Madras High Court
M/S.Hyundai Motor India Limited vs M/S.Luthra Autowheels Private Limited on 30 April, 2021
Author: R.Subramanian
Bench: R.Subramanian
C.S.No.672 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 30.04.2021
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
C.S.No.672 of 2015
M/s.Hyundai Motor India Limited,
rep. By its Authorized Signatory,
Mr.M.Sagadevan, Assistang General
Manager – Legal & Secretarial,
South Regional Office at Hyundai Motor Plaza,
NP 54, Developed Plot,
Thiru-Vi-Ka Industrial Estate,
Ekkaduthangal, Guindy, Chennai – 600 032. ...Plaintiff
Vs.
1.M/s.Luthra Autowheels Private Limited,
Luthra Hyundai, Near Golf Club,
Chandak Circle, Tidke Colony,
Nashik – 422 022.
2.The Deputy Commissioner
(Commercial Taxes) – IV,
Large Tax Payer Unit,
Durga Tower, 5th Floor, Egmore,
Chennai – 600008. ...Defendants
Prayer: Plaint filed under Order IV Rule (1) of the Original Side rules r/w
Order VII Rule 1 and 2 of C.P.C., praying to direct the first defendant to
pay to the plaintiff the sum of Rs.3,27,20,402/- (Rupees three crores twenty
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C.S.No.672 of 2015
seven lakhs twenty thousand four hundred and two only), to pay to the
plaintiff an interest @ 18% of subsequent interest on Rs.3,27,20,402/-
(Rupees three crores twenty seven lakhs twenty thousand four hundred and
two only) from the date of plaint till the date of realization of the amount
and to pay costs of the suit.
For Plaintiff : Mr.A.R.Karunakaran
For Defendants : No Appearance
JUDGMENT
This suit has been filed for recovery of a sum of Rs.3,27,20,402/- being the excess tax amount paid by the plaintiff due to the failure of the defendant in furnishing 'C' forms.
2.The plaintiff is a leading car manufacturer and the 1st defendant was appointed as a dealer of the plaintiff. As per Section 8(1) of the Central Sales Act, the rate of sales tax / VAT for the Cars and their spare parts in the course of Inter-State Trade or Commerce in respect of sales made to registered dealers of other states is 2%. The said concessional rate of 2% is applicable to inter-state or commerce only if the selling dealer furnishes particulars of sale to the prescribed authority in a particular 2/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 manner in a particular form, which is generally called as 'C' form within the prescribed time. If the 'C' forms are not furnished within the prescribed time, the sales made even to a registered dealer will also be deemed as a sale made to an unregistered dealer or a Local Sales and the highest rate of tax will be imposed according to the Local Sales Tax Act, wherein the tax of the sale of cars / spare parts is 12.50% as against 2% under CST Act.
3.As per the memorandum of understanding dated 18.07.1996 and 22.01.2008 between the plaintiff and the Government of Tamil Nadu, the plaintiff was given a concessional rate of tax at 1% instead of 2%. Pursuant to the memorandum of understanding, the Government Orders have been issued in G.OMs.225 dated 29.09.1998 and G.O.Ms.No.101 dated 23.04.2008.
4.As per the Central Sales Tax Act and Rules, the purchasing delaer is obliged to obliged form 'C' from the local sales tax office and submit the same to the selling dealer to enable them to file the same to the local sales tax authorities within the stipulated time. The plaintiff would 3/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 claim that the 1st defendant, who was appointed as a dealer of the plaintiff under a letter of intent dated 24.03.1999 failed to furnish 'C' forms as required under the Act and therefore, the plaintiff was compelled to pay the suit claim as additional sales tax. The differential sales tax comes to Rs.3,27,20,402/-.
5.According to the plaintiff, the liability for payment of excess sales tax or arose due to the failure on the part of the 1st defendant to furnish 'C' forms with the stipulated time and therefore, the 1st defendant is liable to pay dues. On the strength of the above pleadings, the plaintiff had sought for a decree for recovery of the said sum of Rs.3,27,20,402/- along with interest at 18% per annum on the said sum from the date of plaint till date of realization.
6.Despite service, the defendants have not chosen to enter appearance to defend the suit. The plaintiff has let in evidence and one Mr.M.Sagadevan, Deputy General Manager (Legal & Secretarial) has examined as P.W.1. He has filed his proof affidavit and has also produced 4/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 Exs.P1 to P19. The evidence on record clearly demonstrates that the additional liability for a payment of sales tax arose solely on the ground of the failure of the 1st defendant to produce 'C' forms within the stipulated time. Therefore, the 1st defendant is liable to compensate the plaintiff for the additional tax paid by the plaintiff.
