2018 (2) TMI 121 - HC - VAT and Sales Tax

Motor Vehicle or not? - Tata Hitachi Model EX 200 LC Hydraulic Excavator with HD Bucket and kit loaded on Truck No.HR 38 F 1131 - Petitioner has contended that Tata Hitachi Model EX 200 LC Hydraulic Excavator is not a motor vehicle as defined in Clause 28 of Section 2 of the Motor vehicles Act, 1988 and therefore, cannot be brought under tax net - whether Tata Hitachi Model EX 200 LC Hydraulic Excavator is a motor vehicle, falling within Section 2 (i) of the Motor Vehicles Act, 1988 and whether tax has to be paid? Held that - In RDS Projects Ltd., Vs. Commercial Tax Officer, Chennai, 2006 (11) TMI 559 - MADRAS HIGH COURT , a Hon ble Division Bench of this Court, directed physical inspection of the machines and file a report. After considering the report, the Hon ble Division Bench of this Court framed a question, as to whether the excavator not running of tyres but on iron chain plates such as, the caterpillars and military tanks and others, would fall within the definition of Section 2 (i) of the Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990 read with Section 2 (28) of the Motor Vehicles Act, 1988, and whether, liable to pay tax under Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles Rules, 1990 - it was held in the case that 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. Petition allowed.

Summary

Issues:
1. Whether Tata Hitachi Model EX 200 LC Hydraulic Excavator is considered a motor vehicle under the Motor Vehicles Act, 1988 and liable for tax.
2. Whether the authority detaining the vehicle had the legal power to demand entry tax.

Analysis:

Issue 1: The petitioner sought to challenge the detention of Tata Hitachi Model EX 200 LC Hydraulic Excavator, arguing it does not fall under the definition of a motor vehicle as per the Motor Vehicles Act, 1988. The Court referred to a previous judgment where it was established that vehicles not adapted for road use are not liable for entry tax. The Court emphasized that the excavator in question, mounted on iron plates like caterpillar vehicles, is not suitable for public roads and is solely used on work sites, thus not meeting the criteria of a motor vehicle. The Court relied on previous decisions and physical verification to support this conclusion, setting aside the show cause notice and ruling in favor of the petitioner.

Issue 2: The petitioner also contested the authority of the Special Assistant Commercial Tax Officer to demand entry tax, arguing that officers below the rank of Deputy Commercial Tax Officer lack the power to act as assessing officers under the Entry Tax Act. The Court found the detention order to be illegal as it lacked support from relevant provisions of law. The Court directed the immediate release of the detained goods and vehicles, cautioning against unauthorized actions by authorities and emphasizing the need for legal sanction in all proceedings.

In conclusion, the High Court of Madras ruled in favor of the petitioner, quashing the detention order and directing the release of the excavator and associated goods. The judgment highlighted the importance of adhering to legal provisions and ensuring that actions taken by authorities are supported by law to prevent unwarranted harassment of the public.