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TMI Blog2019 (1) TMI 1714X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 of 2007, 1785, 1981, 1982, 4238, 8737, 11146, 11924, 11925, 12137, 12138, 12715, 14633, 15296, 15297, 15682, 15747, 16160 and 16164 of 2008, 5847 of 2010, 10126 of 2011, 16973 and 29772 of 2012, 17843 of 2014 and W. A. Nos. 2192 of 2001, 1600 and 1615 of 2006. For the Petitioner : Satish Parasaran and R. L. Ramani , Senior Counsel, M. Vinayagamurthy , G. Ramadurai , S. Vishnu Mohan , M. Sriram , B. Raveendran , C. Kathiravan , S. A. Rajan , Jacob George , S. Rajasekar , Ms. Rajalakshmi , A. Babu , K. Hariharan , R. Natesan , A. S. Chandrasekaran , A. Ganesan , R. Vivekanandan , Ms. A. Ayesha Parveen , K. Govi Ganesan , R. Parthasarathy , B. Sathish Sundar , T. V. Lakshmanan , M. Md. Ibrahim Ali , Arul Murugan , K. S. Srinivas Rao , T. V. Badrinarayanan , P. Anbarasan , A. S. Baalaji , N. Gopalakrishnan , K. Muruganandam , B. Raviraja , P. Rajkumar , S. P. Meenakshisundaram , J. Naresh Kumar , S. Ramesh Kumar , A. M. Packianathan Easter , P. Sesadhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for registration in the State under the Motor Vehicles Act, 1988. 6. Mr. T. V. Lakshmanan, learned counsel appearing for the petitioner would submit that the legislation is only to prevent evasion of sales tax in the State of Tamil Nadu by purchasing vehicles from neighbouring State and not against imported vehicles, which are not liable to sales tax. Further, it is submitted that a plain reading of the provisions of the Act will clearly show that the Act does not purport to levy entry tax on imported motor vehicles as it is aimed only at the goods brought in from other States within the territory of India. 7. Further, it is contended that the provisions of the Act have to be interpreted in the light of the statements of objects and reasons appended to the bill and if it is done so, it is clear that the enactment does not intend to levy entry tax on imported vehicles. In other words, it is submitted that the Tamil Nadu Act intended to prevent evasion of tax and not for the purpose of augmenting revenue and therefore, the enactment cannot be made applicable to levy entry tax on imported vehicles. 8. The learned counsel referred to section 3 of the Tamil Nadu Act which deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that they can bear only one meaning, duty is to give effect to that meaning. 13. Further, the learned counsel relied on the observations made in the said book to the effect that plain meaning rule applies at the stage when the words have been construed in their context and the conclusion is reached that they are susceptible to only one meaning and in that event, the meaning so derived is to be given effect to irrespective of consequences for no alternative construction is really open. Therefore, it is the submission of Mr.T. V. Lakshmanan that the plain reading itself requires a contextual reading. 14. Reliance was placed on the decision of honourable Supreme Court in the case of Controller of Estate Duty, Gujarat v. Shri Kantilal Trikamlal reported in [1976] 4 SCC 643. This decision was relied on to support his argument that the same word when it occurs in different statute would have a different meaning. In the said decision, the word which was the subject-matter of interpretation was of "disposition" as to its meaning under the provisions therein under the provisions of the Gift tax Act, 1958 and under the provisions of the Estate Duty Act, 1953. 15. In this regard, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the beneficiary. The substantive definition of 'property' in section 2(15) is not exhaustive but only inclusive and the supplementary operation of Explanation 2 takes in what is not conventionally regarded as 'disposition'. Indeed, 'disposition', even according to law dictionaries, embraces 'the parting with, alienation of, or giving up property . . . a destruction of property' (Black's Legal Dictionary). The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener, can be called 'disposition' in law. Undoubtedly this operation, to use a neutral expression, is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains. This legal result, produced by voluntary action, is 'disposition' within the scope of Explanation 2 to section 2(15). 21. The assessee's contention, effectively presented by counsel, takes a legalistic course, ignoring the purpose, language and amplitude of Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his interest by one joint tenant in favour of another.' (Green's Death Duties, Seventh Edition, Butterworths, page 149) 22. Shri Desai and also Shri Kazi, appearing for the 'accounting persons' in the respective cases, urged that this expansive interpreta tion taking liberties with traditional jural concepts is contrary to this court's pronouncement in Commissioner of Gift-tax v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC). That was a case under the Gift Tax Act, 1958 and the construction of section 2(xxiv) fell for decision. Certainly, many of the observations there, read dehors the particular statute, might reinforce the assessee's stand. This court interpreted the expression 'transfer of property' in section 