers ; and ii.All three wheeler chassis and bodies built Thereon	13 12.5 (from 01.01.2007)
2.	All cars, taxi-cabs, light motor vehicles, trucks, buses, jeeps, motor lorries, chassis of such vehicles and on all bodies built on chassis and on all	13 12.5 ( 01.01.2007)	from
	trailers of these vehicles.

¶50

https://hcservices.ecourts.gov.in/hcservices/

¶51

Sl.	Category	Rate of Tax	on the
No.		purchase Va (3)	lue %
(1)	(2)
3.	All tractors and	6
	trailers.	4 01.01.2007)	(from
4.	Dumpers, loaders, scrappers, crawler’s
	tractor, excavators,
	bull dozers and wheel
	dozers (ii) Paver	9
	finishers, dragnet, druggets, road rollers,	12.5	(from
	crane lorries including	01.01.2007)
	floating cranes,
	breakdown lorries, road
	sweeper lorries,
	spraying lorries, concrete mixerlorries, mobile workshop, mobile radiological units,	13
	ambulances, firefighting units	12.5	(from
	including fire floats, drilling rigs mounted on motor vehicles and floating vessels, platform trucks and fork lift trucks	01.01.2007)
5.	Tankers built on meant	20
	for mounting on motor vehicle	12.5 01.01.2007)	(from
6.	All other vehicles not specifically mentioned	20 125	(from
	in Serial Nos. 1 to 5	. 01.01.2007)

¶52

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.

¶53

https://hcservices.ecourts.gov.in/hcservices/

¶54

The preamble to the Act also makes it clear that it was intention of the law makers to not to levy entry tax on used vehicles which were registered 15/18 months prior to their being imported into the local areas in Tamil Nadu. The preamble is reproduced below:-

¶55

“In order to curb the evasion of sales tax on the sale of motor vehicles which are purchased outside the State and brought into this State, the Government have decided to levy tax on entry of motor vehicles into local areas of this Sate either for use or sale therein which is liable for registration in the State under the Motor Vehicles Act, 1988 (Central Act LIX of 1988). It has also been decided not to levy the tax in respect of vehicles registered in the Union Territory or in other States fifteen months prior to registration in the State and necessary provision has been provided for. In the case of dealers, entry tax shall be leviable on the entry of motor vehicles and tax paid by them shall be adjusted with the tax payable by them under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act No.1 of 1959).”

¶56

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.

¶57

There is no merits in the impugned order and the impugned order is quashed. Therefore, this Writ Petition stands allowed with consequential relief to the petitioner. No cost.

¶58

//True Copy//

¶59

Sub Assistant Registrar

¶60

jen

¶61

https://hcservices.ecourts.gov.in/hcservices/

¶62

¶63

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

¶64