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2017 (1) TMI 523 - HC - VAT and Sales TaxLevy of entry tax - JCB Excavator - Held that - the aspect relating to, whether or not the subject vehicle would be chargeable to Entry Tax, has not been taken into account - the impugned order proceeds, on the basis that the JCB Excavator is a motor vehicle, as per provisions of Section 2(i) of the 1990 Act. The Division Bench of this Court in the case of RDS Projects Ltd. Vs Commercial Tax Officer, Chennai 2006 (11) TMI 559 - MADRAS HIGH COURT has held that the excavators in question having regard to its distinguishing features from the other excavators has to be held as not motor vehicle falling under the definition of the term defined under section 2(28) of the Motor Vehicles Act, 1988 and therefore, not liable for entry tax. The impugned order is quashed, with a direction to the Assessing Officer, to recommence the proceedings, if necessary, against the petitioner, only after a physical examination of the subject vehicle. If, upon a physical examination of the subject vehicle, the Assessing Officer comes to the conclusion that the subject vehicle is a JCB Excavator, which moves on chains and is not adapted for use on road, as contended before me, then, the Assessing Officer will proceed, in accordance with the ratio of the judgment rendered in the RDS case, and thereafter pass appropriate orders - appeal allowed by way of remand.
Issues:
Challenge to order for payment of entry tax and penalty on a JCB Excavator under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. Interpretation of Section 3 of the 1990 Act in relation to registration under the Motor Vehicles Act, 1988. Application of Section 2(28) of the 1998 Act to determine if the JCB Excavator is a motor vehicle. Consideration of a Division Bench Judgment in RDS Projects Ltd. Vs Commercial Tax Officer, Chennai. Assessment of whether the JCB Excavator is liable for entry tax based on physical examination. Analysis: The petitioner challenged an order requiring payment of entry tax and penalty of ?8,18,324 on a JCB Excavator, arguing that entry tax cannot be levied if the vehicle is not liable for registration under the Motor Vehicles Act, 1988. The petitioner relied on Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990, which specifies conditions for tax levy. The petitioner's counsel referred to Section 2(28) of the 1998 Act to assert that the JCB Excavator does not qualify as a motor vehicle under the Act, hence not subject to entry tax. The respondent acknowledged that vehicles like JCB Excavators may not fall under the purview of the 1990 Act as per a Division Bench Judgment. However, the respondent argued that a physical examination of the JCB Excavator is crucial to determine its classification. The respondent indicated that if the vehicle is indeed a JCB Excavator not suitable for road use, as claimed by the petitioner, it would align with the RDS case decision. The court noted that the impugned order did not consider whether the JCB Excavator was chargeable to entry tax, emphasizing the importance of this assessment. The order was based on the assumption that the JCB Excavator qualifies as a motor vehicle under the 1990 Act. Reference was made to the Supreme Court's judgment in Bose Abraham Vs State of Kerala and the Division Bench's observations in the RDS case regarding the definition of a motor vehicle. Consequently, the court quashed the impugned order and directed a physical examination of the JCB Excavator to determine its eligibility for entry tax. If the examination confirms that the JCB Excavator is not suitable for road use, the Assessing Officer should proceed in line with the RDS case judgment. The writ petition was closed with no costs awarded.
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