IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.2.2008 CORAM THE HONOURABLE MR.JUSTICE P.D.DINAKARAN AND THE HONOURABLE MR.JUSTICE R.REGUPATHI Writ Appeal No.1433 of 2004 The Executive Officer Selection Grade Town Panchayat Vikramasingapuram Tirunelveli District. .. Appellant/Petitioner Vs. 1. The Joint Commissioner of Commercial Taxes O/o. The Commissioner of Commercial Taxes Chepauk, Chennai-5. 2. The Assistant Commercial Tax Officer Tirunelveli, Tirunelveli District. 3. The Deputy Commercial Tax Officer Ambasamudiram Tirunelveli District. .. Respondents/Respondents Appeal under Clause 15 of the Letters Patent against the order of this Court dated 26.2.2004 made in W.P.No.2895 of 2004 praying to issue Writ of Certiorarfied Mandamus to call for the records of the 1st Respondent in his R.No.JJ2/R-P/MV/31/00 and Na.Ka.No.m3/2012/2000 dated 05.09.2003 and on the proceedings of the 3rd respondent and to quash the same. For Appellant : Mr.P.S.Jaya Kumar For Respondents : Mr.Haja Nazirudeen, Spl.G.P.(T) https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T (Delivered by P.D.DINAKARAN,J.) The unsuccessful writ petitioner has preferred the above appeal against the order of the learned single Judge dated 26.2.2004 made in W.P.No.2895 of 2004. 2. The facts which paved way for filing of the above appeal, in a nutshell, are as under. (a) The appellant purchased one Swaraj Mazda mini lorry from M/s. Swaraj Mazda Ltd., Chandigarh during the assessment year 1997-98 through M/s. Natesan Auto Agency, Tirunelveli, a dealer of Swaraj Mazda Vehicle. The third respondent, by proceedings dated 29.10.1999 assessed Entry Tax for the said vehicle amounting to Rs.56,105/- with penalty of Rs.1,12,210/-. Hence, the appellant preferred an appeal before the second respondent and the same was rejected on the ground that the appellant had not fulfilled the conditions for filing the appeal. Aggrieved by the same, the appellant preferred a revision petition before the first respondent and the same was rejected confirming the order of the appellate authority. Infuriated, the appellant has preferred W.P.No.2895 of 2004. (b) The learned single Judge, by order dated 26.2.2004, dismissed the writ petition observing that the learned counsel for the petitioner, without referring to a particular provision, had argued as a general proposition that as and when any vehicle had been purchased by any person, all liabilities to make payment in respect of the tax would fall on the dealer who sold the vehicle and not on the petitioner. Hence, the present appeal. 3.1. According to the learned counsel for the appellant, since the appellant had purchased the vehicle from one M/s. Natesan Auto Agency, Tirunelveli, who is a dealer of Swaraj Mazda Ltd., M/s. Natesan Auto Agency alone is responsible to pay the entry tax, but not the appellant. 3.2. Alternatively, the learned counsel for the appellant contends that the appellant, being the local body, are exempted from the payment of entry tax as per the Government letter No.269 dated 4.5.1990. 4.1. On the other hand, learned Special Government Pleader contends that the Entry tax is liable to be paid by the importer as per Section 2 (g) of the Tamil Nadu Tax on Entry of Goods Act, 2001. As per Section 3 (2) of the Act, such tax on entry of any scheduled goods into any local area for consumption shall be payable by the importer in accordance with the provisions of the Act. https://hcservices.ecourts.gov.in/hcservices/ 4.2. With regard to the alternative contention that the appellant, being the local body, are exempted from the payment of entry tax as per the Government letter dated 4.5.1990, the learned Special Government Pleader contends that if that be so, the local body is at liberty to approach the Assessing Officer for such exemption. 5. We have given careful consideration to the submissions of both sides. 