Madras High Court
V.Krishnamurthy vs The State Of Tamil Nadu on 29 January, 2019
Author: T.Sivagnanam
Bench: T.S.Sivagnanam, N.Sathish Kumar
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.01.2019
CORAM:
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
W.P.Nos.32710 of 2005,
10982,19035, 19933, 19934 of 2001
125, 31822, 41040 of 2002
10631, 29244, 30341, 31322 of 2003
1677, 10948, 17732, 5771, 5772, 5773, 7692, 12715,
13962, 14799, 15761, 23731, 24052, 25254, 30179 of 2004
198, 249, 577, 929, 9141, 9164, 10762, 12220, 13615,
13616, 13695, 14868, 14939, 18275, 19255, 20357,
21619, 22131, 22329, 25016, 26415, 27053, 30626,
34100, 37468, 39243, 40873 of 2005,
864, 1924, 2136, 2137, 2683, 2786, 5151, 5421, 5583,
5584, 5770, 6611, 6612, 6613, 6614, 7159, 7162, 7543,
9550, 13457, 18000, 18385, 22398, 22407, 24584,
24963, 27088, 31902, 46381, 42481, 46481 of 2006
1377, 3935, 6484, 13078, 13079, 19071, 19072, 19073,
19884, 22745, 24489, 26216, 26217, 26218, 26219, 27118,
27699, 27700, 27701, 29063, 29000, 29217, 29218, 29219,
31279, 31343, 31344, 31345, 31346, 33525, 33693, 33694,
36043, 36044, 36306, 36461, 36760, 37161, 37230 of 2007
1785, 1981, 1982, 4238, 8737, 11146, 11924, 11925, 12137,
12138, 12715, 14633, 15296, 15297, 15682, 15747, 16160,
16164 of 2008
5847 of 2010, 10126 of 2011, 16973,
29772 of 2012, 17843 of 2014
W.A.Nos.2192 of 2001, 1600, 1615 of 2006
http://www.judis.nic.in
and Connected Miscellaneous Petitions
2
W.P.No.32710 of 2005
V.Krishnamurthy ...Petitioner
-vs-
1.The State of Tamil Nadu,
Rep. by its Secretary to Government,
Fort St.George, Chennai -9.
2.The Commercial Tax Officer,
Mylapore Assessment Circle, Chennai.
3.The Regional Transport Officer,
South Chennai. .... Respondents
Writ Petition filed under Article 226 of the Constitution of India praying
for the issuance of a Writ of mandamus, directing the third respondent
to register the Car BMW 530D Limousine RHD of Titanium Silver Metallic
Colour with chassis No.WBANC72090 CR91052 Engine No.31106009 by
the petitioner without insisting upon payment of entry tax.
For Petitioners
Mr.M.Vinayagamurthy - W.P.No.46381 of 2006
Mr.Satish Parasaran
Senior Counsel - W.P.No.10982 of 2001
Mr.G.Ramadurai - W.P.No.19035 of 2001
Mr.S.Vishnu Mohan - W.P.No.19933, 19934 of 2001,
14939 of 2005
Mr.M.Sriram - W.P.No.125 of 2002
Mr.R.L.Ramani, - W.P.No.31822, 41040 of 2002,
Senior Counsel for 10631 of 2003, 5771, 5772, 5773,
Mr.B.Raveendran 24052 of 2004, 33525 of 2007
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Mr.C.Kathiravan - W.P.No.29244 of 2003, 1677, 7692,
15761 of 2004, 577, 9164, 14868,
18275, 9164, 22131, 22329 of 2005,
5770 of 2006
Mr.S.A.Rajan - W.P.No.30341 of 2003, 12715, 13962,
14799, 23731 of 2004, 12220,
19255 of 2005
Mr.Jacob George - W.P.No.31322 of 2003
Mr.S.Rajasekar - W.P.No.25254 of 2004, 5151 of 2006
Ms.Rajalakshmi - W.P.No.30179 of 2004, 198,
249 of 2005
Mr.A.Babu - W.P.No.929 of 2005
Mr.K.Hariharan - W.P.No.9141, 34100 of 2005,
10126 of 2011
Mr.R.Natesan - W.P.No.10762 of 2005
Mr.A.S.Chandrasekaran - W.P.No.13615,13616 of 2005
Mr.A.Ganesan - W.P.No.13695 of 2005
Mr.R.Vivekanandan - W.P.20357 of 2005
Ms.A.Ayesha Parveen - W.P.No.21619 of 2005
Mr.K.Govi Ganesan - W.P.No.25016 of 2005
Mr.R.Parthasarathy - W.P.No.26415 of 2005
Mr.B.Sathish Sundar - W.P.No.27053 of 2005, 2136, 2137,
5421, 5583, 5584, 27088,42481 of
2006, 13078, 13079, 19071 to 19073,
26216 to 26219, 27118, 27699, 27700,
27701, 29000, 29217 to 29219, 31343
to 31346, 33693, 33694, 37161, 37230
of 2007, 12137, 12138, 15296, 15297,
15747, 16164 of 2008
Mr.T.V.Lakshmanan - W.P.No.30626, 32710, 37468,
40873 of 2005, 864,13457, 22398,
22407, 24963, 31902 of 2006, 19884,
36760 of 2007
Mr.M.Md.Ibrahim Ali - W.P.No.39243 of 2005
Mr.Arul Murugan - W.P.No.1924, 7159, 7162 of 2006
Mr.K.S.Srinivas Rao - W.P.No.2683, 7543, 18385 of 2006,
31279 of 2007
Mr.T.V.Badrinarayanan - W.P.No.2786 of 2006
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Mr.P.Anbarasan - W.P.No.6611 to 6614, 9550 of 2006
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Mr.A.S.Baalaji - W.P.No.18000 of 2006, 8737,
15682 of 2008
Mr.N.Gopalakrishnan - W.P.No.24584 of 2006, 3935 of 2007,
1785, 4238 of 2008
Mr.K.Muruganandam - W.P.No.46481 of 2006
Mr.B.Raviraja - W.P.No.1377 of 2007
Mr.P.Rajkumar - W.P.No.6484 of 2007
Mr.S.P.Meenakshisundaram - W.P.No.22745, 29063,
36461 of 2007, 12715 of 2008
Mr.J.Naresh Kumar - W.P.No.24489 of 2007
Mr.S.Ramesh Kumar - W.P.No.36043, 36044 of 2007
Mr.A.M.Packianathan Easter - W.P.No.36306 of 2007
Mr.P.Sesadhri - W.P.No.1981, 1982 of 2008
Mr.R.Ramanlal - W.P.No.11146 of 2008
Mr.V.S.Sri Krishnan - W.P.No.11924, 11925, 16160 of 2008
Mr.V.Kalyanaraman - W.P.No.14633 of 2008
Mr.V.P.Mohammed Moin
for M/s.Aiyar an Dolia - W.P.No.5847 of 2010
Mr.N.Baaskaran - W.P.No.16973 of 2012
Mr.Hari Radhakrishnan - W.P.No.29772 of 2012
Mr.D.Rajendran - W.P.No.17843 of 2014
Mr.R.Rajaram - W.A.No.2192 of 2001
Mr.A.Babu - W.A.No.1600 of 2006
Mr.M.K.Murugantham - W.A.No.1615 of 2006
For Respondents
Mr.Mohammed Shaffiq,Special Govt.Pleader (Taxes)
Assisted by : Mr.V.Haribabu, Addl.Govt.Pleader
Mr.M.Hariharan, Addl.Govt.Pleader
Ms.DhanaMadhuri, Government Advocate
COMMON ORDER
[Order of the Court was delivered by T.SIVAGNANAM,J.] In all these cases, the question involved is whether the respondents are entitled to impose Entry Tax on vehicles, which were imported by the petitioners from out side the country. http://www.judis.nic.in 5
2. W.P.No.32710 of 2005 is taken as the lead case with the consent of the learned counsels on either side and we refer to the facts of the said case.
