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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 ..... (3) says that, an importer other than the one specified in sub-rule (2) shall furnish return for only the quarter in which an entry of motor vehicle into a local area is effected by him and such return shall be furnished on or before the last day of the month immediately succeeding the quarter - Therefore under sub-rule 3 of rule (3), a private importer, i.e., other than a dealer, shall furnish the return before the last day of the month immediately succeeding the quarter. 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 - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 15-7-2022 - Hon'ble Mr. Justice R.Suresh Kumar For the Petitioners : Mr.A.N.R.Jayaprathap in W.P.No.1045 of 2022, Mr.Raghavan Ramabadran for M/s. Lakshmi Kumaran Sridharan Attorneys in W.P.No.29130 of 2019, Mr.R.L.Ramani, Senior Counsel for Mr.B.Raveendran in W.P.Nos.28430, 28435, 28436, 28438 and 28441 of 2019 W.P.Nos.5097 and 5099 of 2021 For the Respondents : Mr.Haja Nazirudeen, AAG-I for Mr.Richardson Wilson, AGP in all the writ petitions COMMON ORDER Since the issue raised in these writ petitions is one and the same, with the consent of the learned counsel appearing for the parties, all these writ 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 dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that circumstances, after the legal battle was over as stated supra before the Hon'ble Supreme Court followed by the Division Bench of this Court referred to above in V.Krishnamurthy's case, the respondent Revenue issued a notice in the year 2021 to the petitioner for the payment of the entry tax, which was replied by the petitioner and pursuant to which, the Revenue proceeded to finalise the same and passed orders on 17.12.2021, calling upon the petitioner to pay the entry tax demand along with penalty, failing which steps would be taken to recover the money under Revenue Recovery Act. 3.10. In respect of the said impugned notice / demand, the taxcomponent 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, 15% of the tax demand was directed to be paid as a condition. Pursuant to the said order, 15% of the tax proposed or demanded was paid by the petitioner in each of the cases pertaining to various vehicles imported by the petitioner which are covered under the present writ petitions. 5.2. Ultimately, by virtue of the legal position in Fr. William Fernandez's case, as well as V.Krishnamurthy's case (cited supra), the respondent Revenue started issuing fresh notices as well as demand, wherein after having calculated the tax due payable by the petitioner in respect of each of the vehicles imported by them, such notices were issued. Challenging the same, the present set of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of entry tax on imported vehicle and followed the same, in M/s. T.V.S.Electronics case, a single Judge of this court on 19.04.2000 had also held that, the imported vehicles cannot be subjected to entry tax even though earlier single Judge order of this Court in M/s. Sumitomo Corporation's case v. State of Tamil Nadu, taken a different view on 01.09.1999 and in view of the conflicting decisions taken by two learned Judges of this Court, when a similar issue came up for consideration before another learned single Judge in W.P.No.11033 of 2000 in the matter of Aashish Gulati v. State of Tamil Nadu, the learned Judge having taken a view that, entry tax would not be made applicable to the 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n upheld by number of decisions of this court and in respect of each of these petitioners, they already approached this Court and filed writ petitions which were also considered and decided by dismissing those writ petitions upholding the liability of them to pay the entry tax and all these years since litigations were pending, where interim orders were granted, no further action could be made by the Revenue to recover the tax, hence the point of limitation cannot be put against the Revenue in these cases because of the pendency of the writ petitions and therefore, the two grounds urged by the petitioners side are untenable and are liable to be rejected, submitted by the learned AAG appearing for the Revenue. 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndez's case and held as follows : 9. In this result, the writ petition is allowed, issuing a direction to the respondent to register the imported vehicle viz., TOYOTA CAR - Harrier Wagon (5 seater), bearing Chassis No. MCU-150048264, Engine No. IMZ-0692834, imported by the petitioner for his use, within two weeks of production of a copy of this order along with necessary application. In the circumstances of the case, there is no order as to cost. Consequently, WMP.No.12354 of 1999 will stand dismissed. 