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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SURESH KUMAR, J.
C. Joseph Vijay & Others - Petitioners
Versus
Assistant Commissioner (ST) (FAC) K.K. Nagar Assessment Circle, Chennai & Others - Respondents
W.P. Nos. 1045 of 2022, 29130, 28430, 28435, 28436, 28438, 28441 of 2019, 5097, 5099 of 2021 & connected miscellaneous petitions
Decided On : 15-07-2022
ENTRY TAX - IMPORTED VEHICLES - LIABILITY TO PAY TAX - ASSESSMENT - LIMITATION - PENALTY - REVENUE RECOVERY ACT - WRIT PETITION - The liability of the importers to pay entry tax on the imported vehicle has already been held in unequivocal terms by this Court in V. Krishnamurthy’s case (cited supra) followed by number of decisions, the petitioners are liable to pay the entry tax as demanded by the Revenue.
Fact of the Case:
The petitioners, who had imported vehicles, challenged the notices issued by the Revenue demanding entry tax along with penalty, contending that there must be an assessment order before proceeding for any recovery or demand of tax and such kind of assessment has not been made in respect of the petitioners under the provisions of the Entry Tax Act as well as the rules made thereunder. Also insofar as making such an assessment since there was three years limitation prescribed, within which since no assessment has been made, it is barred by limitation, therefore assessment cannot be made now.
Finding of the Court:
The Court held that the petitioners are liable to pay entry tax on the imported vehicle as demanded by the Revenue. Insofar as the levy of penalty for non-payment of the tax as levied or imposed against the petitioners is concerned, such a penalty can be imposed on the petitioners only after 29.01.2019 but not before that date.
Issues: 1. Whether the petitioners are liable to pay entry tax on the imported vehicle? 2. Whether the assessment for entry tax is barred by limitation? 3. Whether penalty can be imposed on the petitioners for non-payment of entry tax?
Ratio Decidendi: 1. The liability of the importers to pay entry tax on the imported vehicle has already been held in unequivocal terms by this Court in V. Krishnamurthy’s case (cited supra) followed by number of decisions. 2. The limitation period for making the assessment can be excluded for the period during which the litigations were pending. 3. Penalty can be imposed on the petitioners for non-payment of entry tax only after 29.01.2019, the date of the Division Bench judgment in V. Krishnamurthy’s case.
Final Decision: The writ petitions were disposed of with the following directions: (i) The petitioners are liable to pay the entry tax as demanded by the Revenue. (ii) Penalty can be imposed on the petitioners only after 29.01.2019 but not before that date. (iii) The Revenue is directed to verify as to when the petitioners have paid the tax and if the tax in full paid as demanded by the Revenue on or before 29.01.2019, no penalty can be imposed on them. (iv) Instead if they paid only after 29.01.2019, penalty can be imposed on them, under Section 15 of the Act only from 29.01.2019 till the date of payment of the full tax. (v) Even still if any of the petitioners have not paid the full tax, it is open to the Revenue to recover the full tax as well as the penalty calculating from 29.01.2019 till the date of complete recovery of the tax.
JUDGMENT :
(Prayer: Writ petition filed under Article 226 of Constitution of India praying for issuance of a Writ of Certiorari, calling for the records on the files of the respondents herein in Rc.73/2021/A3, dated 17.09.2021 received on 22.09.2021 and consequential recovery notice in Rc.73/2021, dated 17.12.2021 and quash the same.
Writ petition filed under Article 226 of Constitution of India praying for issuance of a Writ of Certiorari, calling for the records on the files of the respondents pertaining to impugned Recovery Notice No. RC.768/2019/A3, dated 27.09.2019 passed by the first respondent and quash the same.
Prayer in W.P.No.28430, 28435, 28436, 28438 and 28441 of 2019 : Writ petitions filed under Article 226 of Constitution of India praying for issuance of a Writ of Certiorari, calling for the records of the second respondent in his proceedings in Rc.919/2019/A3 and quash the notice, dated 13.08.2019 passed therein.
W.P.No.5097 of 2021 : Writ petition filed under Article 226 of Constitution of India praying for issuance of a Writ of Certiorari, calling for the records of the second respondent in his proceedings in Rc.1419/2011/A3 and quash the demand notice dated 05.02.2021 issued therein.
W.P.No.5099 of 2021 : Writ petition filed under Article 226 of Constitution of India praying for issuance of a Writ of Certiorari, calling for the records of the second respondent in his proceedings in Rc.2559/2005/A3 and quash the notice dated 05.02.2021 issued therein.)
Since the issue raised in these writ petitions is one and the same, with the consent of the learned counsel appearing for the parties, all these writ petitions were heard together and are disposed of by this common order.
2. This batch of cases, insofar as the facts projected by the respective petitioners are concerned, are taken up in three separate categories. In the first two categories, two individuals filed the writ petitions and in the third category, a private limited hotel has filed some writ petitions.
3. W.P.No.1045 of 2022 :
3.1. This writ petition has been field by an individual who purchased a BMW Car by way of import in September 2005, as there was no authorised dealer in Chennai at that time.
3.2. At that time, already The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 (in short “The Entry Tax”) was in force which provides for payment of entry tax on the entry of motor vehicles into the State of Tamil Nadu for the use or sale therein. The petitioner’s imported vehicle when was produced before the Transport Authorities for registering the same, the Registering Authority orally insisted upon the payment of entry tax for the purpose of registering the imported vehicle.
3.3. This was triggered the petitioner to file a writ petition in W.P.No.38462 of 2005 for a direction to the registering authority to register the imported car without insisting upon payment of entry tax.
3.4. In the said writ petition, an interim direction was given in W.M.P.No.41180 of 2005, dated 29.11.2005, directing the registering authority to register the imported car without insisting upon the entry tax.
3.5. Thereafter, based on the legal position, as number of judgments had come in the line as to whether the imported vehicles like the petitioner is liable to be levied entry tax and some judgments passed by the Kerala High Court had gone for appeal to the Hon’ble Supreme Court and during the pendency of the same, judgments had come from this Courts, where two conflicting views had been taken by two different learned single Judges and ultimately the matter was referred to a Division Bench.
3.6. Those cases were pending for several years, i.e., up to 2019. While so, on 09.10.2017, the case arose from the Kerala High Court in the matter of State of Kerala v. Fr. William Fernandez, was decided on 09.10.2017 by the Hon’ble Supreme Court in (2017) SCC Online 1291, where the validity of the pari materia entry tax Act of the Kerala State was upheld and the liability to pay e
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