3. Before we venture to do so, we may point out that in none of these writ petitions, the petitioners have challenged the validity of the provisions of Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 (Tamil Nadu Act No.XIII of 1990) (for brevity "the Tamil Nadu Act"). Though the prayers sought for in the various writ petitions involved in this batch may be variant to each other, the sum and substance of the relief sought for from this Court is to forbear the respondents from imposing Entry Tax on the vehicles imported by the petitioners from outside the country.
4. Mr.V.Krishnamurthy, Proprietor of Aviation Express, the petitioner in W.P.No.32710 of 2005 had purchased a Car viz., BMW 530D Limousine RHD of Titanium Silver Metallic Colour and filed Bill of Entry dated 04.09.2005. The petitioner would state that while importing goods into India, he had paid customs duty, anti-dumping duty and countervailing duty.
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5. It is the contention of the petitioner that since the imported vehicles suffer border tolls such as customs and other duties, Sales Tax and Entry Tax are not leviable. In this regard, the petitioner would refer to Statements of Objects and Reasons of the Tamil Nadu Act as it states that in order to curb evasion of sales tax on the sale of motor vehicles which are purchased outside the State and brought into the State, the Government have decided to levy tax on entry of Motor Vehicles into local areas of the State either for use or for sale therein, which is liable for registration in the State under the Motor Vehicles Act, 1988.
6. Mr.T.V.Lakshmanan, learned counsel appearing for the petitioner would submit that the legislation is only to prevent evasion of Sales Tax in the State of Tamil Nadu by purchasing vehicles from neighbouring State and not against imported vehicles, which are not liable to Sales Tax. Further, it is submitted that a plain reading of the provisions of the Act will clearly show that the Act does not purport to levy entry tax on imported Motor Vehicles as it is aimed only at the goods brought in from other States within the territory of India. http://www.judis.nic.in 7
7. Further, it is contended that the provisions of the Act have to be interpreted in the light of the Statements of Objects and Reasons appended to the Bill and if it is done so, it is clear that the enactment does not intend to levy entry tax on imported vehicles. In other words, it is submitted that the Tamil Nadu Act intended to prevent evasion of tax and not for the purpose of augmenting revenue and therefore, the enactment cannot be made applicable to levy entry tax on imported vehicles.
8. The learned counsel referred to Section 3 of the Tamil Nadu Act which deals with Levy of Tax, Section 4 of the Tamil Nadu Act which speaks about Reduction in tax liability and Section 12 which deals with Exemptions.
9. It is submitted that Section 4 speaks of two types of importers; sub-section (1) deals with an importer, who is a dealer importing motor vehicles, becomes liable to pay tax under the General Sales Tax Act and Additional Sales Tax by virtue of the sale of such motor vehicle, then his liability under those Acts shall be reduced to the extent of tax paid under the Tamil Nadu Act. Sub-Section (2) deals with the case where http://www.judis.nic.in 8 the importer is not a dealer and he is also given such a reduction of liability to the extent of the amount paid.
10. Therefore, it is the submission of the learned counsel that Section 4 of the Tamil Nadu Act has to be read into the Charging Section viz., Section 3 and if it is done so, it will be evidently clear that the Tamil Nadu Act intended to prevent evasion and the Tamil Nadu Act does not intend to augment the Revenue and this is a marked difference between the Entry Tax Act enacted in the State of Tamil Nadu when compared to the Entry Tax Act enacted by the other States in the country.
11. To buttress the submissions, the learned counsel referred to Statement of Objects and Reasons of the Tamil Nadu Act, which speaks of only prevention of evasion of tax and not for augmenting the Revenue. Developing his arguments further, the learned counsel submitted that it is very important to know as to how the statute has to be read and how the interpretation is required to be made. In this regard, the learned counsel drew support from the book authored by G.P.Singh, XII Edition, 2010 on Principles of Statutory Interpretation. It is submitted that to arrive at the true meaning of a particular phrase in http://www.judis.nic.in 9 the statute that particular phrase is not to be viewed detached from the context - meaning by this as well as the title and the preamble as the purview or enacting part of the statute.
12. Further, it is submitted that where the enacting part of a statute is clear and unambiguous, it cannot be controlled by the preamble, which cannot be read. Proceeding further, the learned counsel referred to chapter VI of the said book which dealt with Appraisal of the Principle of Plain Meaning and submitted that as explained, the rule in reality means that after you have construed the words and have come to the conclusion that they can bear only one meaning, duty is to give effect to that meaning.
13. Further, the learned counsel relied on the observations made in the said book to the effect that plain meaning rule applies at the stage when the words have been construed in their context and the conclusion is reached that they are susceptible to only one meaning and in that event, the meaning so derived is to be given effect to irrespective of consequences for no alternative construction is really open. Therefore, it is the submission of Mr.T.V.Lakshmanan that the plain reading itself requires a contextual reading. http://www.judis.nic.in 10
14. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Controller of Estate Duty, Gujarat Vs. Shri Kantilal Trikamlal [reported in (1976) 4 SCC 643]. This decision was relied on to support his argument that the same word when it occurs in different statute would have a different meaning. In the said decision, the word which was the subject matter of interpretation was of “disposition” as to its meaning under the provisions therein under the provisions of the Gift Tax Act, 1958 and under the provisions of the Estate Duty Act, 1953.
15. In this regard, the learned counsel referred to the following observations made by the Hon'ble Supreme Court in paragraphs 11,15,20,21 & 22:-
" 11. Now to the boxing ring. The bout has been fought over the import and amplitude of 'property' as widened by s. 2(15), especially Explanation 2 thereto. Sri S. T. Desai, appearing for the accountable person in the Madras case, and Shri Manchanda, arguing for the Exchequer in the Gujarat case, have levelled multi-pointed attacks, but the crucial issue which is decisive of both cases is the same. What is 'property' for the purpose of this fiscal law ?
