Madras High Court
C. Joseph Vijay vs Assistant Commissioner (St) ... on 17 September, 2021
W.P.No.1045 of 2022 etc., batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 14.03.2022
Pronounced on : 15.07.2022
CORAM:
THE HON'BLE MR. JUSTICE R.SURESH KUMAR
W.P.Nos.1045 of 2022, 29130 of 2019,
28430 of 2019, 28435 of 2019,
28436 of 2019, 28438 of 2019,
28441 of 2019, 5097 of 2021, 5099 of 2021
and
connected miscellaneous petitions
W.P.No.1045 of 2022
C. Joseph Vijay ...... Petitioner
-vs-
Assistant Commissioner (ST) (FAC)
K.K.Nagar Assessment Circle,
5th Floor,
PAPJM Annexe Building,
No.1, Greams Road,
Chennai - 600 006. ........ Respondent
Writ petition filed under Article 226 of Constitution of India praying
for issuance of a Writ of Certiorari, calling for the records on the files of the
respondents herein in Rc.73/2021/A3, dated 17.09.2021 received on
22.09.2021 and consequential recovery notice in Rc.73/2021, dated
17.12.2021 and quash the same.
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W.P.No.1045 of 2022 etc., batch
W.P.No.29130 of 2019
J.Harris Jeyaraj ...... Petitioner
-vs-
1. The Assistant Commissioner (ST) (FAC)
K.K.Nagar Assessment Circle,
Chennai - 600 006.
2. The Commissioner of State Taxes
Chepauk, Chennai - 600 005.
3. The Government of Tamil Nadu
Rep. through its Secretary
Department of Commercial Taxes
Tamil Nadu Secretariat,
Chennai - 600 003. ........ Respondents
Writ petition filed under Article 226 of Constitution of India praying
for issuance of a Writ of Certiorari, calling for the records on the files of the
respondents pertaining to impugned Recovery Notice No. RC.768/2019/A3,
dated 27.09.2019 passed by the first respondent and quash the same.
W.P.Nos.28430 of 2019, 28435 of 2019,
28436 of 2019, 28438 of 2019, 28441 of 2019,
5097 of 2021 and 5099 of 2021
M/s. Adyar Gate Hotels Ltd.,
Rep. by its Joint Managing Director
No.132, T.T.K.Road,
Chennai - 600 018. ...... Petitioner in all the writ
petitions
-vs-
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W.P.No.1045 of 2022 etc., batch
1. The State of Tamil Nadu
Rep. by the Secretary
Commercial Taxes Department,
Fort St. George,
Chennai - 600 009.
2. The Assistant Commissioner (ST)
Alwarpet Assessment Circle,
Taluk Office Building, R.A.Puram,
Chennai - 600 028. ........ Respondents
in all the writ petitions
Prayer in W.P.No.28430, 28435, 28436, 28438 and 28441 of 2019 : Writ
petitions filed under Article 226 of Constitution of India praying for
issuance of a Writ of Certiorari, calling for the records of the second
respondent in his proceedings in Rc.919/2019/A3 and quash the notice,
dated 13.08.2019 passed therein.
Prayer in W.P.No.5097 of 2021 : Writ petition filed under Article 226 of
Constitution of India praying for issuance of a Writ of Certiorari, calling for
the records of the second respondent in his proceedings in Rc.1419/2011/A3
and quash the demand notice dated 05.02.2021 issued therein.
Prayer in W.P.No.5099 of 2021 : Writ petition filed under Article 226 of
Constitution of India praying for issuance of a Writ of Certiorari, calling for
the records of the second respondent in his proceedings in Rc.2559/2005/A3
and quash the notice dated 05.02.2021 issued therein.
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W.P.No.1045 of 2022 etc., batch
For 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 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.
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W.P.No.1045 of 2022 etc., batch
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 registering authority to register
the imported car without insisting upon payment of entry tax.
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3.4. In the said writ petition, an interim direction was given in
W.M.P.No.41180 of 2005, dated 29.11.2005, directing the registering
authority to register the imported car without insisting upon the entry tax.