15.4. Thereafter when another writ petition came to be moved before another learned Judge of this Court in the matter of Aashish Gulati v. State of Tamil Nadu in W.P.No.11033 of 2000, that writ petition was decided 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 veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Single Judge. 15.8. Subsequently, a number of writ petitions which were filed for the relief, following the legal position declared in Fr. William Fernandez's case by a Division Bench of the Kerala High Court of the year 2012, 2014 and some Writ Appeals also of the year 2006 were grouped together and heard by a Division Bench of this Court in the matter of V.Krishnamurthy v. State of Tamil Nadu reported in 2019 SCC Online Mad 8523. In the said decision of the Division Bench of this Court, dated 29.01.2019, it has been held as follows : 67. Thus, in our considered view, the judgment in the case of Fr.Willilam Fernandez applies with full force to the cases on hand which arise under the provisions of the Tamil Nadu 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles of food and drink sold to customer in 3 star, 4 star and 5 star hotels were taxable at 10% this was challenged as being discriminatory. 72. A Division Bench of this Court in Sangu Chakra Hotels (P) Ltd vs. State of Tamil Nadu (1985) 60 STC 125 allowed the writ petitions on the ground that the demand of higher rate of tax for star category hotels were discriminatory. The State Government filed appeal before the Hon'ble Supreme Court, which was tagged along with other connected matters and the Supreme Court in Kerala Hotel and Restaurant Association and others v. State of Kerala and others [1990 Vol. 77 STC 253], allowed the appeals filed by the State holding that there is a rational nexus exists for such classification and 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legated to the Government for grant of administrative waiver. 76. For all the above reasons, the writ petitions aredismissed and it is held that the petitioners are liable to pay entry tax on imported vehicles brought into the State of Tamil Nadu for use or for sale. Insofar as the miscellaneous petitions filed by the petitioners raising additional grounds are concerned, the learned Senior Counsel has not advanced any arguments, but their argument was only on the ground of administrative waiver in the light of the decision taken by us in the preceding paragraphs. Hence, there is no necessity to consider the additional grounds raised in the miscellaneous petitions. Accordingly, the same stands closed. No costs. 16. Therefore, what has been 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 liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, not exceeding twenty per cent, as may be fixed by the Government by notification, on the purchase value of the motor vehicles. 19.4. Section 7 speaks about the return and it says that every person liable to pay tax under this Act, shall furnish returns in such form, for such period, by such dates and to such authority, as may be prescribed. 19.5. Section 8 deals with the Assessment which says that, the amount of tax due from a person liable to pay tax under this Act shall be assessed separately for such period as may be prescribed. Sub-section 2 of Section 8 says that, if the assessing authority is satisfied that the return furnished by a person liable to pay tax, is correct and complete, he shall assess the amount of tax due from the person on the 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish return for only the quarter in which an entry of motor vehicle into a local area is effected by him and such return shall be furnished on or before the last day of the month immediately succeeding the quarter. 19.11. Therefore under sub-rule 3 of rule (3), a private importer, i.e., other than a dealer, shall furnish the return before the last day of the month immediately succeeding the quarter. 20. If we look at these provisions, insofar as the liability to pay tax on these petitioners are concerned, it has been well declared by the plethora of decisions referred to above. Therefore it should be taken into account that, these petitioners should have filed their return under Section 7 of the Act r/w rule 3. Insofar as the dealer is concerned, under rule 3(2), 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 petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. 27. In the said batch of cases, order passed by the Division Bench has made it clear that, the law has been declared by the Hon'ble Supreme Court in Fr. William Fernandez's case, therefore, even though in Aashish Gulati's case reference has already been made to have an authoritative pronouncement by a Division Bench in W.P.No.11033 of 2000, which was also pending, the Division Bench in V.Krishnamurthy's case held that, there was no necessity to give any answer to the reference made in Aashish Gulati's case, in view of the authoritative pronouncement of the Hon'ble Supreme Court in Fr.William Fernandez's case and following the same, the Division Bench in V.Krishnamurthy's case has made an elaborate order declaring that, the petitioners therein were 