15. This 7-point programme of submission really brings out all the issues and sub-issues, legal and factual, and the last two, over-lapping in some respects, deserve first attention. Before that, we must state, in precis form, the facts with reference to which the statute must speak. The life of the law is not idle abstraction or transcendental meditation but fitment to concrete facts to yield jural results--a synergetic action, not http://www.judis.nic.in isolated operation. Our discussion will therefore be conditioned 11 by the material facts found in the two cases. They are, tersely, though simplistically put, that the deceased person, being a member of a joint Hindu family, within two years before his death, entered into a partition of family properties bona fide, not as colourable or sham transaction, whereby he received towards his share an allotment substantially lower in value than would be his legal entitlement thus gladly suffering a diminution which would to that extent benefit the account- able person by giving him a larger slice of the joint cake than was his due.
20. Before we enter the thicket of judicial conflict regarding the meaning of 'property' as extended by Explanation 2 to s. 2(15), we may remind ourselves as courts that in a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. While the rulings on the point in the Act and in the allied Gift Tax Act will be adverted to presently, we may begin an incisive understanding of the Explanation 2 aforesaid. The spirit thereof is obvious. The framers of the Act desired by a deeming provision regarding 'disposition' to cover extinguishments of debts and all other rights at the expense of and made by the deceased in favour of the beneficiary. The substantive definition of 'property' in s. 2(15) is not exhaustive but only inclusive and the supplementary operation of Explana- tion 2 takes in what is not conventionally regarded as 'disposition'. Indeed, 'disposition', even according to law dictionaries, embraces 'the parting with, alienation of, or giving up property...a destruction of property' (Black's Legal Dictionary). The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener, can be called 'disposition' in law. Undoubtedly this operation, to use a neutral expression, is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains. This legal result, produced by voluntary 'action, is 'disposition' within the scope of Explanation 2 to s. 2(15).
21. The assessee's contention, effectively presented by counsel, takes a legalistic course, ignoring the purpose, language and amplitude of Explanation 2. Argues Shri Desai, in a partition, equal or unequal, there is no element whatsoever of consideration, partial or full, since in a partition there is only an adjustment of rights and substitution of joint enjoyment by enjoyment in severalty. In his view it is a confusion to mix up unequal partition with inadequate consideration and it is a worse confusion to talk in terms of http://www.judis.nic.in bona fide and main fide partition where the shares are merely 12 unequal by choice. What is forgotten in this chain of reasoning is the office of Explanation 2 which-is deliberately designed to take into its embrace what otherwise may not be 'disposition'. Once we reconcile ourselves to the enlargement of sense imported by the Explanation, we part company with the traditional concept. We have also to stress the expression 'other right' in the Explanation which is of the widest import and cannot be constricted by reading it ejusdem generis and 'debt'. 'Other right', in the context, is expressly meant considerably to widen the concept and therefore suggests a somewhat contrary intention to the application of the ejusdem generis rule. We may derive instruction from Green's construction of the identical expression in the English Act Is. 45(2). The learned author writes:
"A disclaimer is an extinguishment of a right for this purpose. Although in the event the person disclaiming never has any right in the property, he has the right to obtain it, this inchoate right is a 'right' for the purposes of s. 45(2), The ejusdem generis rule does not apply to the words 'a debt or other right' and the word 'right' is a word of the widest import. Moreover, the expression 'at the expense of the deceased' is used in an ordinary and natural manner; and is apt to cover not only cases where the extinguishment involves a loss to the deceased of a benefit he already enjoyed, but also those where it prevents him from acquiring the benefit.
The words 'the person for whose benefit the debt or other right was extinguished' do not necessitate a conscious intention to benefit some per- son; it is sufficient that some person was in fact benefited. 'The motive or purpose of the deceased appears to me to be immaterial', provided the transaction was gratuitous and did in fact benefit the other person concerned.
The extinguishment of a right may also cover the release of his interest by one joint tenant in favour of another." (Green's Death Duties, 7th Ed., Butterworths, p.149)
22. Shri Desai and also Shri Kazi, appearing for the 'ac- counting persons' in the respective cases,urged that this expansive interpretation taking liberties with traditional jural concepts is contrary to this Court's pronouncement in Getti Chettiar(1). That was a case under the Gift Tax Act, 1958 and the construction of s. 2(xxiv) fell for decision. Certainly, many of the observations there, read de hors the particular statute, might reinforce the assessee's stand. This Court interpreted the expression 'transfer of property' in s. 2(xxiv) and held that the expression 'disposition' used in that provision should be read in the (1) [1971] 82 I.T.R. 599. context and setting of the given statute. The very fact that 'disposition' is treated as a mode of transfer takes the legal concept along a different street, if one may use such a phrase, from the one along which that word in the Estate Duty Act is travelling. Mr. Justice Hegde rightly observed, if wemay say so with respect, that http://www.judis.nic.in 'Words in the section of a statute are not to be interpreted by 13 having those words in one hand and the dictionary in the other. In spelling out the meaning of the words in a section, one must take into consideration the setting in which those terms are used and the purpose that they are in- tended to serve." (p. 605-606) The word 'transaction' in s. 2(xxiv) of the Gift Tax Act takes its The word that is it must be a 'transfer' of property colour from the main clause that is , it must be a 'transfer' of property in some way. Since a partition is not a 'transfer' in the ordinary sence of law, the Court reached the conclusion that a mere partition with unequal allotments not being a transfer, cannot be covered by s. 2(xxiv). A close reading of that provision and the judgment will dissolve the mist ofmisunderstanding and discloses the danger of reading observations from that case for application in the instant case. The language of s. 2 (15 ), Explanation 2, is different and wider and the reasoning of Getti Chettiar (supra) cannot there- fore control its amplitude. It is perfectly true that in ordinary Hindu law a partition involves no conveyance and no question of transfer arises when all that happens is a severance in status and the common holding of property by the coparcener is converted into separate title of each coparcener_as tenant-in-common. Nor does subsequent partition by metes and bounds amount to a transfer. The controlling distinction consists in 'the difference in definition between the Gift Tax Act [s. 2(xxvi)] and the Estate Duty Act is. 2(15)."
16. It is the submission of the learned counsel that in a taxing statute one has to look merely as to what is clearly said and there is no room for intendment.
17. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Commissioner of Income Tax, Bangalore Vs. J.H.Gotla, Yadagiri [(1985) 4 SCC 343] to support the argument that while interpreting the provisions of the Act, the object of the Act is to be kept in mind.
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18. Nextly, the learned counsel relied on the decision of the Hon'ble Supreme Court in the case of Oxford University Press Vs. Commissioner of Income Tax, [(2001) 3 SCC 359] and submitted that the Court must always seek to find out the intention of the Legislature and the intention of the statute from the language used. Further, by relying on the observations made in the said decision, it is submitted that in a taxing statute where literal interpretation leads to a result not intended to sub serve the object of the legislation another construction in consonance with the object should be adopted. Therefore, it is his submission that literal interpretation has to be eschewed. The object of the enactment has to be seen and the object being one for prevention of evasion of tax and not for augmentation of revenue, the same cannot be applicable for levy of entry tax on imported motor vehicles.
