Liability for entry tax under The Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990 is determined based on the value of accessories fitted to the vehicle, including components such as a tanker mounted on a chasis.

F.M. Ibrahim Kalifulla, J

An interesting question as regards the demand for payment of entry tax as contemplated in The Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990 has come up for consideration at the instance of the appellant, who sought for a clarification from the Special Commissioner and Commissioner of Commercial Tax, who, in his clarification letter dated 29.07.1994 clarified that the entry tax has to be paid on the full value of the new vehicle being registered, irrespective of the fact whether the chasis was purchased in Tamil Nadu or elsewhere and it has already suffered sales tax, hence, the appellant is liable to be assessed under the Act as a full vehicle since it is a new commodity, liable for new registration under the Motor Vehicles Act.

2. Shorn of unnecessary details, the required facts are that the appellant purchased a heavy vehicle chasis from M/s. Ashok Leyland Limited for which necessary tax under the provisions of Tamil Nadu General Sales Tax Act was levied and paid. The said chasis was sent by the appellant to Bombay for the purpose of mounting a special tank and after completing the body building, the chasis, along with the tanker, was brought back to Tamil Nadu for which the appellant stated to have paid entry tax on the value of tank built on the chasis. When the appellant wanted to get the vehicle, namely, the fire truck registered under the provisions of Tamil Nadu Motor Vehicles Act, the question arose as to whether the appellant was liable to pay entry tax as contemplated under the provisions of The Tamil Nadu Tax on Entry of Goods into Local Areas Act, 1990, hereinafter referred to as The Act, on the whole of the vehicle i.e., including the chasis, along with the body mounted on it. It was in the course of that process, when the registering authority insisted the appellant for payment of entry tax under the Act for the whole of the vehicle, the issue went before the third respondent. When the proceedings were pending before the third respondent, the appellant sought for a clarification from the second respondent, who in turn, clarified the position in his communication dated 29.07.1994 to the following effect:-

"The criterion for charging entry tax is whether there is liability for new registration in the local area of Tamil Nadu. If the is liability for new registration, then the entry tax has to be paid on the full value of the new vehicle being registered, irrespective of whether the chasis was purchased originally in Tamil Nadu or elsewhere. The entry tax is liable on the full vehicle (even if chasis was originally purchased in Tamil Nadu and suffered Tamil Nadu General Sales Tax and sent out for body building) since the fully built vehicle is a new commodity liable for new registration under the Motor Vehicles Act."

3. Subsequent to the clarification issued by the second respondent, the third respondent assessed the entry tax payable by the appellant under the Act by order dated 10. 1994 in a sum of Rs.4, 94,339/-and after giving credit to the entry tax already paid by the appellant, determined the tax liability in respect of the two vehicles in a sum of Rs.5, 93,496/-. Aggrieved by such assessment, the appellant has filed WP No. 18592 of 1994 and the learned Judge, having dismissed the writ petition, has come forward with the present writ appeal.

4. We heard Mr. R.L. Ramani, learned senior counsel appearing for the appellant and Mr. Haja Nazarudeen, learned Special Government Pleader for the respondents.

5. In his illuminating submission, the learned senior counsel for the appellant contended that the appellant has purchased the chasis in this State, which had already suffered sales tax under the provisions of the Tamil Nadu General Sales Tax Act, thereafter, took the vehicle to Bombay for mounting a tanker to be built on the chasis and after the tanker was mounted on the chasis and after paying necessary sales tax in the State of Bombay, brought back the tanker mounte