Three years Limitation is Applicable u/s 8 of Tamil Nadu Tax on Entry of Motor Vehicles Act, Even If Return under Income Tax Act is not Filed: Madras HC [Read Order]

The Madras High Court has held that a three-year limitation is applicable under section 8 of the Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990 even if return under Income Tax Act is not filed. M/s Indian Ocean Sands Company (P) Limited, the petitioner filed to quash the order as it is barred by limitation under Section 8(5) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act 1990 and hence it is unlawful and without jurisdiction. The writ petitioner is a company that had purchased imported Audi Car from Bangalore. Based on the verification of records the respondent had earlier passed an order levying an entry Tax of Rs.2,80,370/- as per the proposals made out vide notice for the assessment year 2007-08, on the purchase of imported Audi car for the total value of Rs.22,42,960/-. The penalty of Rs.4,20,555/- was imposed under Section 15 of the Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990, without any show cause notice for penalty under Section 15 of the Act. Thereafter, the petitioner has filed a detailed reply dated 01.10.2021 for revocation of the order. Considering the same the respondent had passed an order, thereby dropping the levy of penalty based on judgments cited, but sustaining the levy of Entry Tax of Rs. 2,80,370/-. In the meantime, a third pre-revision-cum-personal hearing notice had been served on the petitioner proposing to re-impose the penalty which had been already dropped. The reason for the re-levy of penalty, as stated in the order, is that on verification of records, it is noticed that the assessment was revised without any orders from the judicial forum or departmental appellate authorities. It is noted that the revision of assessments without any directions from the judicial forum or departmental appellate authorities is not allowed as it is prejudice to the revenue, hence it is proposed to reimpose the penalty. After receipt of notice, the petitioner has filed a detailed reply along with judgments, but the respondent has not considered the reply and has not considered the issue of limitation. The petitioner sought a personal hearing, but the same was not considered. Moreover, the levy of entry tax and penalty is barred by limitation as per section 8(5) of the Entry Tax Act. Once the original order is time-barred, then the revision order dated 05.10.2021 and the impugned order dated 21.07.2022 are void and hence both are liable to be set aside. The respondent had filed a counter stating the validity of the Tamil Nadu Tax on entry of Motor Vehicles into Local Areas Act, 1990 was upheld by the Supreme Court and it also held that the same is applicable for imported vehicles in the meanwhile the assessment orders were passed. Moreover, the section 8 limitation is applicable wherever the returns are filed, if returns are not filed then section 8(5) has no application. The petitioner is liable to pay entry tax as mandated under section 3 and the petitioner failed to comply with section 3(3). It was evident that the income tax authorities are empowered to take action, impose interest and impose penalties if returns are not filed. Such provisions are not available in the Entry Tax Act. The Act is silent in case if return is not filed. The Act is not empowering the authorities to take action for not filing returns. In light of the Judgement, the single bench of Justice S Srimathy held that the three-year limitation is applicable, even if a return is not filed. Further quashed the impugned order while allowing the Writ Petition. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Three years Limitation is Applicable u/s 8 of Tamil Nadu Tax on Entry of Motor Vehicles Act, Even If Return under Income Tax Act is not Filed: Madras HC [Read Order]

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