19. The learned counsel referred to the decision of 9 Judges Bench of the Hon'ble Supreme Court in the case of Jindal Stainless Steel Vs. The State of Haryana [reported in (2017) 12 SCC) Page 1] and referred to paragraph 77 of the judgment of Hon'ble Dr.T.S.Thakur, Chief Justice of India, wherein it was held that an http://www.judis.nic.in 15 interpretation which is both textual and contextual has always been found to be more acceptable and this is so because it is only when both the text and context are kept in view that the statutory provisions can be best understood. On the above submissions, the learned counsel would contend that the levy of entry tax on imported motor vehicles is not sustainable in Law.
20. Mr.Mohammd Shaffiq, learned Special Government Pleader, appearing for the respondents contended that the issue raised in all these writ petitions namely as to whether the State can levy and collect entry tax on imported vehicles and more particularly, the arguments advanced by the learned counsel for the petitioners was considered by the Hon'ble Supreme Court in the case of State of Kerala and others Vs. Fr.William Fernandez and others [reported in MANU/SC/1343/2017]. It is submitted that in the said decision, the Hon'ble Supreme Court held that entry tax can be levied on goods entering the land mass of India from another Country on examining the provisions of the enactments, enacted by the State of Orissa, Bihar, Kerala and Jharkand. It is submitted that the provisions of the Kerala Act is in pari materia with the provisions of Tamil Nadu Entry Tax Act and the decision of the Hon'ble Supreme Court covers all these cases http://www.judis.nic.in 16 and the Court may apply the said decision and dispose of the cases in terms of the said decision.
21. In this regard, the learned Special Government Pleader referred to various paragraphs of the judgment to substantiate his contentions that the decision in the case of Fr.William Fernandez squarely covers all these cases. It is submitted that the Hon'ble Supreme Court in the case of Fr.William Fernandez has considered the plain and literal construction of the Charging Section in the Kerala Act namely Section 3 r/w Section 2(d) which defines entry of goods and held that the goods entering into local area from any place outside the local area or outside the State are to be charged with entry tax. Further, it has been held that Foreign Territory would be a place which is not only outside the local area but also outside the State. Further, the Special Government Pleader submits that the Hon'ble Supreme Court observed that it is well known rule of statutory interpretation that by process of interpretation the provisions cannot be rewritten nor any word can be introduced. Therefore, it is submitted that the question of applying external aids by way of referring to objects and reasons does not arise and even if it is done so, the object of enactment is clear and that the levy of entry tax is legally valid.
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22. The learned Special Government Pleader referred to the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, Orissa and Others Vs. M/s.N.C.Budharaja and Company, [1994 Supp (1) SCC 280], wherein, it has been held that it would not be reasonable or permissible for the Court to rewrite the Section or substitute words of its own for the actual words employed by the legislature in the name of giving effect to the supposed underlying object.
23. Reliance was placed on the decision in the case of Gurudevdatta VKSSS Maryadit and another Vs. State of Maharashtra and others, [(2001) 4 SCC 534] and the decision in the case of Mathuram Agrawal Vs. State of Madhya Pradesh , [(1999) 8 SCC 667] in support of the said arguments. Thus, it is the submission of the learned Special Government Pleader that the Charging Section is clear as held by the Hon'ble Supreme Court in the case of Fr.William Fernandez and the preamble of the Act is also clear and prayed that the levy of entry tax on imported vehicles be sustained.
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24. The submissions of Mr.T.V.Lakshmanan was adopted by Mr.P.Rajkumar and certain other counsels who had filed similar writ petitions.
25. We have elaborately heard the learned counsels for the parties and carefully perused materials placed on record.
26. As indicated by us in the opening paragraph of this order, in none of the writ petitions, there is a challenge to the Constitutional validity of the provisions of the Tamil Nadu Act.
27. The learned counsels for the petitioners in one voice submitted that none of them are challenging the Constitutional validity or in other words the vires of the Act. As indicated, there may be a variance in the prayer in the batch of writ petitions but the sum and substance of the relief sought for is to forbear the respondents from levy of Entry Tax on vehicles imported by the petitioners. The petitioners are either individual, companies registered under the Companies Act and partnership firms etc.., http://www.judis.nic.in 19
28. The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 was an act to provide for the levy of tax on the entry of the motor vehicles into local areas for the use of sale therein. This Act was in replacement of an Ordinance No.1 of 1990 promulgated by the Governor on 19.02.1990 and published in the Gazette on 20.02.1990 and deemed to have come into force from 20.02.1990.
29.The Statement of Objects and Reasons attached to the Bill introduced in the Legislative Assembly in respect of the said Act was with a view to curb the evasion of sales tax on the sale of motor vehicles which are purchased outside the State and brought into this State, the Government have decided to levy tax on entry of motor vehicles into local areas of this State either for use or sale therein which is liable for registration in the State under the Motor Vehicles Act, 1988. It was also decided not to levy tax in respect of vehicles registered in Union Territory or in other States 15 months prior to registration in the State and necessary provision has been provided for. In the case of dealers, entry tax must be levied on entry of motor vehicles and the tax paid by them shall be adjusted with the tax payable by them under the Tamil Nadu General Sales Tax Act, 1959.
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30. Section 2(d) of the Act viz., “Entry of Motor Vehicles into a local area” to mean with all its grammatical variations and cognate expressions, means entry of motor vehicle into a local area from any place outside the State for use or sale therein. The definition is a clear indicator to show that the charging Section of the Act namely Section 3 would apply at the stage when the vehicle enters into a local area. In other words, the taxable event is the entry of the vehicle in a local area and not purchasing in other State or Union Territory. This view is supported by the decision of the Hon'ble Supreme Court in the case of Bhagatram Rajiv Kumar Vs. Commissioner of Sales Tax, Madhya Pradesh and Others [reported in (1995) 96 STC 654]. The Commissioner of Commercial Taxes had issued a circular No.9 dated 09.02.1996 to the effect that import of vehicles from outside also amounts to an entry into local area.
31. Section 2(g) defines “importer” to mean a person who brings a motor vehicle into a local area from any place outside the State for use or sale therein; and who owns the vehicle at the time of its entry into the local area. Section 2(h) defines “local area” to mean within the limits of the city of Madras as defined in the Madras City Municipal http://www.judis.nic.in 21 Corporation Act, 1919 and likewise other States and towns in terms of the enactment which covers those cities and towns. Motor vehicle has been defined under Section 2(i) to mean a motor vehicle as defined in clause (28) of Section 2 of the Motor Vehicles Act, 1988. Section 2(l) defines “State” to mean the State of Tamil Nadu. Section 2(m) states that words and expressions used but not defined in the Act shall have the meaning assigned to them under the General Sales Tax Act.
