M/S. Susee Automobiles(PVT). vs. The Commissioner Of

Facts

The petitioner, M/s. Susee Automobiles (Private) Limited, filed three writ petitions challenging a clarification dated 09.07.2002 issued by the Commissioner of Commercial Taxes, Tamil Nadu. The petitioner contended that Entry Tax should not be levied on motor vehicles purchased from outside the state for sale within Tamil Nadu, arguing that the tax liability arises only upon use or sale. The petitions were filed in August 2015, challenging a circular issued in July 2002. The respondents are the Commissioner of Commercial Taxes and the Assistant Commissioner(s) of Commercial Taxes. The Assistant Commissioner noted that the impugned circular has become infructuous with the introduction of the GST regime but acknowledged its relevance for assessments prior to July 1, 2017.

Held

The Court acknowledged that the petitioner's contentions had considerable force. However, it noted the significant delay in challenging the circular, which was issued in July 2002 and challenged in August 2015. While the Assistant Commissioner stated that the circular had become infructuous with the introduction of GST, the Court recognized its relevance for assessments conducted prior to July 1, 2017. The Court declined to examine the issue in the abstract, emphasizing that a challenge to the circular would lie if an assessee had suffered an order of assessment based on its application. Therefore, the Court left open the right of the assessee to question the validity of the impugned circular if they had been adversely affected by an assessment order passed in accordance with it. The writ petitions were consequently closed.

Key Issues

1. Whether the Entry Tax is payable on the purchase of motor vehicles from outside the state for the purpose of sale within Tamil Nadu, as mandated by the impugned circular dated 09.07.2002 issued by the Commissioner of Commercial Taxes, contrary to the provisions of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990? Petitioner's contentions: The petitioner argued that the Entry Tax is leviable only when a motor vehicle is used or sold within the local area, not on its mere purchase from outside the state for subsequent sale. They relied on certain case laws to support their claim. Revenue's contentions: The revenue's counsel did not explicitly argue on the merits of the circular's validity. However, the Assistant Commissioner stated that the circular has become infructuous due to the introduction of GST, though it remains relevant for pre-GST assessments. The court noted that no specific case demonstrating adverse impact on the assessee due to the circular was projected.