3.5. Thereafter, based on the legal position, as number of judgments
had come in the line as to whether the imported vehicles like the petitioner
is liable to be levied entry tax and some judgments passed by the Kerala
High Court had gone for appeal to the Hon'ble Supreme Court and during
the pendency of the same, judgments had come from this Courts, where two
conflicting views had been taken by two different learned single Judges and
ultimately the matter was referred to a Division Bench.
3.6. Those cases were pending for several years, i.e., up to 2019.
While so, on 09.10.2017, the case arose from the Kerala High Court in the
matter of State of Kerala v. Fr.William Fernandez, was decided on
09.10.2017 by the Hon'ble Supreme Court in (2017) SCC Online 1291,
where the validity of the pari materia entry tax Act of the Kerala State was
upheld and the liability to pay entry tax even for imported vehicle was
confirmed.
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3.7. Following the said Supreme Court decision a number of cases /
writ petitions, which were pending before this Court were grouped together
and decided by a Division Bench of this Court in V.Krishnamurthy v. State
of Tamil Nadu, etc., batch, by order, dated 29.01.2019 reported in 2019
SCC Online Mad 8523.
3.8. In the meanwhile, the petitioner had sold the car in 2009 to
another individual for consideration and it was not in the possession of the
petitioner since 2009.
3.9. Only in 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.
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3.10. In respect of the said impugned notice / demand, the tax
component 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 notice-
cum-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.
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4.2. However, the said writ petitions, pursuant to the legal position as
has been stated earlier, where the Hon'ble Supreme Court passed order on
09.10.2017 in Fr. William Fernandez's case, followed by the Division Bench
judgment of this Court in V.Krishnamurthy's case, filed by the petitioner
i.e., W.P.No.4056 of 2011 and 5122 of 2010 were dismissed on 20.11.2018
and 04.07.2019 respectively.
4.3. Thereafter, on 18.09.2019, the Revenue issued notice to the
petitioner seeking information pertaining to import details, freight charge
details, invoices and accessories and entry tax paid, if any, on the imported
vehicles. Since only part of the details were filed, except insurance details,
the Revenue proceeded to issue a recovery notice, dated 27.09.2019
demanding the tax arrears to the extent of Rs.13,07,923/-. Challenging the
same, the present writ petition was filed.
5. W.P.Nos. 28430 of 2019, 28435 of 2019, 28436 of 2019, 28438 of
2019, 28441 of 2019, 5097 of 2021 and 5099 of 2021 :
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5.1. These seven cases have been filed by a private limited company,
namely, M/s. Adyar Gate Hotels Ltd. The sum and substance of these cases,
as per the affidavit averments is concerned, the petitioner is a star hotel and
one of the services required to be rendered by the petitioner to the customers
is the Airport transfers. For the said purpose, the petitioner was required to
purchase imported cars for the use for its elite customers. Therefore at
various point of time, cars were imported from foreign soil and when those
imported cars were placed before the Registering Authority for registration,
it was refused on the ground that, the petitioner should pay the entry tax
under the Entry Tax Act and only at that juncture, the petitioner earlier had
filed writ petitions and in those writ petitions, 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
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W.P.No.1045 of 2022 etc., batch
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 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
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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 penalty are concerned are unlawful and against the provisions
of the Entry Tax Act. Therefore, on these grounds, they challenge the
respective impugned notices as well as demand issued by the Revenue
against each of these petitioners.
8. Arguments were advanced by Mr.R.L.Ramani, learned Senior
counsel assisted by Mr.B.Raveendran, Mr.A.N.R.Jayapratap and
Mr.Raghavan Ramabadran, learned counsel appearing on behalf of the
petitioners. Like that, Mr.Haja Nazirudeen, learned Additional Advocate
General assisted by Mr.Richardson Wilson, learned Additional Government
Pleader appearing for the respondent Revenue made his submissions.
