M/S. Hari And Co vs. The Assistant Commissioner (St) (Fac)

Facts

M/s. Hari & Co. filed three writ petitions before the Madurai Bench of the Madras High Court challenging assessment orders passed by Assistant Commissioners of Commercial Taxes (ST) for the tax periods 2009-2010, 2010-2011, and 2011-2012. The petitioner sought to quash these orders, arguing they were unlawful, without jurisdiction, and barred by limitation under Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The petitioner also contended that the vehicles in question were not motor vehicles as defined under the Motor Vehicles Act, 1988. The respondent authorities issued the impugned orders under the aforementioned Act.

Held

The Court held that the challenge on the ground of limitation could not be sustained. It noted that the petitioner had previously challenged the levy of entry tax in a batch of writ petitions, which were dismissed by a Division Bench of the High Court on January 29, 2019, in light of the Supreme Court's decision in State of Kerala and others Vs. Fr. William Fernandez etc. etc. The Court observed that there was a stay in operation during the pendency of those earlier petitions, which effectively extended the period for assessment. The Court also dismissed the argument that the vehicle was not a motor vehicle, referencing the petitioner's earlier writ petition seeking registration of the vehicle. Finding that the petitioner had an alternate remedy under the Act, the Court dismissed the writ petitions. However, it granted liberty to the petitioner to file appeals before the appellate authority within 30 days of receiving the order, directing the appellate authority to decide the appeals on merits independently without being influenced by the observations in the present order.

Key Issues

1. Whether the assessment orders passed by the respondent authorities are barred by limitation as per Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990? 2. Whether the vehicles in question qualify as 'motor vehicles' under Section 2(28) of the Motor Vehicles Act, 1988, for the purpose of entry tax levy? Petitioner's Arguments: The petitioner contended that the impugned orders were passed beyond the statutory period of limitation prescribed under Section 8(5) of the Act. They relied on a Division Bench decision of the Madras High Court reported in (2010) 28 VST 356 (Mad) to support their claim of lack of jurisdiction and illegality. Furthermore, the petitioner argued that the vehicles were not motor vehicles, thus not subject to entry tax. Revenue's Arguments: The respondent authorities argued that the limitation period was extended due to a stay granted in previous writ petitions filed by the petitioner challenging the levy of entry tax. They cited the Supreme Court's decision in State of Kerala and others Vs. Fr. William Fernandez etc. etc. [2018 (57) GSTR 6X (SC) : 2017 SCC Online SC 1291] to counter the petitioner's challenge on the levy itself. They also pointed to the petitioner's prior action of seeking registration for the vehicle, implying it was indeed a motor vehicle.