2(xxiv) and held that the expression 'disposition' used in that provision should be read in the Commissioner of Gift-tax v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC). context and setting of the given statute. The very fact that 'dis position' is treated as a mode of transfer takes the legal concept along a different street, if one may use such a phrase, from the one along which that word in the Estate Duty Act is travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the Legislature and the intention of the statute from the language used. Further, by relying on the observations made in the said decision, it is submitted that in a taxing statute where literal interpretation leads to a result not intended to sub- serve the object of the legislation another construction in consonance with the object should be adopted. Therefore, it is his submission that literal interpretation has to be eschewed. The object of the enactment has to be seen and the object being one for prevention of evasion of tax and not for augmentation of revenue, the same cannot be applicable for levy of entry tax on imported motor vehicles. 19. The learned counsel referred to the decision of Nine-Judges Bench of the honourable Supreme Court in the case of Jindal Stainless Ltd. v. State of Haryana reported in [2018] 5 GSTR-OL 164 (SC) ; [2017] 12 SCC 1 and referred to paragraph 77 of the judgment of honourable Dr. T. S. Thakur, Chief Justice of India, wherein it was held that an interpretation which is both textual and contextual has always been found to be more acceptable and this is so because it is only when both the text and context are kept in view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not arise and even if it is done so, the object of enactment is clear and that the levy of entry tax is legally valid. 22. The learned Special Government Pleader referred to the decision of the honourable Supreme Court in the case of Commissioner of Income-tax v. N. C. Budharaja & Company [1993] 91 STC 450 (SC) ; [1993] 204 ITR 412 (SC) ; [1994] Supp (1) SCC 280, wherein, it has been held that it would not be reasonable or permissible for the court to rewrite the section or substitute words of its own for the actual words employed by the Legislature in the name of giving effect to the supposed underlying object. 23. Reliance was placed on the decision in the case of Gurudevdatta VKSSS Maryadit v. State of Maharashtra [2001] 4 SCC 534 and the decision in the case of Mathuram Agrawal v. State of Madhya Pradesh [1999] 8 SCC 667 in support of the said arguments. Thus, it is the submission of the learned Special Government Pleader that the charging section is clear as held by the honourable Supreme Court in the case of Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; and the preamble of the Act is also clear and prayed that the levy of entry tax on imported vehicles be sustained. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essions, means entry of motor vehicle into a local area from any place outside the State for use or sale therein. The definition is a clear indicator to show that the charging section of the Act namely section 3 would apply at the stage when the vehicle enters into a local area. In other words, the taxable event is the entry of the vehicle in a local area and not purchasing in other State or Union Territory. This view is supported by the decision of the honourable Supreme Court in the case of Bhagatram Rajeev Kumar v. Commissioner of Sales Tax, Madhya Pradesh reported in [1995] 96 STC 654 (SC). The Commissioner of Commercial Taxes had issued a Circular No. 9, dated February 9, 1996 to the effect that import of vehicles from outside also amounts to an entry into local area. 31. Section 2(g) defines "importer" to mean a person who brings a motor vehicle into a local area from any place outside the State for use or sale therein ; and who owns the vehicle at the time of its entry into the local area. Section 2(h) defines "local area" to mean within the limits of the city of Madras as defined in the Madras City Municipal Corporation Act, 1919 and likewise other States and towns in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) gives a benefit in respect of motor vehicles which was registered in any Union Territory or any other State under the Law relating to motor vehicle and under the said category two classes of vehicles have been considered that is those registered prior to September 10, 1996, or registered after September 10, 1996. It is further interesting to note that in respect of the tax payable by the importer, there is no such distinction drawn in the statute and the window which has been given under the proviso is restricted to the vehicles which was registered in Union Territory or other State either before September 10, 1996 or after September 10, 1996. 