32. Section 3 is the Charging Section which falls in Chapter II of the Act which deals with “Levy of tax”. Sub-Section (1) of Section 3 states that subject to the provisions of Act there shall be levied and collected tax on entry of any motor vehicle into any local area for use or sale therein which is liable for registration, or for the assignment of a new registration mark, in the State of Tamil Nadu under the Motor Vehicles Act, 1988. The rate of tax shall be at such rate or rates not exceeding 20% as may be fixed by the Government, by notification on the purchase value of the motor vehicles.
33. The proviso under Section 3(1) provides that in respect of any motor vehicle which was registered in any Union Territory or any other State under the law relating to motor vehicle before 10th September, http://www.judis.nic.in 22 1996, no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of a new registration mark in the State of Tamil Nadu after a period of 15 months from the date of its registration. In cases arising on or after 10th September, 1996, no tax shall be levied and collected, if the owner of such vehicle applies for assignment of a new registration mark in the State of Tamil Nadu after a period of 18 months from the date of its registration. Explanation to the proviso states that for the purpose of proviso, the expression 'law relating to motor vehicle' means the Motor Vehicles Act, 1939 or the Motor Vehicles Act, 1988 as the case may be. Sub-Section 2 of Section 3 states that the tax shall be payable by an importer in such manner and within such time as may be prescribed.
34. We have noted the definition of "importer" as defined under Section 2(g) of the Act to mean a person who brings motor vehicle into a local area from any place from outside the State for use or sale therein; and who owns the vehicle at the time of its entry into the local area. What is interesting to note is that the proviso under Section 3(1) gives a benefit in respect of motor vehicles which was registered in any Union Territory or any other State under the Law relating to motor vehicle and under the said category two classes of vehicles have been http://www.judis.nic.in 23 considered that is those registered prior to 10th September, 1996, or registered after 10th September, 1996. It is further interesting to note that in respect of the tax payable by the importer, there is no such distinction drawn in the statute and the window which has been given under the proviso is restricted to the vehicles which was registered in Union Territory or other State either before 10.09.1996 or after 10.09.1996.
35. Section 4 of the Act deals with “reduction in tax liability”. Sub- Section (1) of Section 4 states that where an importer of a motor vehicle liable to pay tax under the Act is a dealer in motor vehicles, becomes liable to pay tax under the Tamil Nadu General Sales Tax Act and additional sales tax under the Tamil Nadu Additional General Sales Tax ACt by virtue of the sale of such motor vehicle, then his liability under those Acts shall be reduced to the extent of entry tax paid by him. Sub-Section (2) deals with cases where an importer is not a dealer and he has also given a benefit by reduction of the liability under the Entry Tax Act to the extent of the amount paid, if any, under the law relating to the General Sales Tax as may be in force in that Union Territory or State.
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36. Section 8 of the Act deals with the “Assessment Procedure”; Section 9 deals with the “reassessment”; Section 10 deals with the “Payment of Tax” and Section 12 deals with the “Exemptions”.
37. Section 12 states that subject to such conditions as it may impose, the Government may, if it is necessary so to do in the public interest, by notification, exempt any specified class of importers from the payment of whole or part of the tax payable under the Entry Tax Act. Section 13 deals with the “Appeals”. Section 14 deals with the “Power of Revision”, Section 15 deals with “imposition of penalty”, Section 15-A gives power for “Impounding of motor vehicle” and Chapter VII deals with the “miscellaneous” provisions namely Sections 16 to 20.
38. The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Rules, 1990 [for brevity 'the Rules'] was issued in exercise of the powers conferred under Sub-section (1) and (2) of Section 18 of the Tamail Nadu Tax on Entry of Motor Vehicles into Local Areas Ordinance, 1990 and it came into force on 20th February, 1990. Chapter II of the Rules deals with “Returns, Assessment, Payment of tax and Refund”, Chapter III of the Rules deals with the “Accounts”, Chapter IV of the http://www.judis.nic.in 25 Rules deals with “Power to get Information”, Chapter V of the Rules deals with the “Appeals and Revision” and Chapter VI of the Rules deals with the “Service of orders and notices”.
39. Appendix to the Rules gives the statutory forms for return- cum-challan of tax payable by an Importer under the Tamil Nadu Tax on entry of Motor Vehicles into Local Areas Ordinance, 1990 (Tamil Nadu Ordinance 1 of 1990).
40. It is the submission of the learned Special Government Pleader that the Kerala Tax on Entry of Goods into Local Areas Act, 1994 (for short "1994 Act") is pari materia with the Tamil Nadu Act. The said enactment has been upheld by the Hon'ble Supreme Court and it has been held that the State of Kerala is entitled to levy Entry Tax on the imported vehicles.
41. It is the submission of the learned counsel for the petitioners that the enactment is not pari materia in the sense that the Tamil Nadu Entry Tax Act has been enacted to curb evasion and it is not for augmentation of revenue and the scheme of the Act is entirely different from that of the 1994 Act.
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42. If we agree with the submissions of the learned Special Government Pleader that both enactments are in pari materia, the Statements of Object and Reasons are identical, then we will have to apply the decision of the Hon'ble Supreme Court in Fr.William Fernandez. If that is done, all other contentions raised by the petitioner stands foreclosed and the curtain will have to be drawn. In the event, we do not agree with the submissions of the learned Special Government Pleader, we may be required to examine the contentions advanced by the learned counsel for the petitioners, how the terms occurring in Section 3 and Section 4 to be interpreted; What is the contextual reading that has to be done; to examine whether Section 4 to be read into the Charging Section namely Section 3 and if that is done so, it is undoubtedly an enactment for a different purpose than what was enacted by the Kerala State. Therefore, first we take up for consideration as regards the argument relating to pari materia between the two statutes and the applicability of the decision in Fr.William Fernandez.
43. The Statements of Object and Reasons of the 1994 Act has been fully extracted in the decision of the High Court of Kerala in the http://www.judis.nic.in 27 case of Fr.William Fernandez Vs. State of Haryana [reported in (1999) Volume 115 STC 591]. This decision of the Kerala High Court has been reversed by the Hon'ble Supreme Court in MANU/SC/1343/2017. However, we have referred to this decision of the Hon'ble Division Bench for the purposes of noting the statement of objects and reasons of the Kerala Enactment which reads as follows:-
"The State is a loser of sales tax on motor vehicles which are purchased from outside the State and brought into the State. In order to curb the evasion of sales tax on motor vehicles purchased from outside the State and brought into the State, Government have decided to levy a tax on entry of such motor vehicles into the State, either for use or sale, which are liable for registration in the State under the Motor Vehicles Act, 1988 (Central Act 59 of 1988)"
44. Now, we turn to the objects and reasons of the Tamil Nadu Act which is as follows:-
“In order to curb the evasion of sales tax on the sale of motor vehicles which are purchased outside the State and brought into this State, the Government have decided to levy tax on entry of motor vehicles into local areas of this State either for use or sale therein which is liable for registration in the State under the Motor Vehicles Act, 1988 (Central Act LIX of 1988). It has also been decided not to levy the tax in respect of vehicles registered in the Union Territory or in other States fifteen months prior to registration in the State and necessary provision has been provided for. In the case of dealers, entry tax shall be http://www.judis.nic.in 28 leviable on the entry of motor vehicles and the tax paid by them shall be adjusted with the tax payable by them under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act No. 1 of 1959).”
