Dealers are entitled to adjust entry tax against sales tax liabilities or seek a refund for excess entry tax paid, particularly when sales are exempt.

ORDER :

1. These writ have been filed challenging the three impugned assessment orders in TIN/33101342565/2013-14, TIN/33010342565/ 2012-13 and TIN/33010342565/2011-12, all dated 17.02.2023, passed by the respondent.

2. Mr. Joseph Prabakar, learned counsel for the petitioner would submit that the present subject matter is pertaining to the entitlement of the petitioner either for adjustment of entry tax against the sale tax liabilities or for refund of said entry tax, which was paid at the time of importation of vehicles in the State of Tamil Nadu in terms of provisions of Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990, (hereinafter called as “the Act”).

3. Further, he would submit that in terms of Section 4 of the Act, the petitioners are entitled for reduction in tax liability to the extent of excess tax, which was already paid by them for entry of vehicle from other States to the State of Tamil Nadu. On the other hand, if the petitioner is not intend to adjust the entry tax against the sale tax liabilities, they are entitled for refund in terms of Section 11 of the Act.

4. He would also contend that in this case, the vehicles were sold to the Military Canteen Stores Department, in such case, the entry tax paid on such vehicles cannot be adjusted towards any other liabilities. Under these circumstances, the petitioner preferred for refund as provided under Section 11 of the Act. The total tax liabilities in the present subject matter are as follows:

5. By referring the above, he would submit that the petitioner is entitled either for reduction in tax liability to the extent of excess tax already paid for entry of vehicle under Section 4 of the Act or for refund of said amount under Section 11 of the Act. However, without considering the said aspect, the respondent had refused to entertain the request made by the petitioner for refund of entry tax.

6. Further, he would submit that the present issue has already been settled by the Hon'ble Full Bench of this Court vide the judgement rendered in Tamil Nadu vs. Ganesh Automobiles, (2004) 134 STC 272 (Mad), whereby it was held that the Assessees are entitled either for adjustment of entry tax against the sale tax liabilities as per Section 4 of the Act or for refund of entry tax paid by them as per Section 11 of the Act. Hence, he requests this Court to pass appropriate orders.

7. Per contra, Mr.Haja Nazirudeen, learned Additional Advocate General-I, appearing for the respondent would submit that in this case, the respondent had refused to grant refund by referring the provisions of Section 4(1) of the Act, wherein it has been stated that the entry tax liability of the vehicle, which was paid by the petitioner, shall be adjusted/reduced only at the time of sale of the vehicle. Hence, he would requests this Court to consider this aspect.

8. Heard the learned counsel for the petitioner and the learned Additional Advocate General-I for the respondent and also perused the materials available on record.

9. The only issue involved in this case is as to whether the petitioners/dealers are entitled to get any adjustment of entry tax, which was paid by them at the time of importation of vehicles from other States to the State of Tamil Nadu, against the sales tax liabilities, which has to be paid at the ti