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TMI Blog1993 (12) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... t the chasis registered in the State of Daman being DMR-2186-F and certificate of registration was issued by the Registering Authority, Daman on 17-6-1991. The petitioner thereafter brought the said vehicle in the State of Rajasthan and it was registered by the Registering Authority, Jodhpur on 9-9-1991 and registration number was allotted as RJ-19/G-1415. The petitioner is using aforesaid vehicle as a taxi and necessary permits were taken by the petitioner. By a show cause notice dated 25-2-1992 the petitioner was called upon by the respondent No. 2 to appear for determination of tax liability of the entry tax under the provisions of the Act of 1988. Therefore, in this view of the matter, the petitioner challenges the validity of the aforesaid Act and specially the provisions of Sections 2, 3 and 6 of the Act on the ground that the same are violative of Articles 14, 19, 265, 300A, 301 and 304 of the Constitution of India. It is submitted that the main object/ intention of the Act is to prevent diversion of trade to the States with lower rates of Sales Tax on the vehicle in several other States. It is alleged that this is nothing but a tax on purchase of vehicles and it is an addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Entry No. 52 of the Second List of the Seventh Schedule of the Constitution of India. It is alleged in the reply that the main object of the Act is that some States and Union Territories have reduced the rates of Sale Tax on motor vehicles and chasis substantially. Such reduction in tax rates by the neighbouring States has resulted in diversion of trade to those areas and consequent loss of legitimate Sales Tax revenue to the State of Rajasthan. It is alleged that with a view to compensate such loss of legitimate revenue the State Government has decided to levy a tax entry of such motor vehicles which are purchased from outside the State of Rajasthan and brought in the State of Rajasthan for use or sale therein and are liable to be registered under the Motor Vehicles Act. However, no tax has been levied on such motor vehicles which are registered in any other State or Union Territory for a period of fifteen months or more before the date on which they are liable to be registered in this State. It is further submitted that the tax liability has been reduced to the extent of the amount already paid under the General Sales Tax of that State of Union Territory on the vehicles brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 10. Section 2(c) defines 'importer' which reads as under:-- 2(c) importer means a person who, in any capacity brings or causes to be brought a motor vehicle into a local area from any place outside the State but not being a place outside the territory of the Union of India for use or sale therein. 11. Section 2(d) defines 'local area', which reads as under:-- 2(d) Local area means the area within the limits of (i) a panchayat established under the Rajasthan Panchayat Act, 1953 (Act No. 21 of 1953); or (ii) a municipality established under the Rajasthan Municipalities Act, 1959 (Act No. 38 of 1959); or (iii) a notified area committee or a cantonment board constituted or established under any law for the time being in force . 12. Section 2(e) defines the 'motor vehicle', which reads as under:-- 2(e) -- Motor Vehicle means a motor vehicle as defined in Clause (18) of Section 2 of the Motor Vehicles Act, 1939 and includes motor cars, motor taxi cabs, motor cycles, motor cycle combinations, motor scooters, motorettes, motor omnibuses, motor minibuses, motor vans, motor lorries, trailers and chassis of motor vehicles and bodie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commercial Taxes Officer of the area where he ordinarily resides or carries on any business or provides any service, and the provisions of the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954) as applicable to a registered dealer or casual trader shall, mutatis mutandis, apply to such dealer or, as the case may be, such person. (3) The tax shall be in addition to the tax levied and collected as Octroi by any local authority within its loal area. 15. Section 4 deals with the reduction in tax liability which reads as under:-- 4. Reduction in tax liability-- (1) Where an importer an importer of a motor vehicle liable to pay tax under this Act, being a dealer in motor vehicles, becomes liable to pay tax under the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954) by virtue of the sale of such motor vehicle, then his liability under the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954) shall be reduced to the extend of tax paid under this Act. (2) The amount of tax leviable under this Act shall subject to such conditions as may be prescribed, be reduced to the extent of the amount of the tax paid, if any, under the law relating to General Sales Tax as may be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted in respect of the motor vehicle which are registered in Union Territory or ther State or any other State under the Motor Vehicles Act, 1939 for a period of 15 months or more before the date on which it is liable to be registered in the State under the said Act. Section 2 says that the tax should be payable by an importer and the importer is a person who in any capacity brings or causes to be brought the motor vehicle in the local area from the place outside the State but not the place outside the territory of Union of India for use or sale therein. Section4 gives a rebate to the extent of the Sales Tax paid in that vehicle in the other State or Union Territory by importer who has paid that tax. The procedure for assessment of the taxing liability is same as is done under the Rajasthan Sales Tax Act and all the provisions of the Rajasthan Sales Tax has been adopted for assessment and collection of the tax under this Act. The method of assessment, appeal and other provisions shall apply to this Act also. 17. Now in this light we have to construe that whether the present tax is covered by the Entry 52 of the Second List of the Seventh Schedule of the Constitution of India or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are collecting agent under the Municipality of Panchayat Act, it does not follow that State Legislature cannot enact law and empower State to collect tax on motor vehicle entering into local areas. 