2022 (2) TMI 3 - HC - VAT and Sales Tax

Levy of Entry Tax - Motive of the appellant behind litigation - whether the Entry Tax was compensatory in nature and thus, outside the purview of Part-XIII of the Constitution? - HELD THAT - The order of the learned single Judge, wherein, certain disparaging remarks were made, appears to be wholly unwarranted, as there was uncertainty as to the state of law relating to Entry Tax and divergent views were expressed not only by the High Courts, but by the Supreme Court as well. Thus, to impute motives to a litigant or castigating him for taking a particular legal position or exercising his constitutional right under Article 226 is unwarranted. Inherent power and jurisdiction of this Court to expunge the alleged adverse remarks made by the Single Judge - HELD THAT - It is difficult to suggest that the petitioner had acted with malafide and with deliberate intention and thus, the observation made by the learned single Judge, apart from being unwarranted, are irrelevant to decide the issue. The order of the writ Court also overlooks the fact that the view/stand taken by the petitioner, insofar as the leviability of entry tax on imported vehicles is the view taken by the Division Bench of Kerala High Court and also the Judgment of the Madras High Court and the matter was finally resolved by a Division Bench of the Hon'ble Supreme Court, after the Constitutional Bench of Nine Judges pronounced on the scope of Part XIII of the Constitution. The above sequence of litigation will clearly demonstrate that the appellant cannot be imputed with motive whatsoever and therefore, the disparaging remarks are clearly unwarranted. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Expunging of objectionable remarks.
2. Payment and constitutionality of entry tax.
3. Judicial restraint and propriety in making adverse remarks.

Issue-wise Detailed Analysis:

1. Expunging of Objectionable Remarks:
The appellant sought to expunge certain adverse remarks made by the learned Single Judge in the order of the Writ Court in W.P.No.18385 of 2012, dated 08.07.2021. The appellant argued that these remarks were unnecessary for the disposal of the writ petition, made in breach of principles of natural justice, and could affect his future career. The appellant had already paid the entry tax demanded. The court noted that the adverse remarks were unwarranted given the legal uncertainty surrounding entry tax and the divergent views expressed by various High Courts and the Supreme Court.

2. Payment and Constitutionality of Entry Tax:
The appellant was required by transport authorities to pay entry tax before registering an imported car, which led to the filing of a Writ of Mandamus. The court delved into the history of litigation regarding entry tax, highlighting key judgments, including the Constitutional Bench decision in Jindal Stainless Limited and Another Vs. State of Haryana (2017) 12 SCC 1. This decision resolved the issue of whether entry tax was compensatory in nature and outside the purview of Part XIII of the Constitution. The court referenced multiple cases and judgments to illustrate the evolving legal landscape and the eventual resolution by the Supreme Court, which upheld the state's right to levy entry tax on imported goods.

3. Judicial Restraint and Propriety in Making Adverse Remarks:
The court emphasized the importance of judicial restraint and propriety, citing several Supreme Court judgments. It noted that adverse remarks should only be made if necessary for the decision of the case and should be based on evidence, with the affected party given an opportunity to defend themselves. The court referenced the principles laid down in Testa Setalvad Vs. State of Gujarat (2004) 10 SCC 88 and Dr. Dilip Kumar Deka Vs. State of Assam (1996) 6 SCC 234, which stress the need for judicial pronouncements to be sober, moderate, and reserved. The court found that the disparaging remarks made by the learned Single Judge were unwarranted, irrelevant, and made without giving the appellant an opportunity to defend himself.

Conclusion:
The Writ Appeal was allowed, and the observations made by the learned Single Judge in paragraphs 3, 4, 7, 8, 11, and 12 of the impugned order were expunged. The court reiterated the importance of judicial restraint and the need for remarks to be necessary, evidence-based, and made with due regard to the principles of natural justice. The connected miscellaneous petition was also closed.