The Executive Officer Selection Grade Town Panchayat Vikramasingapuram Tirunelveli District v. The Joint Commissioner of Commercial Taxes & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.2.2008 CORAMTHE HONOURABLE MR.JUSTICE P.D.DINAKARAN ANDTHE HONOURABLE MR.JUSTICE R.REGUPATHIWrit Appeal No.1433 of 2004The Executive OfficerSelection Grade Town PanchayatVikramasingapuramTirunelveli District... Appellant/PetitionerVs.1. The Joint Commissioner of Commercial Taxes O/o. The Commissioner of Commercial Taxes Chepauk, Chennai-5.2. The Assistant Commercial Tax Officer Tirunelveli, Tirunelveli District.3. The Deputy Commercial Tax Officer Ambasamudiram Tirunelveli District... Respondents/RespondentsAppeal under Clause 15 of the Letters Patent against the order ofthis Court dated 26.2.2004 made in W.P.No.2895 of 2004 praying to issueWrit of Certiorarfied Mandamus to call for the records of the 1stRespondent in his R.No.JJ2/R-P/MV/31/00 and Na.Ka.No.m3/2012/2000 dated05.09.2003 and on the proceedings of the 3rd respondent and to quash thesame.For Appellant : Mr.P.S.Jaya KumarFor Respondents : Mr.Haja Nazirudeen, Spl.G.P.(T) https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T(Delivered by P.D.DINAKARAN,J.)The unsuccessful writ petitioner has preferred the above appealagainst the order of the learned single Judge dated 26.2.2004 made inW.P.No.2895 of 2004.2. The facts which paved way for filing of the above appeal, in anutshell, are as under.(a) The appellant purchased one Swaraj Mazda mini lorry from M/s.Swaraj Mazda Ltd., Chandigarh during the assessment year 1997-98 throughM/s. Natesan Auto Agency, Tirunelveli, a dealer of Swaraj Mazda Vehicle.The third respondent, by proceedings dated 29.10.1999 assessed Entry Taxfor the said vehicle amounting to Rs.56,105/- with penalty ofRs.1,12,210/-. Hence, the appellant preferred an appeal before thesecond respondent and the same was rejected on the ground that theappellant had not fulfilled the conditions for filing the appeal.Aggrieved by the same, the appellant preferred a revision petitionbefore the first respondent and the same was rejected confirming theorder of the appellate authority. Infuriated, the appellant haspreferred W.P.No.2895 of 2004. (b) The learned single Judge, by order dated 26.2.2004, dismissedthe writ petition observing that the learned counsel for the petitioner,without referring to a particular provision, had argued as a generalproposition that as and when any vehicle had been purchased by anyperson, all liabilities to make payment in respect of the tax would fallon the dealer who sold the vehicle and not on the petitioner. Hence,the present appeal.3.1. According to the learned counsel for the appellant, since theappellant had purchased the vehicle from one M/s. Natesan Auto Agency,Tirunelveli, who is a dealer of Swaraj Mazda Ltd., M/s. Natesan AutoAgency alone is responsible to pay the entry tax, but not the appellant.3.2. Alternatively, the learned counsel for the appellant contendsthat the appellant, being the local body, are exempted from the paymentof entry tax as per the Government letter No.269 dated 4.5.1990.4.1. On the other hand, learned Special Government Pleader contendsthat the Entry tax is liable to be paid by the importer as per Section 2(g) of the Tamil Nadu Tax on Entry of Goods Act, 2001. As per Section 3(2) of the Act, such tax on entry of any scheduled goods into any localarea for consumption shall be payable by the importer in accordance withthe provisions of the Act. https://hcservices.ecourts.gov.in/hcservices/

4.2. With regard to the alternative contention that the appellant,being the local body, are exempted from the payment of entry tax as perthe Government letter dated 4.5.1990, the learned Special GovernmentPleader contends that if that be so, the local body is at liberty toapproach the Assessing Officer for such exemption.5. We have given careful consideration to the submissions of bothsides.6.1. In order to appreciate the rival contentions of both theparties, we are constrained to refer the sections 2(g) and 3(2) of theAct, which read as under.Section 2(g):"importer" means a person who brings or causes to bebrought any scheduled