9. A line of Judgments have been cited by both sides, especially the
Judgments, i.e.,
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W.P.No.1045 of 2022 etc., batch
(i) Fr.William Fernandez v. State of Kerala, 1998 SCC Online Ker
(ii) M/s. Sumitomo Corporation v. State of Tamil Nadu and others,
1999 SCC Online Mad 700
(iii) M/s. TVS Electronics Limited, v. The Registering Authority,
Chennai (Central), dated 19.04.2000 in W.P.No.8738 of 1999 of the Madras
High Court
(iv) State of Kerala and others v. Fr.William Fernandez etc., 2017
SCC Online 1291
(v) V.Krishnamurthy v. State of T.N, 2019 SCC Online Mad 8523
(vi) Aashish Gulati v. State of Tamil Nadu, dated 14.11.2019 made in
W.P.No.11033 of 2000 of the Madras High Court.
10. These line of Judgments have been cited by the learned counsel
appearing for both sides and they would contend that, insofar as the
petitioners side is concerned, in view of the law having been declared by the
Kerala High Court in Fr. William Fernandez's case referred to above (1998
SCC Online Ker 230), the pari materia entry tax Act of the Kerala State was
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held to be unenforceable in 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 on similar line had been filed, which
were also entertained and placed before the Division Bench for decision and
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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
Nadu, till such time, i.e., from the year 2000, nearly about 20 years, there
was a fluid situation on the legal position as to whether the imported
vehicles can be subjected to entry tax under the provisions of Entry Tax Act
and such entry tax can be levied and recovered from them.
11. In view of the said confused legal position where litigations were
pending for long years, where interim orders were granted restraining the
revenue from taking any steps to recover the amount of tax under the
provisions of the Entry Tax Act on imported vehicles and in some cases,
interim orders were granted, directing the importers to pay 15% of the tax
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proposed and with those interim orders since those writ petitions were
pending for long years, neither the Revenue nor the importers have acted
upon to collect the remaining entry tax or to pay the entry tax as the case
may be and therefore these situation was prevailing up to 2019.
12. Only thereafter the Revenue started issuing notices and started
demanding the tax due payable, by each of the importers who imported the
foreign vehicles at various point of time including the petitioners herein.
Therefore this round of litigation according to the learned counsel appearing
for the parties have come up only in the year 2019, 2021 and 2022.
13. In this context, the two grounds raised by the petitioners side that,
without assessment order, no demand can be made and the assessment order
even cannot be made now in view of the limitation provided under the Act
is concerned, it was the counter argument on behalf of the learned
Additional Advocate General appearing for the Revenue that, the very
liability of paying the tax since has been upheld by number of decisions of
this court and in respect of each of these petitioners, they already
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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
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W.P.No.1045 of 2022 etc., batch
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 been considered and we agree
that the contention urged was rightly repelled. We
declare that vehicles brought from abroad are not
liable to entry tax. They are directed to be given
registration in Kerala in terms of the applications
made there for before the concerned respondents,
who shall not insist upon production of clearance
certificate under the provisions of the Act."
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15.2. Followed by the said Division Bench Judgment of the Kerala
High Court in Fr.William Fernandez's case, a writ petition was moved
before this Court in W.P.No.498 of 1991 in M/s. Sumitomo Corporation v.
State of Tamil Nadu and others, which was dealt with by a learned
Judge,who has taken a different view that, the Tamil Nadu Entry Tax
provisions would be applicable to the imported vehicle also. The operative
portion of the order of the learned single Judge in M/s. Sumitomo
Corporation's case reads thus :
"14. Under these circumstances, I hold that the
impugned Act will apply on the entry of any motor
vehicle into the local area of this State whether by
way of import from foreign countries or by
purchase from other States and Union Territories.
Accordingly, there is no merit in the writ petition
and the same is dismissed. No costs. Consequently,
W.M.P.Nos.769 of 1991 and 12942 of 1995 are
closed."
