2004 (4) TMI 545 - HC - VAT and Sales Tax

Rejection of application u/s 55 of the Tamil Nadu General Sales Tax Act 1959 for rectification of assessment orders - refund of excess entry tax paid - HELD THAT - From the statutory provisions it is clear that in respect of a dealer who is dealing in motor vehicles if the dealer imports into notified area the motor vehicles either for use or for resale the dealer shall pay the tax on the entry of motor vehicles into local area at the rate as fixed by the Government on the purchase value of the motor vehicle. However section 4 provides for reduction of tax liability of the dealer to the extent of sales tax and additional sales tax liable to be paid by the dealer on the sale of such motor vehicles. Under this provision the sales tax and additional sales tax payable by a dealer in respect of a sale of a motor vehicle can be adjusted or set off can be given on the amount of entry tax paid under the provisions of the Entry Tax Act. On the face of this statutory provision I am of the view that if the dealer paid entry tax on the taxable event of entry of motor vehicle into the local area and there again liable to pay sales tax on the vehicle being sold the assessing officer after determining the tax liability under the Sales Tax Act shall adjust the said tax liability out of the tax paid by the dealer under the Entry Tax Act. As the tax paid under the 1990 Act is more than the tax determined under the TNGST Act the petitioner makes such a claim. If the tax payable under the Entry Tax Act is less than the tax payable on the sale of the motor vehicle can the dealer be claimed that he is not liable to pay sales tax over and above the entry tax by taking recourse to section 4. The answer is only an emphatic No . Section 11 provides for refund of entry tax collected over and above what the dealer is legally liable to pay. It is not the case of the petitioner herein that it has paid entry tax over and above the tax it is liable to pay. Hence section 11 is not applicable. As per the statutory provision the dealers like the petitioner are entitled to claim set off only in respect of the TNGST tax payable on the entry tax paid under the Entry Tax Act. If there are any differences between the tax payable under the Sales Tax Act and tax paid under Entry Tax Act the Government is entitled to retain the same with them as it is totally different tax. To put it differently the dealers are not entitled to get back the entire entry tax amount on the ground that they have paid the sales tax. The statutory position is clear as stated above. It is also equally settled and established principle of law that a decision is an authority for the ratio that has been raised argued considered and a decision rendered thereon. Hence I am of the view that the division Bench judgment relied on by the petitioner has not rendered me from taking a different view on the facts and circumstances of the present case which are totally different. The writ petitions were dismissed and the petitioner was not entitled to the relief sought. The court held that the petitioner could not claim a refund of the excess entry tax paid as the statutory provisions did not support such a claim. Consequently the connected W.P.M.Ps. were also dismissed.

Summary

Issues Involved:
1. Issuance of writ of certiorari for assessment years 1994-95, 1995-96, 1996-97, and 1997-98.
2. Rejection of application u/s 55 of the Tamil Nadu General Sales Tax Act, 1959 for rectification of assessment orders.
3. Entitlement to refund of excess entry tax paid.

Summary:

1. Issuance of Writ of Certiorari:
The petitioner filed writ petitions (W.P. Nos. 38111 to 38114 of 2003) seeking the issuance of a writ of certiorari to quash the assessment orders dated December 9, 2003, for the assessment years 1994-95 to 1997-98. The petitioner requested the first respondent to pass appropriate orders after hearing the petitioner and examining the documents.

2. Rejection of Application u/s 55 of TNGST Act:
The petitioner challenged the orders of the Assistant Commissioner (CT), Fast Track, Assessment Circle III, Chennai, rejecting the application filed u/s 55 of the TNGST Act, 1959, to rectify the respective assessment orders. The petitioner argued that there was a patent error in the assessment orders regarding the adjustment and refund of entry tax paid.

3. Entitlement to Refund of Excess Entry Tax:
The petitioner claimed that they paid entry tax exceeding the tax payable under the TNGST Act and sought a refund of the excess amount. The learned counsel for the petitioner relied on a division Bench judgment in W.A. No. 1228 of 1995 (State of Tamil Nadu v. Ganesh Automobiles), which directed the refund of excess differential tax amounts.

Court's Analysis and Decision:
- The court noted that the petitioner's request for rectification u/s 55 of the TNGST Act could not be considered as an error apparent on the face of the record. The court emphasized that an error apparent must be obvious and not something requiring a long-drawn process of reasoning.
- The court distinguished the taxes under the TNGST Act and the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, stating that they are different taxes with different taxable events.
- The court referred to sections 4 and 11 of the 1990 Act, which provide for reduction in tax liability and refund of excess tax, respectively. It concluded that the petitioner was not entitled to a refund of the entire entry tax amount merely because they paid sales tax.
- The court found that the division Bench judgment in Ganesh Automobiles was based on the specific admission of excess tax by the assessing officer, which was not applicable to the present case.
- The court reiterated that judicial decisions must be understood in the context of their specific facts and should not be applied blindly to different factual situations.

Conclusion:
The writ petitions were dismissed, and the petitioner was not entitled to the relief sought. The court held that the petitioner could not claim a refund of the excess entry tax paid, as the statutory provisions did not support such a claim. Consequently, the connected W.P.M.Ps. were also dismissed.