6.1. In order to appreciate the rival contentions of both the parties, we are constrained to refer the sections 2(g) and 3(2) of the Act, which read as under. Section 2(g): "importer" means a person who brings or causes to be brought any scheduled goods whether on his own account or on account of a principal or any other person, into a local area, from any place outside the State for consumption, use or sale therein or who owns the scheduled goods at the time of entry into the local area." Section 3: Levy and collection of tax:- (1) Subject to the provisions of this Act, there shall be levied and collected a tax on the entry of any scheduled goods into any local area for consumption, use or sale therein. The rate of tax shall be at such rate not exceeding thirty per cent on the value of the scheduled goods, as may be fixed by the Government, by notification and different rates may be fixed for different scheduled goods. (2) The tax shall be payable by an importer in accordance with the provisions of this Act. 6.2. A perusal of section 3 of the Act makes it clear that the dealer is not referred to for the purpose of payment of tax on the entry of any scheduled goods into any local area for consumption and there shall be levy and collection of tax on the entry of the scheduled goods into any local area for consumption, use or sale therein. In other words, not necessarily the consumer alone be a importer, but a dealer who sells the scheduled goods to the consumer is also an importer. As per charging Section 3(2), the importer of the scheduled goods alone is responsible to pay the tax on entry of any scheduled goods into any local area for consumption, use or sale therein. https://hcservices.ecourts.gov.in/hcservices/ 6.3. As per Section 2(g) of the Act, where the importer is defined, an importer means a person who brings or causes to be brought any scheduled goods whether on his own account or on account of a principal or any other person, into a local area, from any place outside the State for consumption, use or sale therein or who owns the scheduled goods at the time of entry into the local area. 7. According to the respondents, the appellant is the importer who had placed the orders before M/s. Natesan Auto Agency for the purchase of mini lorry for their consumption and M/s. Natesan Auto Agency was acting only as an agent of Swaraj Mazda Ltd. at Chandigarh and there is no evidence to show that M/s. Natesan Auto Agency had acted as a dealer. On the other hand, according to the appellant, the order was placed only to M/s. Natesan Auto Agency, who is a dealer under Swaraj Mazda Ltd., Chandigarh and not directly to the Swaraj Mazda Ltd., Chandigarh and M/s. Natesan Auto Agency alone supplied the vehicle to the appellant at Tirunelveli itself. 8. The above undisputed facts would go to show that the scheduled goods, viz. the mini lorry was owned by M/s. Natesan Auto Agency at the time of entry into the local area, might be either for consumption or use or sale. Accordingly, M/s. Natesan Auto Agency alone sold the vehicle to the appellant. Therefore, as per the definition of importer under section 2(g), the action should have been initiated not only against the appellant, but also against the importer who owned the scheduled goods at the time of entry into the local area, viz. M/s. Natesan Auto Agency. The Assessing Officer thus, having rightly initiated action, merely because M/s. Natesan Auto Agency had not raised any objection, had chosen to proceed only against the appellant, which vitiates the impugned demand of entry tax and penalty. 9. The order of the learned single Judge is, therefore, set aside. The writ appeal is allowed. The impugned demand of entry tax and the penalty is set aside, with liberty to the respondents to proceed against both the appellant and M/s. Natesan Auto Agency. However, if the appellant is entitled to any exemption, based on any Government letter, they are at liberty to work out their rights, if they are so advised. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar kpl https://hcservices.ecourts.gov.in/hcservices/ To 1. The Joint Commissioner of Commercial Taxes O/o. The Commissioner of Commercial Taxes Chepauk, Chennai-5. 2. The Assistant Commercial Tax Officer Tirunelveli, Tirunelveli District. 3. The Deputy Commercial Tax Officer Ambasamudiram Tirunelveli District. 1 cc To Mr.P.S.Jayakumar, Advocate, SR.7130. 1 cc To The Special Government Pleader (Taxes), SR.7225. W.A.No.1433 of 2004. SA(CO) RVL 10.03.2008 https://hcservices.ecourts.gov.in/hcservices/