7.Hence, the suit is decreed as prayed for with costs.
30.04.2021 kkn Internet:Yes Index:No Speaking List of witness marked on the side of the plaintiff:
P.W.1 – M.Sagadevan List of documents marked on the side of the plaintiff:
S.No Exihibits. Documents marked
No
1 Ex.P1 The Original Authorization Letter (HMIL Resolution)
Mr.M.Sagadevan dated 30.06.2014.
2 Ex.P2 The Photo Copy letter of Intent issued by the plaintiff to the 1 st
defendant dated 24.03.1999.
3 Ex.P3 The Original Annual Return in Form No.1 for the Financial year
2006-2007 of the plaintiff with respect to Inter-State Sales.
5/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 S.No Exihibits. Documents marked No 4 Ex.P4 The Photo copy Annual Return Summary of Form No.10 for the
Financial Year 2006-2007 along with list of Invoice Numbers and value of sales made to the 1st defendant by the plaintiff for the financial year 2006 – 2007.
5 Ex.P5 The Original Annual Return in Form No.1 for the Financial year 2007-2008 of the plaintiff with respect to Inter-state sales. 6 Ex.P6 The Photo Copy Annual Return in Form No.10 for the Financial year 2007-2008 along with list of Invoice Numbers and value of sales made to the 1st Defendant by the plaintiff for the Financial year 2007-2008.
7 Ex.P7 The Original Letter with reference no.733823/2006-2007 sent by the Deputy Commissioner (CT), Enforcement (North) with respect to CST assessment for the financial year 2006-2007 dated 06.02.2014.
8 Ex.P8 The Original Letter with reference no.723823/2007-08 sent by the Deputy Commissioner (CT), Enforcement (North) with respect to CST assessment for the financial year 2007-08 dated 06.02.2014. 9 Ex.P9 The Original Reply filed by the plaintiff for the letter with reference no.723823/2006-07 dated 28.02.2014.
10 Ex.P10 The Original Reply filed by the plaintiff for the letter with reference no.723823/2007-08 dated 28.02.2014.
11 Ex.P11 The Original Order passed by the Deputy Commissioner (CT), Enforcement (North) for the financial year 2006-2007 for a demand of Rs.2,02,58,814/- dated 15.03.2014.
12 Ex.P12 The Original Order passed by the Deputy Commissioner (CT), Enforcement (North) for the financial year 2007-2008 for a demand of Rs.11,37,27,131/- dated 15.03.2014.
13 Ex.P13 The Original Plaintiff reply to Assessment Order dated 15.03.2014 Assessment Year 2006-2007 informing the payment plan under protest dated 09.04.2015.
14 Ex.P14 The Original Plaintiff Reply to Assessment Order dated 15.03.2014 Assessment Year 2007-08 informing the payment plan under protest dated 09.02.2015.
15 Ex.P15 The Photo Copy notice sent by the Deputy Commissioner (CT) IV
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S.No Exihibits. Documents marked
No
Large Taxpayer Unit for the demand Rs.22,95,11,731/- for the financial years of the 2006-07 to 2010-11 dated 16.04.2015. 16 Ex.P16 The Photo copy of the plaintiff letter to the Deputy Commissioner (CT) – IV, Large Taxpayer Unit for payment of the demand amount under protest dated 17.05.2014.
17 Ex.P17 The Original Plaintiff letter to the Deputy Commissioner (CT)-IV, Large Taxpayer Unit for payment of the demand amount for the financial year 2006-07 under protest dated 12.05.2014. 18 Ex.P18 The Original Plaintiff letter to the Deputy Commissioner (CT)-IV, Large Taxpayer Unit for payment of the demand amount for the financial year 2007-08 under protest dated 12.05.2014. 19 Ex.P19 The Original Legal Notice issued to the Defendants dated 06.08.2014.
List of witness and documents filed on the side of the defendants:
Nil 30.04.2021 kkn 7/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 R.SUBRAMANIAN, J.
KKN C.S.No.672 of 2015 8/9 https://www.mhc.tn.gov.in/judis/ C.S.No.672 of 2015 30.04.2021 9/9 https://www.mhc.tn.gov.in/judis/