2007 (6) TMI 499 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order under Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.

Analysis:
The petitioner, a partnership firm providing earth-moving machinery services and civil works contractors, challenged the assessment order passed under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The petitioner, not registered under the Act, purchased an excavator mounted on iron plates made into chain links in 2000. The petitioner contended that the machinery did not qualify as a "motor vehicle" under the Motor Vehicles Act, 1988, and objected to the tax imposition. Despite submitting objections in 2001 and subsequent replies, the assessment order was issued in 2007 without considering the petitioner's contentions.

The petitioner's counsel relied on a Division Bench judgment, contending that the excavator machinery did not fall under the definition of "motor vehicle" for tax purposes. The court directed a physical examination of the machinery to determine its classification under the Motor Vehicles Act, 1988. The respondent was instructed to assess whether the machinery qualified as a "motor vehicle" based on the examination results. The court emphasized that the petitioner's objections were raised early on and should have been considered properly by the respondent.

In light of the Division Bench judgment and the failure to address the petitioner's objections adequately, the assessment order was set aside. The matter was remitted back to the respondent for proper examination and decision based on the Division Bench's criteria. The court disposed of the writ petition without costs, closing the connected miscellaneous petition as well. The judgment referred to a case reported as RDS Projects Ltd. v. Commercial Tax Officer [2007] 8 VST 574 (Mad).