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TMI Blog2022 (7) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petitions were heard together and are disposed of by this common order. 2. This batch of cases, insofar as the facts projected by the respective petitioners are concerned, are taken up in three separate categories. In the first two categories, two individuals filed the writ petitions and in the third category, a private limited hotel has filed some writ petitions. 3. W.P.No.1045 of 2022 : 3.1. This writ petition has been field by an individual who purchased a BMW Car by way of import in September 2005, as there was no authorised dealer in Chennai at that time. 3.2. At that time, already The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 (in short "The Entry Tax") was in force which provides for payment of entry tax on the entry of motor vehicles into the State of Tamil Nadu for the use or sale therein. The petitioner's imported vehicle when was produced before the Transport Authorities for registering the same, the Registering Authority orally insisted upon the payment of entry tax for the purpose of registering the imported vehicle. 3.3. This was triggered the petitioner to file a writ petition in W.P.No.38462 of 2005 for a direction to the regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponent was Rs.7,98,075/- and interest component was Rs.30,23,609/-. In view of the notice issued, where coercive steps was indicated by the Revenue, without prejudice or under protest, the petitioner paid the tax component of Rs.7,98,075/- and challenged the impugned order of noticecum-demand issued by the Revenue, dated 17.09.2021 and 17.12.2021. That is how this writ petition was filed. 4. W.P.No.29130 of 2019 : 4.1. This writ petition also was filed by an individual. The case of him is, he imported two foreign vehicles, one is on 01.02.2010 and another one is on 30.11.2010. When he approached the Registering Authority for registering the said vehicles it was not registered on the ground that, the petitioner should pay the entry tax under the Entry Tax Act. Therefore the petitioner had filed Writ Petitions in W.P.Nos.5122 of 2010 and 4056 of 2011 challenging the refusal of the transport authority in registering the vehicle, where the petitioner was able to get interim directions to the Registering Authority to register the imported vehicle without demanding the entry tax. 4.2. However, the said writ petitions, pursuant to the legal position ashas been stated earlier, where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f writ petitions have been filed. 6. In all these cases, it is to be noted that, the two individuals as well as the Hotels Private Ltd., had already approached this Court, filed writ petitions as stated supra and those writ petitions pending for some years, had been disposed of after 2017 or 2019 in view of the orders passed by the Hon'ble Supreme Court as well as the Division Bench of this Court in V.Krishnamurthy's case referred to above. 7. Now this is the last round of litigation, which are generated by these petitioners, where, they raised the ground that, there must be an assessment order before proceeding for any recovery or demand of tax and such kind of assessment has not been made in respect of the petitioners under the provisions of the Entry Tax Act as well as the rules made thereunder. Also insofar as making such an assessment since there was three years limitation prescribed, within which since no assessment has been made, it is barred by limitation, therefore assessment cannot be made now. Therefore on these two grounds mainly they raised the contention that, the present demand or notices issued demanding or proposing to recover the tax as well as the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported vehicle, he was pleased to refer the matter to a Division Bench for authoritative pronouncement and by virtue of that reference, it was posted before a Division Bench, where a Division Bench of this Court granted interim order restraining the Revenue from taking steps to collect any entry tax under the provisions of the Entry Tax Act on the vehicle imported by the petitioner and that writ petition also was pending for several years and in the meanwhile, number of writ petitions on similar line had been filed, which were also entertained and placed before the Division Bench for decision and those cases were also pending and only after the order passed by the Hon'ble Supreme Court in State of Kerala and others v. Fr. William Fernandez etc., reported in 2017 SCC Online SC 1291, dated 09.10.2017, the cloud was removed and the position has been clarified and only thereafter, i.e., on 29.01.2019, all those writ petitions were disposed by a Division Bench of this court in V.Krishnamurthy v. State of Tamil Nadu, followed by the decision of another Division Bench on 14.11.2019 in the referred case, i.e., W.P.No.11033 of 2000 in the matter of Aashish Gulati v. State of Tamil Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. 14. In order to delve into the said issue raised in this batch of cases, first, let me take the line of Judgments as indicated above, as to what has been exactly decided in those cases and then will proceed to examine whether the two grounds urged by the petitioners side are tenable or not. 15. Legal position : 15.1. When the liability of importers, who imported foreign vehicles to pay entry tax on the basis of a similar tax law as that of the Tamil Nadu Act, in the State of Kerala, was the subject matter before a Division Bench of the Kerala High Court in the matter of Fr.William Fernandez v. State of Kerala in W.A.No.770 of 1997 etc., batch which was decided on 06.01.1998 reported in 1998 SCC Online Kerala 230 : (1998) 1 KLT 256. The following is the operative portion of the order passed by the Kerala Division Bench : "25. In the view we have taken about the applicability of the Act to imported cars, we think it unnecessary to deal with the question of exemption granted under the proviso to S.3 of the Act, that, it was said, is violative of Art. 14 of the Constitution. This aspect has been dealt with in the impugned judgment, where relevant judicial