2018 (8) TMI 1161 - HC - VAT and Sales Tax

Entry tax - import of Toyota Prado car from the Gulf in 1999 - demand of entry tax with interest - petitioner pleads financial hardship - Held that - In view of the persistent plea that the petitioner is only a driver the Government may let him pay the amount in a few instalments. Though the petitioner pleads that he needs at least 15 instalments this Court cannot use the discretion under Article 226 of the Constitution of India to interfere with the taxing power of the State or its recovery mechanism unless the Government s action violates any of the established legal principles of judicial review. So the petitioner must pay the entry tax along with interest in 10 equal monthly instalments commencing from 05.9.2018 - petition disposed off.

Summary

Issues involved:
Challenge to imposition of entry tax, financial hardship plea, payment of entry tax in instalments, judicial review of government action.

Challenge to imposition of entry tax:
The petitioner imported a 'Toyota Prado' car from the Gulf in 1999 and challenged the imposition of entry tax by the respondents. The matter went to the Supreme Court, where the petitioner's challenge failed. Subsequently, the Department demanded the petitioner to pay the entry tax along with interest.

Financial hardship plea:
The petitioner pleaded financial hardship in paying the entry tax and interest demanded by the Department. The petitioner sought relief due to financial constraints.

Payment of entry tax in instalments:
The Government Pleader submitted that the petitioner must pay the entire amount. However, considering the petitioner's persistent plea of being only a driver and the financial hardship plea, the Court directed that the petitioner could pay the entry tax in instalments. The petitioner requested 15 instalments, but the Court, citing Article 226 of the Constitution of India, directed the petitioner to pay in 10 equal monthly instalments starting from a specified date.

Judicial review of government action:
The Court emphasized that it cannot interfere with the State's taxing power or recovery mechanism unless the government's action violates established legal principles of judicial review. The Court directed the petitioner to pay the entry tax with interest in instalments, warning that failure to pay for two consecutive months would allow the respondents to proceed without reference to the judgment.

This writ petition was disposed of with the direction for the petitioner to pay the entry tax and interest in 10 equal monthly instalments, starting from a specified date. The Court, while acknowledging the petitioner's financial hardship plea, upheld the government's power to demand payment but allowed for instalment payments to ease the burden.