45. On a reading of both the statement of objects and reasons, it is evidently clear that both the enactments have been enacted for a common purpose that is to curb evasion of sales tax on motor vehicles purchased from outside the State and brought into the State for use or sale therein, which are liable for registration under the Motor Vehicles Act, 1988.
46. Thus, we are satisfied that the object of enacting the statute by respective Legislative Assemblies of both the States are identical. The argument of the petitioners is that the scheme and spirit of the Act needs to be understood first, for every social legislation has a personality and taxing statute a fiscal philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained.
47. It is the further submission of the learned counsel for the petitioners that in a taxing statute one has to look merely at what is clearly stated and there is no room for intendment and a contextual http://www.judis.nic.in 29 reading is required to be given because a common word appearing in two different statutes will not have the same meaning. In this regard, reliance was placed on the decision in the case of Kantilal Trikamlal as well as in the case of Oxford University Press. The question would be as to what extent we have to rely upon the objects and reasons of an enactment to understand the real intent of the enactment. In other words, it has to be seen under what circumstances, the Statement of Objects and Reasons need to be looked into.
48. In this regard, it will be beneficial to refer to the decision of the Hon'ble Supreme Court in the case of Gurudevdatta VKSSS Maryadit (supra). The Hon'ble Supreme Court held that the Statements of Objects and Reasons needs to be looked into, though not by itself a necessary aid, as an aid to construction only if necessary. It was further held that to assess the intent of the Legislature, in the event of there being any confusion, the Statement of Objects and Reasons may be looked into and no exception can be taken therefor - this is not an indispensable requirement but when faced with an imperative need to appreciate the proper intent of the legislature, statement may be looked into but not otherwise. http://www.judis.nic.in 30
49. In Mathuram Agarwal (Supra), the Hon'ble Supreme Court was considering the interpretation of Section 127-A of the Madhya Pradesh Municipalities Act, 1961 which deals with imposition of property tax. While answering the question as to how the proviso to Sub-Section 127A(2)(b) of the said Act should be construed, it was pointed out that it is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain and unambiguous language of the statute. It is further held that words cannot be added to or substituted so as to give a meaning of the statute which will serve the spirit and intention of the Legislature. The statute should clearly and unambiguously convey the three components of the tax law namely the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. It was pointed out that if there is any ambiguity regarding any of these ingredients in a taxation statute, then there is no tax in law. Then it is for the legislature to do the needful in the matter.
50. To be noted that in the preceding paragraphs, we have held that the statement of objects and reasons of both the enactments are one and the same.
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51. We further note that the Charging Section under the 1994 Kerala Act is Section 3 which reads as follows:-
"Section 3 - Levy of Tax Substituted by Act 23 of 1996 w.e.f. 29.7.1996. (1) Subject to the provisions of this Act tax shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein. (Inserted by Act 10 of 2005). The Tax on such goods shall be at such rate or rates as may be fixed by Government by notification, on the purchase value of goods not exceeding the tax payable for the goods as per the (Substituted by Act 23 of 1996 w.e.f. 29.7.1996) [Schedule to the Kerala General Sales Tax Act, 1963 or the Kerala Value Added Tax Act, 2003.
Provided that no tax shall be levied and collected in respect of any motor vehicle which was registered in any Union Territory or any other State under the provisions of Motor Vehicles Act, 1988 (Central Act, 59 of 1988), prior to a period of fifteen months or more from the date on which it is registered in the State:
Provided further that no tax shall be levied and collected in respect of any (Substituted by Act 23 of 1996 w.e.f. 29.7.1996) goods which is the property of the Central Government or which is used exclusively for purposes relating to the defence of India.
(2) The tax shall be payable by the importer in such manner and within such time as may be prescribed."
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52. The Charging Section viz., Section 3 in the Tamil Nadu Act is as follows:-
"3. Levy of tax. - (1) Subject to the provisions of this Act, there shall be levied and collected a tax on the entry of any motor vehicles into any local area for use or sale therein which is liable for registration, or for the assignment of a new registration mark, in the State under the Motor Vehicles Act, 1988 (Central Act No.59 of 1988). The rate of tax shall be at such rate or rates, not exceeding twenty per cent, as may be fixed by the Government, by notification, on the purchase value of the motor vehicles:
Provided that in respect of any motor vehicle which was registered in any Union Territory or any other State under the law relating to motor vehicle:-
(a) before the 10th September, 1996, no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of a new registration mark in this State after a period of fifteen months from th date of its registration;
(b) on or after 10th September, 1996, no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of a new registration mark in this State after a period of eighteen months from the date of its registration.
Explanation.- For the purpose of this proviso, the expression 'law relating to motor vehicle' means the Motor Vehicles Act, 1939 or the Motor Vehicles Act, 1988, as the case may be. (2) The tax shall be payable by an importer in such manner and within such time as may be prescribed."
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53. A reading of the above two provisions will clearly show that both the provisions are identical and the only distinction that can be pointed out under Section 3 of the 1994 Act and Section 3(1) of the Tamil Nadu Act is that Kerala enactment applies to entry of any goods into any local area, whereas, Tamil Nadu Act pertains to entry of any Motor Vehicles into local area, as the State of Tamil Nadu has enacted separate law for entry of goods into local areas by Tamil Nadu Tax on Entry of Goods Into Local Areas Act, 2001.
54. As noticed above, Section 2(h) has defined what the "local area" means. One more common feature between Kerala enactment and the Tamil Nadu enactment is the definition of local area as defined under Section 2(d) of the said enactment.
55. Bearing the above legal principles, we now proceed to take note of the decision of the Hon'ble Supreme Court in the case of Fr.William Fernandez and test its applicability to the cases on hand. http://www.judis.nic.in 34
56. We are required to undertake this exercise on account of the argument advanced by the learned counsels for the petitioner that the Hon'ble Supreme Court in Fr.William Fernandez dealt only with entry tax legislation of the states of Orissa, Bihar, Kerala and Jharkand. We have noted above that the Statement of Objects and Reasons of the Kerala and Tamil Nadu Act are in pari materia as well as the charging Section viz., Section 3 and the definition of local area in both enactments.
57. Bearing in mind this similarity, we now go to the decision in Fr.William Fernandez. One of the questions which was framed for consideration by the Supreme Court was whether Section 2(d) read with Section 3 of Orissa Entry Tax Act, 1999, Section 2(d) read with Section 3 of Kerala Act and Bihar Act, 1993 (before its amendment in 2003), never intended to levy any entry tax on the goods, entering into local area of the State from any place outside the territory of India.
58. The other questions which were framed for consideration may not be relevant to the cases on hand. In none of these cases, the petitioners have challenged the constitutional validity or legislative competence of the State to enact the law.