15.3. However, when a similar writ petition was moved before
another learned Judge of this Court in M/s. TVS Electronics Limited v. The
Registering Authority, Chennai (Central) in W.P.No.8738 of 1999, which
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came to be decided on 19.04.2000, the learned Judge has taken a different
view, of course by following the decision of the Kerala Division Bench in
Fr. William Fernandez'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-15-
0048264, 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
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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, where interim order of injunction was granted
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restraining the Revenue from taking steps to collect any entry tax under the
provisions of the Tamil Nadu Entry Tax Act on the vehicle imported by the
petitioner therein. The relevant order of the Division Bench was passed on
04.09.2001.
15.6. Subsequently, it seems number of similar writ petitions had
been filed before this court, which were entertained and all those writ
petitions had been kept pending, wherein either interim orders of injunction
have been granted restraining the Revenue from assessing or recovering the
entry tax payable by them on the imported vehicle or in some cases,
conditional order of directing the importer to pay 15% of the tax demand
and the remaining amount is concerned, interim order were granted and
those cases were pending for several years.
15.7. In the meanwhile, the State of Kerala preferred appeals before
the Hon'ble Supreme Court against the decision of the Kerala Division
Bench in Fr. William Fernandez's case (cited supra) in Civil Appeal Nos.
3381 - 3400 of 1998. Those Civil Appeals with connected Appeals were
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heard together and decided by the Hon'ble Supreme Court on 09.10.2017 in
State of Kerala v. Fr. William Fernandez etc., reported in 2017 SCC Online
SC 1291. In the said Judgment, the Hon'ble Supreme Court, having
considered all aspects by an exhaustive decision has ultimately held as
follows:
" The appeals filed by the State of Kerala are
allowed. The judgment of the Division Bench
holding that no entry tax was leviable on the
vehicle imported from territories outside the
country is set aside, restoring the judgment of the
learned 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 :
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"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
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 Counsel
is that the first of the decisions was rendered by
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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 1999 filed
by M/s.TVS Electronics Limited v. The
Registering Authority dated 19.04.2000, the writ
petition was allowed with a direction to register
imported vehicles without collection of entry tax.
The third decision is in the case of Aashish Gulati
v. The State of Tamil Nadu and others
W.P.No.11033 of 2000, dated 06.09.2000,
whereby, the learned single Bench did not agree
with the view taken in the case of Sumitomo
Corporation, largely on account of the decision of
the Division Bench of Kerala High Court in
Fr.William Fernandez (supra). On account of the
differing view, the matter was referred to the
Hon'ble Chief Justice to post the case before the
Division Bench. We are informed that the matter is
still pending. However, the decision of the
Division Bench in Fr.William Fernandez (supra)
has been reversed by the Hon'ble Supreme Court
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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
(supra).
70. Therefore, in our considered view, there would
be no necessity for a separate order to answer the
reference and the decision of the Hon'ble Supreme
Court in Fr.William Fernandez (supra) 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, 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
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(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 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
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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 submissions.
75. At the first instance, we need to point out that
no Court can compel the Government to exercise
its power to examine or for that matter to grant
administrative waiver. It is a policy decision to be
taken by the Government and it is not for the Court
to dictate as to whether or not the Government
should exercise such power. That apart, facts of
the case in which Government granted
administrative waiver subject to conditions vide
G.O.Ms.No.157 dated 22.04.1996 was entirely
different and cannot be applied to the present
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cases, 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. 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 has been reversed by the
Hon'ble 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 01.09.1999 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 relegated to the Government for
grant of administrative waiver.
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76. For all the above reasons, the writ petitions are
dismissed 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 liability is concerned, absolutely there is no scope for the
petitioners to get rid of the situation.
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17. It is further to be noted that, after the said Division Bench
Judgment 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, as the liability of these
importers to pay the entry tax on their imported vehicle since has been
declared or held in unequivocal terms by more than one decision of this
Court, of course by following the earlier decision of the Hon'ble Supreme
Court on the law, the Revenue started issuing fresh notices by calculating
the tax component as well as the penalty component payable by each of the
petitioners and only those notices or demand now are under challenge in
these writ petitions.
