TMI Blog2003 (8) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... be briefly noticed. 3.. On October 1, 1994 the appellant purchased a Maruti 1000 from M/s. Solar Automobiles, Mangalore in the State of Karnataka. He had paid a total amount of Rs. 3,94,043.68. Out of this, he had paid an amount of Rs. 22,285.39 by way of sales tax at the rate of 6 per cent of the price of the car, which was Rs. 3,71,423.10. An amount of Rs. 304.72 had been paid as the price for the accessories. On that too, sales tax of Rs. 30.47 was paid at the rate of 10 per cent. The appellant brought the car to Kerala. On November 4, 1994 the car was registered by the registering authority. No demand for entry tax was made. After a lapse of more than three years, a notice dated February 19, 1998 was issued to the appellant under section 8(4) of the Act. A copy of this notice has been produced as exhibit P3. By this notice, the appellant was called upon to pay a tax at the rate of 6 per cent. The estimated purchase value of the vehicle was fixed at Rs. 3 lakhs. On receipt of this notice, the appellant submitted a reply dated March 17, 1998. He maintained that the tax was not leviable. A copy of this reply is exhibit P4. On March 26, 1998 he also filed a return in form II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle at the time of its entry into the local area." The State means "the State of Kerala". Section 3 provides for the levy of tax. Section 4 deals with the reduction in tax liability. It provides as under: "4. Reduction in tax liability.-Where an importer of a motor vehicle liable to pay tax under this Act, being a dealer in motor vehicles, becomes liable to pay tax under the Kerala General Sales Tax Act as a result of the sale of such motor vehicle, then the amount of tax payable under the General Sales Tax Act shall be reduced by the amount of tax paid under this Act. (2) Where an importer who, not being a dealer in motor vehicles, had purchased a motor vehicle for his own use in any Union Territory or any other State, then the tax payable by him under this Act shall, subject to such conditions as may be prescribed, be reduced by the amount of tax paid, if any, under the law relating to general sales tax in force in that Union Territory or State." A perusal of the above provision shows that under clause (1) the liability of a dealer in motor vehicles to pay tax under the General Sales Tax Act is reduced to the extent of the amount of tax paid under the Act. Clause (2) deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Union Territory or State referred to in sub-rule (1) exceeds the amount of tax payable under the Act, the importer shall not be eligible to claim any refund. (2) No set-off under this rule shall be granted unless the importer proves that tax has actually been assessed by a competent authority and has been paid into the Government treasury of the Union Territory or State referred to in sub-rule (1)." A perusal of the above provision shows that the importer was entitled to "a set-off of the amount equal to the amount of tax paid by him under the law relating to the General Sales Tax Act in force in any other State or Union Territory". The rule as framed by the Government is clearly indicative of the fact that the benefit was not contingent upon the use of the vehicle in the State of purchase. Thus, it is clear that under the provision, as understood by the Government itself, the importer of the vehicle was entitled to the reduction in the tax liability. 13.. Faced with this situation, Mr. Raju Joseph submitted that the Act had been enacted to make up for the loss of sales tax on account of the purchase of vehicles outside the State. If the plea as raised by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the Legislature shall be defeated cannot be accepted. 16.. Mr. Raju Joseph then referred to Circular No. 7/95/TX issued by the Government with the object of explaining the true import of section 4(2). He submitted that the learned single Judge has rightly relied upon this circular. It represents the contemporaneous exposition of the provision and can be a good guide in interpreting the provision. In this circular, after noticing the provision and the view taken by various assessing authorities, it was stated as under: "The reduction under section 4(2) is allowable only when the assessee purchases a motor vehicle in any Union Territory or any other State for his own use in such Union Territory or State. The sale to the consumer should be a local sale within the Union Territory or the other State to the consumer direct. So this applies only to cases where the vehicles are first registered in the Union Territory or the other State and then brought to the State of Kerala within 15 months of such purchase." 17.. Admittedly, there is no provision in the Act authorising the Government or the Board to issue a binding clarificatory circular. Thus, the above clarifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s different. He contended that the appellant in this appeal was not the first purchaser. He had not proved payment of any tax in the State of Karnataka. Thus, the tax had been correctly levied. 22.. A perusal of the paper book shows that the appellant had produced a certificate dated June 18, 1996 showing that an amount of Rs. 21,390.26 had been paid by way of sales tax at the rate of 8 per cent and cess at the rate of 5 per cent to the Government of Karnataka on the purchase of the jeep. He had also produced the invoice from "India Garage" indicating that the total price of the vehicle inclusive of all taxes was Rs. 2,83,961. He had also paid Rs. 210 by way of road tax for one month as temporary registration charges. Thus, it cannot be said that there was no evidence regarding the payment of tax. 23.. No other point was raised. 24.. In view of the above, it is held that: (1) The provisions of section 4(2) have to be construed on the basis of the plain language. The intention of the Legislature or the economic consequences are irrelevant. (2) According to the plain language of the provision, a person who purchases a motor vehicle for his own use outside the State of Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