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59. The submission made on behalf of the respondents before the Supreme Court was that Section 2(d) of the Kerala Act on its own term does not cover entry of goods into local area from any place outside the country. It was further submitted that the expression any place outside the local area by itself would have been enough to cover the goods imported from anywhere outside the local area; Outside the local area would have been outside the State or outside the country but Legislature never intended to levy entry tax on goods imported from outside the country that is why entry of goods from local area, from outside the State is provided for. This argument was considered by the Hon'ble Supreme Court and the contentions advanced by the assessees was rejected on the following terms:-
"58. The plain and literal construction when put to Section 3 read with Section 2(d) clearly means that goods entering into local area from any place outside the local area or outside the State are to be charged with entry tax. Foreign territory would be a place which is not only outside the local area but also outside the State. The writ petitioners are trying to introduce words of limitation in the definition clause. The interpretation which is sought to be put up is that both the phrases be read as:
(1) from any place outside that local area but within that State;
(2) any place outside the State but within India.
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59. It is well known rule of statutory interpretation that by process of interpretation the provision cannot re-written nor any word can be introduced. The expression any place before the words outside the State is also indicative of vide extent. The words "any place" cannot be limited to a place within the territory of India when no such indication is discernible from the provisions of the Act.
60. The Entry tax legislations are referable to Entry 52 of List II of Seventh Schedule of the Constitution. Entry 52 also provided a legislative field, namely, 'taxes on the entries of goods into a local area for consumption, use or sale therein'. Legislation is thus concerned only with entry of goods into a local area for consumption, use or sale. The origin of goods has no relevance with regard to chargeability of entry tax. In this context reference is made to judgment of Federal Court reported in Miss Kishori Shetty v. The King, MANU/FE/0040 :
AIR 1950 FC 69 (1950 RLW 46)...."
60. The Hon'ble Supreme Court then proceeded to consider the argument with regard to how the statute requires to be, in other words more or less identical to that which was advanced before us by Mr.T.V.Lakshmanan was considered by the Supreme Court and the same was answered against the assessee on the following terms:-
" 61. To the same effect judgment of this Court in State of Bombay vs. S.F.N. Balsara, AIR 1951 SC 318 is referred. The submission which has been pressed by the learned counsel for the writ petitioners is that in a taxing statute one has to merely look into the text and there is no room for any intentment in deciding liability of the subject to tax regard State Of Kerala And Others vs Fr.William Fernandez Etc Etc on 9 October, 2017 must be had to plain and strict letter of law.
http://www.judis.nic.in Reliance has been placed on the judgment CIT v. Vatika 37 Township (P) Ltd., (2015) 1 SCC 1. In paragraph 41.2 and paragraph 41.3 following has been held:
41.2. At the same time, it is also mandated that there cannot be imposition of any tax without the authority of law.
Such a law has to be unambiguous and should prescribe the liability to pay taxes in clear terms. If the provision concerned of the taxing statute is ambiguous and vague and is susceptible to two interpretations, the interpretation which 50 favours the subjects, as against the Revenue, has to be preferred. This is a well?established principle of statutory interpretation, to help finding out as to whether particular category of assessee is to pay a particular tax or not. No doubt, with the application of this principle, the courts make endeavour to find out the intention of the legislature. At the same time, this very principle is based on fairness doctrine as it lays down that if it is not very clear from the provisions of the Act as to whether the particular tax is to be levied to a particular class of persons or not, the subject should not be fastened with any liability to pay tax. This principle also acts as a balancing factor between the two jurisprudential theories of justice Libertarian theory on the one hand and Kantian theory along with Egalitarian theory propounded by John Rawls on the other hand.
41.3. Tax laws are clearly in derogation of personal rights and property interests and are, therefore, subject to strict construction, and any ambiguity must be resolved against imposition of the tax. In Billings v. United States, the Supreme Court clearly acknowledged this basic and long?standing rule of statutory construction: (L Ed p. 598) Tax statutes should be strictly construed; and if any ambiguity be found to exist, it must be resolved in favour of the citizen.
62. Further, in Mathuram Agrawal v. State of M.P., 1999(8) SCC 667, in paragraph 12 following has been stated:
12....The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law http://www.judis.nic.in i.e. the subject of the tax, the person who is liable to pay the 38 tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter."
61. The legal principles which flow from the observations contained in the above paragraphs is that the well established principle of statutory interpretation, to help finding out as to whether particular category of assessee is to pay particular tax or not. The Court makes endeavour to find out the intention of the legislature. At the same time, the very principle is based on "fairness" doctrine as it lays down that if it is not very clear from the provisions of the Act as to whether the particular tax is to be levied to a particular class of persons or not, the subject should not be fastened with any liability to pay tax. Further, tax statutes should be strictly construed; and if any ambiguity be found to exist, it must be resolved in favour of the citizen. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law.
62. The learned counsel for the petitioners also referred to the observations made by the Supreme Court in paragraph 63 of the judgment and to buttress their submission contended that Section 4 of the Act has be read into charging Section 3 and if that is done, then, http://www.judis.nic.in 39 the intention of the legislature is clear that there was no intention to levy entry tax on imported vehicles from outside the State.
63. However, the Hon'ble Supreme Court has given an answer to such argument by rejecting the stand taken by the assessee in Paragraph 63 of the judgment, which reads as follows:-
"63. There cannot be any dispute to the proposition as laid down by this Court in the above noted cases. Statutes which are in consideration are the statues where clear charging provision has been enacted and charging of entry tax is on entry of the scheduled goods into a local area for consumption, use or sale. Thus, the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is same for all goods entering into local area...."
64. In paragraph 58 of the judgment, the Hon'ble Supreme Court has clearly held that plain and literal construction when put to Section 3 read with Section 2(d) of Kerala Tax on Entry of Goods into Local Areas Act, 1994 clearly means that goods entering into local area from any place outside the local area or outside the State are to be charged with entry tax. Foreign territory would be a place which is not only outside the local area but also outside the State. Further, the Supreme Court http://www.judis.nic.in 40 rejected the writ petitioner's arguments by stating that they are trying to introduce words of limitation in the definition clause.
65. Statutory Interpretation cannot be done, as by process of interpretation, the provision cannot be re-written nor any word can be introduced. Further, it was held that the expression "any place" before the words "outside the State" is also indicative of wide extent. The words "any place" cannot be limited to a place within the territory of India when no such indication is discernible from the provisions of the Act. Further, it was pointed out that the origin of goods has no relevance with regard to chargeability of entry tax.
66. In this context, the decision of the Federal Court in Miss Kishori Shetty v. The King, [AIR 1950 FC 69] was referred to. Ultimately, the Hon'ble Supreme Court held that the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is the same for all goods entering into local area. In no uncertain terms, the Hon'ble Supreme Court held that charging Section is clear, unambiguous and the provisions cannot be read to mean that the http://www.judis.nic.in 41 imported goods coming from outside the country are excluded from charge of entry tax and no such indication is discernible from any provisions of the Act. It was further held that the charging event is complete as and when goods enter into the local area for use, sale or consumption irrespective of its origin.