precedents have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided by another learned Judge, by order, dated 06.09.2000, where he has taken the following view : "11. From a reading of the abovesaid definitions and the provisions of the Act, I am of the opinion that there cannot be any levy of entry tax under Section 3 of the Act on the imported case on the basis that there is evasion of sales tax. Moreover even according to the proviso to Section 3 of the Act, such levy of entry tax is exempted with reference to certain vehicles. This provision cannot be made applicable to cars brought from abroad. This provision also should be taken into consideration to come to the conclusion that the Act is not intended to levy entry tax on the imported cars from foreign countries. The abovesaid conclusion of mine is also supported by the decision of the Division bench of Kerala High Court in Fr.William Fernandez v. State of Kerala, Vol. 115 S.T.C - 591. 12. Since, I have taken a different view, Registry is directed to place the papers before My Lord, the Honourable The Acting Chief Justice, to post the case before the Division Bench for considering the issue." 15.5. Pursuant to the said reference, the writ petition was placed before a Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act which is pari materia to the Kerala enactment, which was considered by the Hon'ble Supreme Court and levy of entry tax on imported vehicles was upheld. Thus, we are of the clear view that the prayer sought for by the writ petitioners in these cases are not tenable and the writ petitions are liable to be dismissed. 68. Mr.R.L.Ramani, learned Senior Counsel assisted by Mr.B.Raveendran counsel for the petitioner in W.P.No.33525 of 2007 argued on a slightly different plain. As we can understand from the submissions of the learned counsel that the learned counsel would not seriously contest the levy of entry tax on imported vehicles as there is no submission made on that aspect, but arguments were confined only on the ground that these are fit cases where administrative waiver of taxes has to be granted. 69. The submission of the learned Senior Counselis that the first of the decisions was rendered by this Court in a writ petition in W.P.No.498 of 1991 [M/s.Sumitomo Corporation v. State of Tamil Nadu and another] and the said writ petition was dismissed vide order dated 01.09.1999, thereby, holding that entry tax was leviable even for imported vehicles. In W.P.No.8738 of 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification is founded on intelligible differentia. Subsequently, one of the petitioners had filed separate appeals before the Supreme Court in Civil Appeal Nos.101 and 102 of 1995, wherein, it was pointed out that after the Division Bench judgment in Sangu Chakra Hotels (P) Ltd., entry was struck down and subsequently after the decision of the Supreme Court in Kerala Hotel and Restaurant Association (supra), entry was revived and in the interregnum, tax was not collected and therefore, administrative waiver was granted. 73. In this regard, the petitioners relied upon G.O.Ms.No.973 Revenue Department, dated 27.05.1967. The Hon'ble Supreme Court directed the Government to examine the claim of the South India Hotels and Restaurants Association and the claim was considered and vide G.O.Ms.No.157 Commercial Taxes and Religious Endowments Department, dated 22.04.1996, administrative waiver was granted in subject to certain conditions. Therefore, it is the submission of the learned Senior Counsel that identical directions can be issued in these cases as well, as the petitioners cannot now pay tax. 74. We have heard the learned Special Government Pleader on the above submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een declared by the Division Bench in the said V.Krishnamurthy's case is that, the petitioners therein, like the present petitioners, were liable to pay entry tax on imported vehicles brought into the State of Tamil Nadu for use or for sale. Therefore the liability of every importer who imported and brought the foreign vehicle into the State of Tamil Nadu are liable to pay entry tax under the Entry Tax Act. Therefore, insofar as the liability is concerned, absolutely there is no scope for the petitioners to get rid of the situation. 17. It is further to be noted that, after the said Division BenchJudgment in V.Krishnamurthy's case, another writ petition in Aashish Gulati v. State of Tamil Nadu in W.P.No.11033 of 2000 which was referred to a Division Bench for an authoritative pronouncement in view of the conflicting decisions taken by two learned Judges of the writ court differently, also came to be disposed of by another Division Bench, by order, dated 14.11.2019, where the Division Bench following the decision of the Division Bench in V.Krishnamurthy's case, has dismissed the said writ petition in Aashish Gulati's case. 18. In view of the settled legal position, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of such return. Sub-section 3 says that if the assessing authority is not satisfied that the return furnished by a person liable to pay tax, is correct and complete and he thinks it necessary to require the presence of the person or production of evidence etc., notice to be served to require the presence of such person. Sub-section 4 says that, if a person fails to comply with the requirements of any notice issued under sub-section (3), the assessing authority shall determine the purchase value of the motor vehicle under the proviso to clause (k) of Section 2 to the best of his judgment and assess the amount of tax due from him. 19.6. Sub-section (5) of Section 8 is very relevant, which says that, no order of assessment under sub-section (3) or (4) shall be made after the expiry of three years from the last date prescribed for filing of returns of the particular period. 19.7. Section 15 speaks about penalty, where sub-section (1) says that, where any person liable to pay tax under this Act fails to comply with any of the provisions of this Act, then the assessing authority may, after giving such person a reasonable opportunity of being heard, by order in writing impose on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such return should have been filed and for others, under rule 3(3) return should have been filed immediately following the succeeding month of the quarter. 