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2011 Supreme(AP) 451
2012 (2) ALD 250
High Court of Andhra Pradesh
THE HONOURABLE MR. JUSTICE V.V.S.RAO & THE HONOURABLE MR. JUSTICE RAMESH RANGANATHAN
M/s.Vijaya Traders, Kadapa, represented by its Managing Partner, Mr.C.Vijay Sekhar Reddy & Others
Versus
The Commercial Tax Officer–I, Kadapa & Others
WRIT PETITION Nos.12455 of 2005, 21260, 21316, 23253 and 25323 of 2007, 8204, 10110 and 11216 of 2008, 1564, 7970, 21096 and 25856 of 2009, 5946, 6231, 6713, 6864, 7227, 9010, 10922, 11276, 12155, 12213, 12246, 12355, 12358, 14378, 14404, 14410, 14834, 15012, 15733, 21336, 21706, 26105, 30662, 33868 of 2010 AND 2348 of 2011
Decided On : 22-06-2011
For the Petitioners:M/s. S.Krishna Murthy, Shaik Jeelani Bash, R.Raghunandan, V.Bhaskar Reddy, S.Dwaraknath, M.V.J.K.Kumar, B.Srinivas, Advocates.
For the Respondents:A.V.Krishna Kaundinya and P.Balaji Varma Advocates.
Headnote:
Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 – Section 3 – Constitution of India – Articles 14,19(6),38,39,248,269,286,304(a)(b),248,301,303 – Constitution (Forty-sixth Amendment) Act, 1982 – Motor Vehicles into Local Areas Act, 1987 – 2(28),3(1) – Assam Taxation (on Goods Carried by Roads and Inland Waterways) Act, 1954 – Rajasthan Motor Vehicles Taxation Act, 1951 – Andhra Pradesh Entry of Goods into Local Areas Tax Act, 1987 – Entry Tax Act – Municipalities Act, 1922 – Section 66(1)(b) – Probation of Offenders Act, 1958 – Section 6 – Indian Penal Code, 1860 – Section 34 – Juvenile Justice Act, 1986 – Juvenile Justice (Care and Protection of Children) Act, 2000 – Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 – Section 12 – Taxes on Entry of Goods into Calcutta metropolitan Area Act, 1972 – Section 14(3) – Parent Act – Section 11 – Tamil Nadu Cinemas (Regulation) Rules, 1957 – Rule 14 – Taxation Issue – The challenge in these writ petitions is Though the attack is against the constitutional vires of charging Section 3 of the Act, without which the other provisions cannot survive, the entire Act may have to suffer invalidation if the petitioners succeed in these cases – Held, that Section 3 of the impugned Act does not suffer from any of the infirmities canvassed by the petitioners – The Act is constitutionally valid and within the competence of the State Legislature – The question whether the vehicles purchased and imported by the petitioners are motor vehicles or not, in view of our conclusions on Part VIII supra, has to be decided at the stage of assessment by the competent officer – Therefore, we deem it appropriate to set aside the impugned assessment orders and remit them to the respective assessing officers – Keeping in view the principles laid down by the Supreme Court as summarized in this Judgment, they shall now proceed to consider the contentions on this question alone, if necessary by obtaining an opinion from any Gazetted Officer of the Department of Transport – This exercise shall be completed within a period of eight weeks from the date of receipt of a copy of this Order, whereafter it shall be open to the petitioners to avail the alternative remedy provided under the impugned Act read with provisions of the VAT Act – Court also give liberty to the petitioners to claim refund of tax over and above 12% if it is paid by any of the petitioners – If any such claims are made, the respective assessing officers/Government authority shall dispose them of expeditiously and refund the amount of excess entry tax promptly – Writ Petition Disposed
V.V.S.Rao, J.
PART - I
INTRODUCTION
The challenge in these writ petitions is to the Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 (A.P.Act No.26 of 1996) (the Act, for brevity). Though the attack is against the constitutional vires of charging Section 3 of the Act, without which the other provisions cannot survive, the entire Act may have to suffer invalidation if the petitioners succeed in these cases.
THE BACKGROUND
The following background of these cases is taken from W.P.Nos.1564 of 2009, 6713 of 2010 and 2348 of 2011.
(A) W.P.No.1564 of 2009
The petitioner, a company having its registered office at Hyderabad is engaged in the business of civil contracts, consulting and engineering. They are registered dealers under the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act, for brevity) on the rolls of the Commercial Tax Officer, Jubilee Hills Circle. M/s.Patel Soma JV awarded them works contract of left main canal of Polavaram Project and Hiramandalam Reservoir of Vamsadhara Project. The contract inter alia includes excavation, lining the canal and construction of CM and CD works. For these works, the petitioner purchased three wheel loaders viz., Model TWL-3036 with 2.00 cum Bucket and Kit from M/s.Telco Construction Equipment Limited, Jamshedpur. The petitioner approached the road transport authority (RTA), Rajahmundry for registration of the vehicles. He insisted for payment of entry tax at 12.5% of the value of the wheel loaders. The petitioner would contend that the tax proposed under Section 3 of the Act restricts inter-State trade and commerce in violation of Articles 301 and 304(a) of the Constitution of India (hereafter, the Constitution). According to the petitioner, the levy is not a compensatory tax and therefore, is not saved by Article 304(b) of the Constitution, that the impugned Act in the absence of Presidential assent, is a device to circumvent the State’s disability to tax inter-State purchases prohibited by the Articles 269 and 286 of the Constitution.
(B) W.P.No.6713 of 2010
M/s.Kesoram Cements is in the business of manufacture and sale of cement. They are dealers under the VAT Act. During 2007-08 and 2008-09 the petitioner purchased earth moving equipment, rear dumpers from M/s.Bharat Earth Movers, Mysore worth Rs.6,53,56,704/- for the purpose of mining limestone. According to them, they are not motor vehicles, they are used at the mines or factory enclosure, no registration is required under Motor Vehicles Act, 1988 (the MV Act, for brevity) and, therefore, the impugned Act has no application to earth moving equipment which cannot be considered as motor vehicles. However the Assistant Commissioner, Karimnagar, acting upon the report dated 15.07.2009 of the Regional Vigilance and Enforcement Officer, Hyderabad, issued show cause notice dated 21.12.2009 proposing to levy tax under the impugned Act. The petitioner submitted objections on 29.12.2009. The Assistant Commissioner by assessment order dated 23.10.2010 confirmed the levy. Being aggrieved, the petitioner filed the writ petition. The petitioner would contend that the impugned Act is violative of Articles 301 and 304(a). It is further contended that the impugned Act is in pari materia with the Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 (hereafter A.P.Act No.39 of 2001), which has been declared unconstitutional by a Division Bench of this Court in M/s.Rayalaseema Alkalies and Allied Chemicals v State of Andhra Pradesh 46 APSTJ 1 : 13 VST 15. When there is no levy of entry tax on the movement of vehicles produced in Andhra Pradesh entering into local area from another local area within the State, levy of entry tax on the vehicles imported into the State of Andhra Pradesh is discriminatory and is not saved by Article 304(a). The State has no legislative competence to enact a law and it is only Parliament which can impose restrictions on the freedom of trade, commerce and intercourse in
