In a major relief to the tamil actor Vijay and Music Director Harris Jayaraj, the Madras High Court has last week ruled that he would be liable to pay penalty for delayed payment of entry tax only from January 29, 2019 to December 2021 and not from 2005 on the import of a BMW X5 from the United States.
Mr. Vijay had approached the court in January this year challenging a notice issued by Commercial Taxes Department on September 17, 2021 demanding ₹7.98 lakh as entry tax, along with penalty of ₹30.23 lakh for having imported a BMW X5 luxury car from the U.S. in 2005.
Harris Jayaraj’s case was that he imported two vehicles in 2010 for which registration was denied in the state for nonpayment of entry tax. Later, in 2019 the department issued a demand notice for payment of arrears to the tune of 13 lakh. When the petition was filed, both cases were clubbed together.
Disposing the petitions, Justice R. Suresh Kumar held that all of them were liable to pay entry tax since a Division Bench of the High Court had on January 29, 2019 made it clear that the State government was entitled to levy such tax.
Advocate A.N.R. Jayaprathap, representing Mr. Vijay, contended that the Commercial Taxes department ought not to have demanded a huge amount of ₹30.23 lakh towards penalty by levying it since 2005. Upholding the same, the Court held that it could be levied only from January 29, 2019.
It was further contended that after using it for four years, he sold the vehicle to Deepak Murali in 2009. However, the 2005 writ petition remained pending and got dismissed by Justice M. Dhandapani only on June 28, 2019. Subsequently, the department passed the assessment order and demanded the tax with penalty.
Since there was a delay in replying to the demand notice because the actor was busy with outdoor film shootings, the official concerned issued a recovery notice on December 17 stating that non-payment of ₹38.21 lakh could lead to attachment of bank accounts, movable properties and also civil arrest.
“Therefore, the petitioner was constrained to pay ₹7.98 lakh under protest and challenge the September 17, 2021 order,” he said and urged the court to quash the demand notice as well as the subsequent recovery notice.
Disposing the petitions, the Court held that “I am in agreement with the said view taken by the learned Judge in the said case, i.e., M/s. National Asphalt Products and Construction Company’s case. Hence this Court has no hesitation to hold that, insofar as the imposition of penalty on the belated payment of entry tax of these petitioners are concerned, such a penalty clause can be invoked by the Revenue only after 29.01.2019 but not before that date.”
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