21. In all these cases, these petitioners may not be the dealer but only can be treated as an individual, for their own use since they imported the vehicles concerned, they should have filed the return under rule 3(3). However, admittedly none of the petitioners have filed such return within the time. They stated that, the reason for non-filing of the return was that, before they imported the respective vehicles, the pari materia legislation of the State of Kerala was testified and it was declared so, that the entry tax cannot be levied on the imported vehicle. 22. When that being the legal position when paria materia provisions was available in the Tamil Nadu Act, i.e., Entry Tax Act of Tamil Nadu, the petitioners and similarly placed persons were on the impression throughout the State that, the entry tax cannot be imposed against the imported vehicle. 23. Therefore on that grounds, according to them, when they placedtheir vehicle before the Transport Authority for registration, since either it was refused for registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay entry tax on imported vehicles brought into the State of Tamil Nadu for the use or for sale. 28. Therefore the bone of contention of the petitioners in most of the affidavits filed and the arguments advanced on behalf of the petitioners in this batch that, due to the fluid situation of the legal position as some judgments had come from Kerala High Court in favour of the petitioners, following the same, writ court in one case decided in favour of the petitioners and another court decided in favour of the Revenue and when third writ petition had come up, a learned Judge wanted to take a difference view, therefore he referred the matter to the Division Bench, where also the Division Bench granted some interim order and the cases were pending all along for several years for more than a decade and so and therefore because of such a situation, where the legal position was not so clear, neither the Revenue could proceed further against these petitioners, nor the petitioners could move forward to pay the tax or decide otherwise. 29. If this is the stand taken by the petitioners and the arguments advanced on their behalf before this court in this batch of cases, their delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be excluded and in this regard, the provisions of the Act need not have an express wordings enabling the Revenue to exclude the period of litigation for the purpose of calculating the limitation. 33. Moreover in these cases, the very liability itself was questioned by number of persons in the earlier round of litigations and those litigations were pending for several years and ultimately decided only in the year 2019. Till such time, absolutely there was no scope for the Revenue to proceed further as in number of cases since there were interim orders issued which were subsisting all these years, any move if it had been taken on the side of the Revenue, that would have been treated as a contempt of Court and therefore certainly such litigation period up to the decision of the Division Bench in V.Krishnamurthy's case can be excluded from the purview of limitation. 34. Therefore the argument advanced on behalf of the petitioners side that, the Revenue lost its limitation in proceeding further against the petitioners have no substance, therefore that argument is liable to be rejected. 35. Though in one case, the petitioner submitted that the vehicle purchased by him in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this context, it is to be noted that, sub-section (2) of Section 15 makes it very clear that, "if the person does not, without reasonable cause pay the tax within the time he is required", which means, if the delay is caused without any reasonable cause, then only such a penalty clause can be invoked. In other words, if the delay is caused for any reasonable cause certainly the penalty provisions cannot be invoked. 42. Here in the case in hand, the very liability itself was under cloud or in question in view of the decisions of the Court of law referred to above. There were line of judgments and unless and until the finality comes from the Hon'ble Supreme Court in Fr. William Fernandez's case on 09.10.2017 followed by the decision of a Division Bench of this Court in V.Krishnamurthy's case, dated 29.01.2019, the legal position was not so clear as three conflicting decisions were taken by the writ courts in various writ petitions as referred to above. 43. Moreover in number of cases in the first round including the petitioners who approached this Court, of course against the transport authorities, prohibitory orders were issued not to collect or not to demand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not liable for payment of Entry Tax. This position of law continued till the Hon'ble Apex Court in State of Kerala and others Vs. Fr. William Fernandez and others [2018 (57) GSTR 6 (SC)] decided on 09.10.2017 that the vehicles imported into a country would be subjected to Entry Tax. Admittedly, the petitioner had imported the three vehicles from Germany, in the year 2004/2005, at which point of time, the law was to the effect that Entry Tax is exempted for imported vehicles. While that being so, I do not find any fault with the petitioner when they had not paid the Entry Tax at the time of import. Furthermore, when the Enforcement Wing of the respondents had insisted for payment of the Entry Tax, the petitioner had immediately paid the Entry Tax of Rs.22,59,619/- on 26.10.2005 itself. However for such omission, the second respondent herein had now invoked Section 15(1) of the Entry Tax Act and proposed a penalty, at twice the amount of the Tax. 7. It is no doubt true that the second respondent is empowered to levy such a penalty. However, this is the case where the Entry Tax was not paid by the petitioner on the first instance, in view of the prevailing law at that point o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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