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19. On legal ground submitted by the petitioner side :
19.1. As indicated above, two legal grounds were raised by the
petitioners side. One is that, there must be an assessment order, without
which, no demand for recovery of the tax can be made by the Revenue. The
second ground is that, even for making an assessment, in view of the
limitation under the provisions of the Entry Tax Act, such an assessment
cannot be made now. Therefore, on these two grounds, they wanted to assail
the impugned notice or demand or recovery proceedings.
19.2. In order to deal with the said two grounds, first let me take to
the relevant provisions of the Act, namely, the Tamil Nadu Tax on Entry of
Motor Vehicles into Local Areas Act, 1990 (in short "The Entry Tax Act").
19.3. Section 3 of the Act is the levying section or charging section
which says that, there shall be levied and collected a tax on the entry of any
motor vehicles into any local area for use or sale, within which is liable for
registration, or for the assignment of new registration mark, in the State
under the Motor Vehicles Act, 1998. The rate of tax shall be at such rate or
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rates, 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
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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 him in addition to any tax payable, a sum by way of
penalty not exceeding twice the amount of tax.
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19.8. Sub-section (2) of Section 15 says that, if the person does not,
without reasonable cause pay the tax 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 (a) one and half percent
of the amount of tax for each month for the first three months and (b) two
percent of the amount of tax for each month thereafter.
19.9. These are all the important provisions which are to be noted.
Therefore the scheme of the Act is that, the charging section is Section 3
and the liability of the tax payer to file return is under Section 7. Thereafter
the assessment is under section 8 and the penalty provision is available in
Section 15.
19.10. Under the rule making power, the rule making authority, i.e.,
the Government of Tamil Nadu, made rules called "The Tamil Nadu Tax on
Entry of Motor Vehicles Rules, 1990 (in short "The Rules"), where rule 3
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speaks about "Submission of Returns and Payment of tax". The sub-rule 2
of rule 3 says that, an importer, who is a dealer in motor vehicles, liable to
pay tax under the General Sales Tax Act shall furnish return for each month
and each such return shall be furnished on or before the 20th day of the
month immediately succeeding. Sub-rule (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.
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
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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 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.
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23. Therefore on that grounds, according to them, when they placed
their vehicle before the Transport Authority for registration, since either it
was refused for registration or insisting upon the importer to pay the entry
tax for the purpose of registering the vehicle, that only triggered the
petitioners to approach this court in the first round of litigation, seeking for
a prohibitory order, that is restrainment against the transport authorities
from insisting upon to pay entry tax for the purpose of registering their
vehicle.
24. In those cases interim orders were passed directing the registering
authority to register the vehicle without insisting the entry tax. Subsequently
in some cases, it seems conditional orders were passed, whereby 15% of the
tax were directed to be paid. It is to be noted that, in some of the cases filed
in this nature, mainly against the transport authority, the Revenue people
were not made as a party and in some cases, Revenue Authorities also, i.e.,
tax authorities were made as a party.
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25. Be that as it may, the legal position was very fluid at that time,
which was prevailing for more than 15 years between 2000 and 2017 and
some light has been thrown only after the decision of the Hon'ble Supreme
Court in State of Kerala v. Fr. William Fernandez's case, which was decided
on 09.10.2017.
26. The moment such declaration has come from the Hon'ble
Supreme Court in Fr. William Fernandez's case, the petitioners and similarly
placed persons seems to have waited for the decision to be made in this
regard on the pending litigations before this Court and ultimately in
V.Krishnamurthy's case, all those writ petitions were heard together and
disposed of by a Division Bench of this Court, by order dated 29.01.2019.
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
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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,
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
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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
in paying the tax for the reason of pendency of cases and the fluid legal
situation would certainly apply to the Revenue side also.
30. In number of cases restrain orders have been passed against the
Revenue not to proceed against them and in some cases only conditional
orders were passed by directing the importers to pay only 15% of the tax
demand.