18. Likewise, the amount so collected and placed at the disposal of local authority is also not decisive of the matter. Therefore, to interprate this entry for this limited purpose is not correct. The test is that whether the State Legislature is competent to levy the tax on the goods brought within local area or not. In the present case, the motor vehicles are brought within the local area of the Panchayat or it is brought into the local area of Municipality or the cantonment, such vehicle shall be subjected to incident of taxation under this Act. The State of Rajasthan is divided in into local areas i.e. the Panchayats, Municipalities or cantonment, therefore, if it is brought within the limits of the Panchayat or Municipality or the cantonment then such vehicle shall be subjected to the incidence of tax and for which the State is competent under Entry 52. Article 304 of the Constitution of India says that a reasonable restriction on trade, commerce can be made notwithstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gitimate method. But in the present case instead of increasing the incident of taxation under the Sales Tax, State have resorted the tax as a entry tax on the motor vehicle in the local area under Entry 52 of the Second List of Seventh Schedule of the Constitution then it cannot be said to be a extra territorial tax or a colourable exercise of the power. The purpose is well known as it is evident in the statement of objects as quoted above. Therefore, there is no subterfuge employed by State. The State has made the fact known that the levy is being made in public interest to compensate the loss of the tax on account of lowering of the Sales Tax in the other States and Union Territories. This step has been taken by the State in the public interest and such act cannot be said to be subterfuge method adopted by the State Government. It is true that the provisions of the Sales Tax Act has been made applicable for the limited purpose of assessing the taxing liability but it cannot be said to be an additional Sales Tax. 19. Learned counsel for the petitioner has invited our attention to the decision of the Hon'ble Supreme Court given in the case of State of Karnataka v. Hansa Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te is competent to levy the tax on the motor vehicles on its entry in the local areas. Similarly question was also examined by the Andhra Pradesh High Court in the case of Suresh Chand Sri Gopal v. The Union of India, 1989 (72) STC 24 1 and it was held that the State Legislature is competent under Entry 52 of the State List of the Seventh Schedule to levy this tax. It was held as under:-- that the taxes contemplated by Entry 52 of the List II of the Seventh Schedule to the Constitution referred to, and included, what was known as octroi, the basic feature of this tax was that it was levied on goods entering a local area for the purpose of consumption, use of sale therein. Article 246 of the Constitution empowered the State Legislatures to levy this tax. There were no words in the entry, or anywhere else in the Constitution saying that this tax could be levied only by a local authority. It was of course open to a State Legislature either to levy this tax by itself or to empower the local authorities to levy this tax. 21. Our attention was also drawn to a decision of the Bombay High Court given in the case of Jaika Automobiles Pvt. Ltd. Nagpur v. State of Maharashtra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Ores Ltd. v. State of Orissa, AIR 1975 SC 17: (1975 Tax LR 1208). In this case, the question was whether the dumpers, rockers and tractors are 'motor vehicles' and taxable under the Act or not with reference to Section 2(18) of the Motor Vehicles Act, 1939. Their Lordships of the Supreme Court held as under: Thus the dumpers and rockers though registrable under the Motor Vehicles Act are not taxable under the Bihar Taxation Act as long as they are working solely within the premises of the respective owners. So far as the tractors are concerned they are neither registrable under the Motor Vehicles Act nor taxable under the Taxation Act. 25. This case came up for consideration again before the Hon'ble Supreme Court and the Hon'ble Surpeme Court in the case of Central Coal Fields Ltd. v. State of Orissa, AIR 1992 SC 1371 :(1992 AIR SCW 1366 ) after considering the case of Bolani Ores Ltd., (supra) held that dumpers and rockers are motor vehicles. It was observed as under at Page 1375; of AIR:-- It would be appropriate now to mention that some documentary material was sent to us by the appellants by means of an affidavit after we had reserved judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation. Similarly, in the case of Union of India v. Chowgule Co. Pvt. Ltd., AIR 1992 SC 1376 : (1992 AIR SCW 1373) the same position was reiterated. 27. Mr. Rajendra Mehta, learned counsel for the respondents has also submitted that the dumpers which have been purchased by the petitioner from Tamil Nadu, no Tamil Nadu Sales Tax has been paid as the same has been purchased against the prescribed 'C' Form under the Central Sales Tax Act, therefore, they arc not liable to tax. The Contention of the learned counsel is without any merit. It has been pointed out in the reply that under the Central Sales Tax Act registration certificate was issued to the petitioner on 17-3-1988 under the heading machinery, equipment an allied spheres does not include dumpers as a machinery. We don't wish to make any observation regarding this certificate because it is a matter to be decided by the assessing authority, but suffice it to say that simply because they have been purchased on the strength of C From, that will not make any difference for the simple reason that whoever is the importer of the vehicle in Rajasthan local area shall have to pay the tax on enty on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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