goods whether on his own account oron account of a principal or any other person, into a localarea, from any place outside the State for consumption, useor sale therein or who owns the scheduled goods at the timeof entry into the local area."Section 3:Levy and collection of tax:- (1) Subject to the provisions of this Act, there shallbe levied and collected a tax on the entry of any scheduledgoods into any local area for consumption, use or saletherein. The rate of tax shall be at such rate notexceeding thirty per cent on the value of the scheduledgoods, as may be fixed by the Government, by notificationand different rates may be fixed for different scheduledgoods.(2) The tax shall be payable by an importer inaccordance with the provisions of this Act.6.2. A perusal of section 3 of the Act makes it clear that thedealer is not referred to for the purpose of payment of tax on the entryof any scheduled goods into any local area for consumption and thereshall be levy and collection of tax on the entry of the scheduled goodsinto any local area for consumption, use or sale therein. In otherwords, not necessarily the consumer alone be a importer, but a dealerwho sells the scheduled goods to the consumer is also an importer. Asper charging Section 3(2), the importer of the scheduled goods alone isresponsible to pay the tax on entry of any scheduled goods into anylocal area for consumption, use or sale therein. https://hcservices.ecourts.gov.in/hcservices/

6.3. As per Section 2(g) of the Act, where the importer is defined,an importer means a person who brings or causes to be brought anyscheduled goods whether on his own account or on account of a principalor any other person, into a local area, from any place outside the Statefor consumption, use or sale therein or who owns the scheduled goods atthe time of entry into the local area. 7. According to the respondents, the appellant is the importer whohad placed the orders before M/s. Natesan Auto Agency for the purchaseof mini lorry for their consumption and M/s. Natesan Auto Agency wasacting only as an agent of Swaraj Mazda Ltd. at Chandigarh and there isno evidence to show that M/s. Natesan Auto Agency had acted as a dealer.On the other hand, according to the appellant, the order was placedonly to M/s. Natesan Auto Agency, who is a dealer under Swaraj MazdaLtd., Chandigarh and not directly to the Swaraj Mazda Ltd., Chandigarhand M/s. Natesan Auto Agency alone supplied the vehicle to theappellant at Tirunelveli itself. 8. The above undisputed facts would go to show that the scheduledgoods, viz. the mini lorry was owned by M/s. Natesan Auto Agency at thetime of entry into the local area, might be either for consumption oruse or sale. Accordingly, M/s. Natesan Auto Agency alone sold thevehicle to the appellant. Therefore, as per the definition of importerunder section 2(g), the action should have been initiated not onlyagainst the appellant, but also against the importer who owned thescheduled goods at the time of entry into the local area, viz. M/s.Natesan Auto Agency. The Assessing Officer thus, having rightlyinitiated action, merely because M/s. Natesan Auto Agency had not raisedany objection, had chosen to proceed only against the appellant, whichvitiates the impugned demand of entry tax and penalty. 9. The order of the learned single Judge is, therefore, set aside.The writ appeal is allowed. The impugned demand of entry tax and thepenalty is set aside, with liberty to the respondents to proceed againstboth the appellant and M/s. Natesan Auto Agency. However, if theappellant is entitled to any exemption, based on any Government letter,they are at liberty to work out their rights, if they are so advised.Sd/Asst.Registrar/true copy/Sub Asst.Registrarkpl https://hcservices.ecourts.gov.in/hcservices/ To1. The Joint Commissioner of Commercial Taxes O/o. The Commissioner of Commercial Taxes Chepauk, Chennai-5.2. The Assistant Commercial Tax Officer Tirunelveli, Tirunelveli District.3. The Deputy Commercial Tax Officer Ambasamudiram Tirunelveli District.1 cc To Mr.P.S.Jayakumar, Advocate, SR.7130.1 cc To The Special Government Pleader (Taxes), SR.7225. W.A.No.1433 of 2004. SA(CO)RVL 10.03.2008