31. In all these cases, under Section 7 of the Act r/w rule 3(2) or 3(3),
no return had been filed. Therefore invoking the best judgment theory, after
collecting the details about the cost of the vehicle imported, duty paid on
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them, insurance charges, clearance charges etc., all put together which are
liable to be calculated for the purpose of assessing the entry tax either at the
rate of 12.5% or at the rate of 14.5%, accordingly, those amount were
assessed. Therefore, the said action taken on the part of the Revenue in
completing the assessment based on the input supplied by the petitioners
with regard to the value of the vehicle as well as the amount paid on such
import by way of import duty etc., cannot be found fault with.
32. Though some arguments were advanced by the learned counsel
appearing for the petitioners that, if at all the litigation period is to be
excluded for the purpose of calculating the limitation for making the
assessment order is concerned, there is no such express provision available
in the Entry Tax Act, however, similar such provisions to exclude the
litigation period from the purview of limitation is available expressly in
various tax legislations, therefore in the absence of such a provision, 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,
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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 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
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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 2005 was sold to some other party in 2009, therefore he
is not liable to pay any tax is concerned, it is not the liability as on today but
it was the liability at the time of importing the vehicle and brought the
vehicle into the State of Tamil Nadu, i.e., in the year 2005. Therefore that
argument also is liable to be rejected.
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36. In respect of the other ground raised by the petitioners that, no
assessment order has been made, for which, no notice has been given is
concerned, in some of the cases repeatedly notices have been given even
now, i.e., after 2019 and for the remaining cases, notice were issued earlier.
In fact the liability on the part of the importers to file return under Section 7
r/w rule 3(3) was very clear, however, these petitioners have chosen not to
file the return. Therefore based on the best judgment theory, under sub-
section 4 of Section 8, the Revenue proceeded to assess the tax payable by
these petitioners and accordingly, the tax liability along with penalty having
been calculated was demanded from these petitioners.
37. Therefore the two grounds raised by the petitioners side since are
untenable for the reasons and the discussions herein above made, those two
grounds raised on behalf of the petitioners are hereby rejected.
38. Now let us come to the point with regard to the penalty imposed
against the petitioners.
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39. In this context, it was contended on behalf of the Revenue that,
Section 15 of the Act provides for such a penalty, especially under Section
15(2), that if a person does not, without reasonable cause, pay the tax 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.
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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
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
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authorities, prohibitory orders were issued not to collect or not to demand
the entry tax and directions were issued to register the vehicle of the
petitioners without insisting the entry tax. In some cases, conditional orders
were passed to pay only 15% of the tax demand.
44. In view of these decisions and the long pendency of various
litigations including the litigations initiated by the petitioners, it cannot be
expected that, the petitioners should have come forward to pay the tax in
full at the earliest.
45. How the litigation time now is being deducted for the purpose of
limitation on the side of the Revenue, the same logic would apply to the
case of the petitioners also in not paying the tax in time.
46. The only possible way to decide as to whether penalty clause can
be invoked against the petitioners is concerned, whether they have paid the
tax or have come forward to pay the tax at least after 29.01.2019, where the
Division Bench has made in unequivocal terms about the liability of
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these petitioners to pay the tax as referred to above. If somebody had come
forward to pay the tax immediately after the pronouncement of the Division
Bench Judgment in V.Krishnamurthy's case and paid the same, certainly
those payment can be accepted by the Revenue, without invoking any
penalty clause.