35. Section 4 of the Act deals with "reduction in tax liability". Sub-section (1) of section 4 states that where an importer of a motor vehicle liable to pay tax under the Act is a dealer in motor vehicles, becomes liable to pay tax under the Tamil Nadu General Sales tax Act and additional sales tax under the Tamil Nadu Additional General Sales tax Act by virtue of the sale of such motor vehicle, then his liability under those Acts shall be reduced to the extent of entry tax paid by him. Sub-section (2) deals with cases where an importer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been enacted to curb evasion and it is not for augmentation of revenue and the scheme of the Act is entirely different from that of the 1994 Act. 42. If we agree with the submissions of the learned Special Government Pleader that both enactments are in pari materia, the Statements of Object and Reasons are identical, then we will have to apply the decision of the honourable Supreme Court in Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; . If that is done, all other contentions raised by the petitioner stands foreclosed and the curtain will have to be drawn. In the event, we do not agree with the submissions of the learned Special Government Pleader, we may be required to examine the contentions advanced by the learned counsel for the petitioners, how the terms occurring in section 3 and section 4 to be interpreted ; What is the contextual reading that has to be done ; to examine whether section 4 to be read into the charging section namely section 3 and if that is done so, it is undoubtedly an enactment for a different purpose than what was enacted by the Kerala State. Therefore, first we take up for consideration as regards the argument relating to pari materia between the two st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motor Vehicles Act, 1988. 46. Thus, we are satisfied that the object of enacting the statute by respective Legislative Assemblies of both the States are identical. The argument of the petitioners is that the scheme and spirit of the Act needs to be understood first, for every social legislation has a personality and taxing statute a fiscal philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained. 47. It is the further submission of the learned counsel for the petitioners that in a taxing statute one has to look merely at what is clearly stated and there is no room for intendment and a contextual reading is required to be given because a common word appearing in two different statutes will not have the same meaning. In this regard, reliance was placed on the decision in the case of Controller of Estate Duty, Gujarat v. Shri Kantilal Trikamlal reported in [1976] 4 SCC 643 as well as in the case of Oxford University Press [2001] 247 ITR 658 (SC) ; [2001] 3 SCC 359. The question would be as to what extent we have to rely upon the objects and reasons of an enactment to understand the real intent of the enactment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of this Act, tax shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein (inserted by Act 10 of 2005). The tax on such goods shall be at such rate or rates as may be fixed by the Government by notification, on the purchase value of goods not exceeding the tax payable for the goods as per the (substituted by Act 23 of 1996 with effect from July 29, 1996) Schedule to the Kerala General Sales tax Act, 1963 or the Kerala Value Added tax Act, 2003: Provided that no tax shall be levied and collected in respect of any motor vehicle which was registered in any Union Territory or any other State under the provisions of Motor Vehicles Act, 1988 (Central Act 59 of 1988), prior to a period of fifteen months or more from the date on which it is registered in the State : Provided further that no tax shall be levied and collected in respect of any (substituted by Act 23 of 1996 with effect from July 29, 1996) goods which is the property of the Central Government or which is used exclusively for purposes relating to the defence of India. (2) The tax shall be payable by the importer in such manner and within such ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the decision of the honourable Supreme Court in the case of Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; and test its applicability to the cases on hand. 56. We are required to undertake this exercise on account of the argument advanced by the learned counsels for the petitioner that the honourable Supreme Court in Fr.William Fernandez [2018] 57 GSTR 6 (SC) ; dealt only with entry tax legislation of the States of Orissa, Bihar, Kerala and Jharkand. We have noted above that the Statement of Objects and Reasons of the Kerala and Tamil Nadu Act are in pari materia as well as the charging section, viz., section 3 and the definition of local area in both enactments. 57. Bearing in mind this similarity, we now go to the decision in Fr. William Fernandez [2018] 57 GSTR 6 (SC). One of the questions which was framed for consideration by the Supreme Court was whether section 2(d) read with section 3 of the Orissa Entry tax Act, 1999, section 2(d) read with section 3 of the Kerala Act and Bihar Act, 1993 (before its amendment in 2003), never intended to levy any entry tax on the goods, entering into local area of the State from any place outside the territory of India. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to charge ability of entry tax. In this context reference is made to judgment of Federal Court reported in Miss Kishori Shetty v. King ; AIR 1950 FC 69 (1950 RLW 46). . ." 