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2011 (1) TMI 1299 - HC - VAT and Sales Tax
Issues:
Challenge to circular issued by Commissioner of Commercial Taxes regarding levy of entry tax on motor vehicles including excavators under the Entry Tax Act. Analysis: The petitioner, engaged in stone crushing business, purchased an excavator and received a show-cause notice proposing tax levy under the Entry Tax Act. The petitioner challenged a circular instructing levy of entry tax on motor vehicles, including excavators, issued by the Commissioner of Commercial Taxes. The petitioner contended that the Commissioner lacked jurisdiction to issue such instructions to quasi-judicial authorities. The petitioner also argued that the excavator did not fall under the definition of "motor vehicle" as per the Motor Vehicles Act. The Commissioner justified the circular as administrative, issued to inform subordinate authorities about the law laid down by the Supreme Court. The High Court analyzed the powers of the Commissioner in issuing instructions regarding tax levy. It noted that while the Commissioner can bring legal decisions to the notice of officials, he cannot issue binding instructions to assessing officers exercising quasi-judicial functions. Assessing officers must consider objections and circumstances of each case before levying tax on vehicles. The High Court held that the portion of the circular instructing officers to levy and collect entry tax was without jurisdiction and unenforceable. The High Court disposed of the writ petition, declaring the relevant portion of the circular as without jurisdiction. It directed the second respondent to follow the prescribed legal procedure and consider the petitioner's case on its merits. The judgment clarified that it did not exempt all excavators from tax under the Entry Tax Act, emphasizing the need for individual assessment based on specific circumstances. The petitioner's challenge to the circular was partially successful, leading to a directive for a fair consideration of their case without imposing costs.
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