47. However even after the Division Bench judgment in
V.Krishnamurthy's case still the petitioners have not paid the tax or
belatedly paid the tax, the Revenue can invoke the penalty clause under
Section 15 of the Act and can proceed to recover the penalty as provided
under Section 15(2), w.e.f., 29.01.2019 till the payment 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 :
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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 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
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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 of time. In such circumstances, when there are
bona-fides on the part of the importer in refraining from
paying the tax, the Hon'ble Apex Court in E.I.D Parry's
case (supra) had held that the levy of penalty was not
justified. The relevant portion of the order reads as thus:-
“23. But so far as levy of penalty is concerned, we
do not think that the sales tax authorities were
justified in levying it. Till the judgment of the
Madras High Court, on July 15, 1991, in
Perambalur Sugar Mills Ltd Vs. State of Tamil
Nadu [1992] 86 STC 17, the correct position of
law within the State of Tamil Nadu was not free
from doubt. Even thereafter, the Sales Tax
Tribunal had in subsequent orders held that
transport subsidy was not includible in the taxable
turnover. Such a view was held by the Tribunal till
March 19, 1993. It appears that on bona-fide belief
that planting and transport subsidies were not
includible in the taxable turnover, the appellants
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had not included those amounts in their turnover
and for that reason non-inclusion of these two
items in the turnover do not seem to be intentional.
Though we have now held that the appellants were
not right in not including the amounts of planting
subsidy and transport subsidy in the taxable
turnover, considering the facts and circumstances
of the case, it would not be correct to say that they
had acted deliberately in defiance of law or that
their conduct was dishonest or they had acted in
conscious disregard of their obligation under th
Sales Tax Act. The Sales Tax Authorities were,
therefore, 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
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W.P.No.1045 of 2022 etc., batch
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 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
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W.P.No.1045 of 2022 etc., batch
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 was not a dealer. Granting that they
erred, no case for imposing penalty was made
out”.
9. For all the foregoing reasons, this Court is of the
affirmed view that the proposed levy of penalty is
unjustifiable and opposed to the proposition laid down
by the Hon'ble Apex Court in the aforesaid decisions.
Accordingly, the impugned notice in Notice
Ref.492/2006 dated 23.03.2006, is set aside.
Consequently, the Writ Petition stands allowed.
Connected Miscellaneous Petition is closed. No costs.
49. I am in agreement with the said view taken by the learned Judge
in the said case, i.e., M/s. National Asphalt Products and Construction
Company's case. Hence this Court has no hesitation to hold that, insofar as
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W.P.No.1045 of 2022 etc., batch
the imposition of penalty on the belated payment of entry tax of these
petitioners are concerned, such a penalty clause can be invoked by the
Revenue only after 29.01.2019 but not before that date.
50. After 29.01.2019 whenever these petitioners paid the tax, only for
the said period penalty can be imposed and even after 29.01.2019 till date, if
any of these petitioners have not paid the tax in full as demanded by the
respondent Revenue, it is open to the Revenue to invoke Section 15 and
impose the penalty as stated therein and such penalty can also be recovered
from such defaulted importer.
51. In view of all these discussions herein above made, this Court is
inclined to dispose of these writ petitions with the following orders :
(i) In all these writ petitions, since the liability of the
importers to pay the entry 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
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W.P.No.1045 of 2022 etc., batch
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 as to costs. Consequently,
connected miscellaneous petitions are closed.
15.07.2022
Index : Yes
Speaking order
tsvn
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W.P.No.1045 of 2022 etc., batch
To
1. The Secretary
Government of Tamil Nadu
Department of Commercial Taxes
Tamil Nadu Secretariat,
Chennai - 600 003.
2. The Commissioner of State Taxes
Chepauk, Chennai - 600 005.
3. The Assistant Commissioner (ST) (FAC)
K.K.Nagar Assessment Circle,
5th Floor,
PAPJM Annexe Building,
No.1, Greams Road,
Chennai - 600 006.
4. The Assistant Commissioner (ST)
Alwarpet Assessment Circle,
Taluk Office Building, R.A.Puram,
Chennai - 600 028.
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W.P.No.1045 of 2022 etc., batch
R.SURESH KUMAR, J.
tsvn
Common Order
in
W.P.Nos.1045 of 2022,
29130 of 2019, 28430 of 2019,
28435 of 2019, 28436 of 2019,
28438 of 2019, 28441 of 2019,
5097 of 2021, 5099 of 2021
15.07.2022
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