2015 (4) TMI 820 - HC - VAT and Sales Tax

Levy of tax with retrospective effect - Held that - petitioner that the petitioner company started its factory at Anjar in the year 2004 and even obtained the sales tax registration in the year 2004 and therefore, they are not liable to pay the tax for the period prior to 2004. However, for the aforesaid, the petitioner is required to place relevant material before the appropriate Authority and the appropriate Authority is required to be satisfied with respect to the date on which the petitioner actually brought the aforesaid vehicles into the State of Gujarat and thereafter, after holding necessary inquiry, from the date on which the petitioner brought the vehicles into the State of Gujarat, the liability to pay the tax from that day is required to be determined and the petitioner is liable to pay the tax from that date - Decided conditionally in favour of assessee.

Summary

Issues:
1. Dispute over classification of vehicles as motor vehicles under Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989.
2. Recovery of tax retrospectively from 01.04.1995.
3. Differentiation of forklifts and crawler cranes for tax liability.

Analysis:

Issue 1: Classification of Vehicles
The petitioner sought to challenge the action of the respondent for recovery of tax on the basis that the crawler cranes and other equipment are not motor vehicles as defined under the Motor Vehicles Act, 1988 or construction equipment vehicles as defined under the Central Motor Vehicles Rules, 1989. The Division Bench had previously classified forklifts as motor vehicles in a prior judgment. The petitioner was allowed to present necessary material for the crawler cranes to be categorized accordingly.

Issue 2: Recovery of Tax Retrospectively
The petitioner argued against the retrospective levy of tax from 01.04.1995, stating that their liability should start from the date they brought the vehicles into the State of Gujarat. The Court emphasized that factual aspects regarding the date of bringing in the vehicles should be presented before the appropriate authority. The petitioner was given four weeks to provide relevant material for determining the tax liability from the actual date of entry into Gujarat.

Issue 3: Tax Liability Differentiation
The Court dismissed the petition regarding forklifts as motor vehicles, directing the petitioner to submit material for tax liability determination within four weeks. For vehicles classified as crawler cranes, falling under category 'C' as per the previous judgment, the RTO Authority was instructed to make a decision after inspection and consideration of necessary material. The petitioner and the authority were given three months to complete the process.

The judgment concluded by disposing of the special civil application, outlining the specific actions and timelines for both categories of vehicles to determine tax liability and classification.