60. The honourable Supreme Court then proceeded to consider the argument with regard to how the statute requires to be, in other words more or less identical to that which was advanced before us by Mr. T. V. Lakshmanan was considered by the Supreme Court and the same was answered against the assessee on the following terms (pages 40 and 41 in 57 GSTR) : "61. To the same effect judgment of this court in State of Bombay v. F. N. Balsara, AIR 1951 SC 318 is referred. The submission which has been pressed by the learned counsel for the writ petitioners is that in a taxing statute one has to merely look into the text and there is no room for any intendment in deciding liability of the subject to tax regard must be had to plain and strict letter of law. Reliance has been placed on the judgment Commissioner of Income-tax v. Vatika Town ship P. Ltd. [2014] 367 ITR 466 (SC) ; [2015] 1 SCC 1. In paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision which is rele vant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the Legislature. The statute should clearly and unambiguously convey the three components of the tax law, i.e., the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the Legislature to do the needful in the matter.'." 61. The legal principles which flow from the observations contained in the above paragraphs is that the well established principle of statutory interpretation, to help finding out as to whether particular category of assessee is to pay particular tax or not. The court makes endeavour to find out the intention of the Legislature. At the same time, the very principle is based on "fairness" doctrine as it lays down that if it is not very clear from the provisions of the Act as to whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation cannot be done, as by process of interpretation, the provision cannot be re-written nor any word can be introduced. Further, it was held that the expression "any place" before the words "outside the State" is also indicative of wide extent. The words "any place" cannot be limited to a place within the territory of India when no such indication is discernible from the provisions of the Act. Further, it was pointed out that the origin of goods has no relevance with regard to chargeability of entry tax. 66. In this context, the decision of the Federal Court in Miss Kishori Shetty v. The King, AIR 1950 FC 69 was referred to. Ultimately, the honourable Supreme Court held that the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is the same for all goods entering into local area. In no uncertain terms, the honourable Supreme Court held that charging section is clear, unambiguous and the provisions cannot be read to mean that the imported goods coming from outside the country are excluded from charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are informed that the matter is still pending. However, the decision of the Division Bench in Fr. William Fernandez [1999] 115 STC 591 (Ker) has been reversed by the honourable Supreme Court and the matter has been decided against the assessee. Therefore, the said decision is an answer to the reference made in the case of Aashish Gulati (W. P. No. 11033 of 2000, dated September 6, 2000). 70. Therefore, in our considered view, there would be no necessity for a separate order to answer the reference and the decision of the honourable Supreme Court in Fr. William Fernandez [2018] 57 GSTR 6 (SC) ; covers the issue referred for consideration of the Division Bench. 71. Coming back to the arguments of Mr. R. L. Ramani, learned Senior Counsel, it is submitted that the above orders will clearly show that there was ambiguity and different views were taken by different Benches and under similar circumstances when the provisions of Tamil Nadu General Sales tax Act, 1959 were put to challenge, wherein as per entry 150 in the Schedule to the Act, articles of food and drink sold to customer in 3 star, 4star and 5 star hotels were taxable at 10 per cent. this was challenged as being dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases, which arise out of a different enactment, the purport and intent being totally different. First of the decision was in the year 1999 holding that entry tax is leviable on import of vehicles. Another learned single Bench took a different view but did not distinguish the earlier decision, but chose to follow the decision of the Division Bench of the Kerala High Court in Fr. William Fernandez reported in [1999] 115 STC 591 (Ker). In the third decision, there has been a reference because in the third decision, the first decision was noted. However, we need not labour much to make a further probe on this issue because the decision of the Division Bench of the Kerala High Court in Fr. William Fernandez reported in [1999] 115 STC 591 (Ker) has been reversed by the honourable Supreme Court and the matters have attained finality. It is not in dispute that the petitioner in W. P. No. 33525 of 2007 is still in possession and ownership of the vehicle imported by them. The law on the subject as decided by this court as early as September 1, 1999 holds that the entry tax is leviable on imported vehicles. Therefore, we do not find any merits in the submissions that the matter should be rele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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