Sonam Malik vs. U T Chandigarh

Held

The Court held that the petitioner is entitled to the benefit of the notification dated 24.11.2023, as the tax paid by them should be reduced to 50% on the basis of the Ex-showroom price, as clarified by the notification dated 21.10.2024. The Court reasoned that the circular/notification dated 21.10.2024, which explains the definition of Ex-showroom price mentioned in the notification dated 07.12.2023, would be effective from the date of the notification. Therefore, the petitioner would be entitled to the benefit of the tax paid. The Court noted that the amount already received by the Department in excess of 50% of the Ex-showroom price, as clarified, would have to be refunded. Since the tax amount was deposited by the petitioner only in June 2024, the Court did not grant any interest on the refund amount. The Court directed the respondents to refund the excess amount to the petitioner within one week. If the refund is not processed within this period, the petitioner would be entitled to interest at 9% per annum.

Facts

The petitioner filed a writ petition seeking a refund of 50% of the Motor Vehicle Tax collected, along with interest. This was based on a notification dated 24.11.2023, which allowed a 50% tax rebate for strong hybrid cars priced below ₹20 Lakhs (Ex-showroom). The respondents did not accept the petitioner's claim, stating that the Ex-showroom price included other amounts. The respondents later issued a clarification circular dated 07.12.2023, defining the Ex-showroom price as the sum total of the sale amount uploaded on the Homologation portal by the manufacturer, excluding GST and Compensation Cess, and any tax deducted at source or discounts offered by the dealer. The petitioner deposited the tax in June 2024.

Key Issues

1. Whether the petitioner is entitled to a refund of 50% of the Motor Vehicle Tax collected, based on the notification dated 24.11.2023, considering the definition of 'Ex-showroom price' as clarified by the respondents? Petitioner's arguments: The petitioner contended that they are entitled to the 50% tax rebate as per the notification dated 24.11.2023. They argued that the respondents' subsequent clarification on the definition of 'Ex-showroom price' should be applied prospectively from the date of the clarification, not retrospectively to the tax already paid. Respondents' arguments: The respondents argued that the definition of 'Ex-showroom price' provided in their circular dated 07.12.2023, and further clarified by the notification dated 21.10.2024, should be applied. They asserted that the tax paid by the petitioner needs to be re-evaluated based on this clarified definition, and any excess amount deposited is refundable.