67. Thus, in our considered view, the judgment in the case of Fr.Willilam Fernandez applies with full force to the cases on hand which arise under the provisions of the Tamil Nadu Act which is pari materia to the Kerala enactment, which was considered by the Hon'ble Supreme Court and levy of entry tax on imported vehicles was upheld. Thus, we are of the clear view that the prayer sought for by the writ petitioners in these cases are not tenable and the writ petitions are liable to be dismissed.
68. Mr.R.L.Ramani, learned Senior Counsel assisted by Mr.B.Raveendran counsel for the petitioner in W.P.No.33525 of 2007 argued on a slightly different plain. As we can understand from the submissions of the learned counsel that the learned counsel would not seriously contest the levy of entry tax on imported vehicles as there is no submission made on that aspect, but arguments were confined only http://www.judis.nic.in 42 on the ground that these are fit cases where administrative waiver of taxes has to be granted.
69. The submission of the learned Senior Counsel is that the first of the decisions was rendered by this Court in a writ petition in W.P.No.498 of 1991 [M/s.Sumitomo Corporation v. State of Tamil Nadu and another] and the said writ petition was dismissed vide order dated 01.09.1999, thereby, holding that entry tax was leviable even for imported vehicles. In W.P.No.8738 of 1999 filed by M/s.TVS Electronics Limited v. The Registering Authority dated 19.04.2000, the writ petition was allowed with a direction to register imported vehicles without collection of entry tax. The third decision is in the case of Aashish Gulati v. The State of Tamil Nadu and others W.P.No.11033 of 2000, dated 06.09.2000, whereby, the learned single Bench did not agree with the view taken in the case of Sumitomo Corporation, largely on account of the decision of the Division Bench of Kerala High Court in Fr.William Fernandez (supra). On account of the differing view, the matter was referred to the Hon'ble Chief Justice to post the case before the Division Bench. We are informed that the matter is still pending. However, the decision of the Division Bench in Fr.William Fernandez (supra) has been reversed by http://www.judis.nic.in 43 the Hon'ble Supreme Court and the matter has been decided against the assessee. Therefore, the said decision is an answer to the reference made in the case of Aashish Gulati (supra).
70. Therefore, in our considered view, there would be no necessity for a separate order to answer the reference and the decision of the Hon'ble Supreme Court in Fr.William Fernandez (supra) covers the issue referred for consideration of the Division Bench.
71. Coming back to the arguments of Mr.R.L.Ramani, learned Senior Counsel, it is submitted that the above orders will clearly show that there was ambiguity and different views were taken by different Benches and under similar circumstances when the provisions of Tamil Nadu General Sales Tax Act, 1959 were put to challenge, wherein as per Entry 150 in the Schedule to the Act, articles of food and drink sold to customer in 3 star, 4 star and 5 star hotels were taxable at 10% this was challenged as being discriminatory.
72. A Division Bench of this Court in Sangu Chakra Hotels (P) Ltd vs. State of Tamil Nadu (1985) 60 STC 125 allowed the writ petitions on the ground that the demand of higher rate of tax for star http://www.judis.nic.in 44 category hotels were discriminatory. The State Government filed appeal before the Hon'ble Supreme Court, which was tagged along with other connected matters and the Supreme Court in Kerala Hotel and Restaurant Association and others v. State of Kerala and others [1990 Vol. 77 STC 253], allowed the appeals filed by the State holding that there is a rational nexus exists for such classification and the classification is founded on intelligible differentia. Subsequently, one of the petitioners had filed separate appeals before the Supreme Court in Civil Appeal Nos.101 and 102 of 1995, wherein, it was pointed out that after the Division Bench judgment in Sangu Chakra Hotels (P) Ltd., entry was struck down and subsequently after the decision of the Supreme Court in Kerala Hotel and Restaurant Association (supra), entry was revived and in the interregnum, tax was not collected and therefore, administrative waiver was granted.
73. In this regard, the petitioners relied upon G.O.Ms.No.973 Revenue Department, dated 27.05.1967. The Hon'ble Supreme Court directed the Government to examine the claim of the South India Hotels and Restaurants Association and the claim was considered and vide G.O.Ms.No.157 Commercial Taxes and Religious Endowments Department, dated 22.04.1996, administrative waiver was granted http://www.judis.nic.in 45 subject to certain conditions. Therefore, it is the submission of the learned Senior Counsel that identical directions can be issued in these cases as well, as the petitioners cannot now pay tax.
74. We have heard the learned Special Government Pleader on the above submissions.
75. At the first instance, we need to point out that no Court can compel the Government to exercise its power to examine or for that matter to grant administrative waiver. It is a policy decision to be taken by the Government and it is not for the Court to dictate as to whether or not the Government should exercise such power. That apart, facts of the case in which Government granted administrative waiver subject to conditions vide G.O.Ms.No.157 dated 22.04.1996 was entirely different and cannot be applied to the present cases, which arise out of a different enactment, the purport and intent being totally different. First of the decision was in the year 1999 holding that entry tax is leviable on import of vehicles. Another learned single Bench took a different view but did not distinguish the earlier decision, but chose to follow the decision of the Division Bench of the Kerala High Court in Fr.William Fernandez. In the third decision, there has been a reference because in http://www.judis.nic.in 46 the third decision, the first decision was noted. However, we need not labour much to make a further probe on this issue because the decision of the Division Bench of the Kerala High Court in Fr.William Fernandez has been reversed by the Hon'ble Supreme Court and the matters have attained finality. It is not in dispute that the petitioner in W.P.No.33525 of 2007 is still in possession and ownership of the vehicle imported by them. The law on the subject as decided by this Court as early as 01.09.1999 holds that the entry tax is leviable on imported vehicles. Therefore, we do not find any merits in the submissions that the matter should be relegated to the Government for grant of administrative waiver.
76. For all the above reasons, the writ petitions are dismissed and it is held that the petitioners are liable to pay entry tax on imported vehicles brought into the State of Tamil Nadu for use or for sale. Insofar as the miscellaneous petitions filed by the petitioners raising additional grounds are concerned, the learned Senior Counsel has not advanced any arguments, but their argument was only on the ground of administrative waiver in the light of the decision taken by us in the http://www.judis.nic.in 47 preceding paragraphs. Hence, there is no necessity to consider the additional grounds raised in the miscellaneous petitions. Accordingly, the same stands closed. No costs.
(T.S.S.,J.) (N.S.K.,J.) 29.01.2019 Speaking Order Index : Yes svki/mrm To
1.The Secretary to Government, The State of Tamil Nadu, Fort St.George, Chennai -9.
2.The Commercial Tax Officer, Mylapore Assessment Circle, Chennai.
3.The Regional Transport Officer, South Chennai.
http://www.judis.nic.in 48 T.S.SIVAGNANAM,J.
and N.SATHISH KUMAR,J.
(svki) W.P.No.32710 of 2005 and etc.,batch 29.01.2019 http://www.judis.nic.in