2001 (9) TMI 1117 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to reduction of tax liability u/s 4 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.
2. Entitlement to refund of excess entry tax paid u/s 11 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.

Summary:

Issue 1: Entitlement to Reduction of Tax Liability
The petitioner, a registered partnership firm and an authorized dealer for Hero Majestic Moped, Hero Puch Bike, API three-wheelers, and two-wheelers, contended that it paid entry tax amounting to Rs. 1,15,150 for the assessment year 1992-93. The firm was assessed by the second respondent, who raised a demand of Rs. 2,89,274 towards tax, Rs. 3,425 towards surcharge, and Rs. 3,616 towards additional surcharge. The petitioner argued that u/s 4(1) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, it is entitled to a reduction of its liability under the Tamil Nadu General Sales Tax Act, 1959, to the extent of the entry tax paid. The respondents countered that the entry tax paid was adjusted towards the tax due for the year 1992-93, and no further demand was raised. The court concluded that the petitioner is entitled to reduce its liability to the extent of the entry tax paid, as per the clear provisions of section 4 of the Act.

Issue 2: Entitlement to Refund of Excess Entry Tax Paid
The petitioner sought a refund of Rs. 16,635, arguing that after adjusting the sales tax due (Rs. 65,487), surcharge (Rs. 9,823), and additional sales tax (Rs. 20,203) totaling Rs. 95,515, it was entitled to a refund of the excess entry tax paid. The respondents contended that there is no provision for refund under the Entry Tax Act. However, the court referred to section 11 of the Act, which specifically provides for the refund of tax paid in excess. The court directed the second respondent to hold an enquiry regarding the sales tax payable by the petitioner and to refund the balance amount after adjustment. The writ petition was allowed with the direction to refund the excess entry tax paid after deducting the tax payable under the Tamil Nadu General Sales Tax Act.

Conclusion:
The court upheld the petitioner's entitlement to a reduction in tax liability and a refund of the excess entry tax paid, directing the second respondent to conduct an enquiry and refund the balance amount accordingly. The appeal by the respondents was dismissed.