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, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the litigation period cannot be excluded for the purpose of calculating the limitation to proceed further either for assessment or for demand of tax on the part of the Revenue is concerned, that argument is liable to be rejected, because, it is a settled legal proposition that, when courts have taken cognizance of the issue, of course at the instance of the tax payer, challenging the liability or otherwise of the tax payable under any tax legislation and in this context, in those litigations, if the tax payer was able to get interim orders or restrain orders against the Revenue and those litigations if were pending for several years, certainly the Revenue were precluded from proceeding further. Therefore that period where the litigations were pending all long before the Court of law, certainly 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 ult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the time he is required, by or under the provisions of this Act to pay it, the assessing authority may, after giving such person a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty, in addition to the amount of tax and penalty under sub-section (1), a sum equal to one and half percent of the amount of tax for each month for the first three months and two percent of the amount of tax for each month thereafter. 40. By citing this provision, the Revenue contended that, since these persons, i.e., the petitioners have not paid the tax without any reasonable cause, they are liable to be inflicted with the penalty, i.e., two percent of the amount of tax for each month. That is the reason why they calculated such penalty and imposed the same on the petitioners. 41. 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 cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the tax. 48. In this context, when a similar issue had come up with regard to the imposing of penalty is concerned in M/s. National Asphalt Products and Construction Company v. State of Tamil Nadu, rep by its Secretary to Government, Department of Commercial Taxes and Religious Endowments and others, in W.P.No.11574 of 2006, a learned Judge of this Court, by order, dated 02.09.2020, has passed the following order : 6. The law, as on date, is to the effect that the imported vehicles brought into the State of Tamil Nadu for use or for sale would be subjected to payment of Entry Tax. Previously, the Hon'ble Division Bench of the Kerala High Court in the case of Fr. William Fernandez's case (supra) had held, in the year 1998, that entry of vehicles from abroad, is outside the scope of Entry Tax Act and therefore 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 German ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, wrong in passing the orders of penalty and upholding the same. The High Court also, in our opinion, committed an error in upholding the orders of penalty. In the result, these appeals are partly allowed. The order of the High Court and the orders of the Sales Tax Authorities imposing and upholding levy of penalty are set aside. Only to that extend the appellants succeed and their appeals are allowed. The judgment of the High Court in respect to the planting subsidy and transport subsidy is upheld. In the facts and circumstances of the case, there shall be no order as to costs . 8. A similar view has been taken in Hindustan Steels Limited's case (supra) , in the following manner:- 8. Under the Act penalty may be imposed for failure to register as a dealer Section 9(1) read with Section 25(1)(a) of the Act. But the liability 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 cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry tax on the imported vehicle has already been held in unequivocal terms by this Court in V.Krishnamurthy's case (cited supra) followed by number of decisions, the petitioners are liable to pay the entry tax as demanded by the Revenue. (ii) Insofar as the levy of penalty for non-payment of the tax as levied or imposed against the petitioners is concerned, such a penalty can be imposed on the petitioners only after 29.01.2019 but not before that date. (iii) As a sequel, the Revenue is hereby directed to verify as to when these petitioners have paid the tax and if the tax in full paid as demanded by the Revenue on or before 29.01.2019, no penalty can be imposed on them. (iv) Instead if they paid only after 29.01.2019, penalty can be imposed on them, under Section 15 of the Act only from 29.01.2019 till the date of payment of the full tax. (v) Even still if any of the petitioners have not paid the full tax, it is open to the Revenue to recover the full tax as well as the penalty calculating from 29.01.2019 till the date of complete recovery of the tax. 52. With all these directions, these writ petitions are disposed of accordingly, However, there shall be no order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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