TMI Blog2019 (9) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... y of a higher percentage than entry tax, has admittedly been remitted by the petitioner - The crucial aspect is the timing of the two remittances. A return of entry tax is due on or before the 20th of a month immediately succeeding such taxable event accompanied by proof of payment of entry tax in terms of section 7 of the Entry Tax Act read with Rule 3(2) of the Tamil Nadu Tax on Entry of Motor Vehicles Rules, 1990. Section 4 envisages a set-off as between State Commercial Taxes and Entry Tax only in respect of an identified vehicle. This appears evident by use of the qualifying word such to precede the words scheduled goods in section 4(1), meaning thereby that where an importer pays entry tax, credit of such amount may be availed as set off in regard to the VAT paid on the sale of such scheduled goods . Thus if the vehicle had entered the State but had been sold interstate, the turnover from such inter-state sale would not be available for grant of credit for payment of Entry tax. Thus, a correlation qua vehicle has to be furnished by the assessee to establish that entry tax paid and VAT credit sought, are in respect of the same vehicle. This exercise is required for acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence of stock or purchase/sales omission had been noticed by the Officer. The petitioner stated that it had filed returns under the VAT Act offering sale turnover to tax at 14.5% and thus had paid sales tax in excess. It relied on the provisions of Section 4 of the Entry Tax Act that provided for a set off of excess entry tax against the sales tax liability. 4. Placing reliance on a decision of the learned single Judge in the case of Tvl. Kasi and Sethu V. Deputy Commercial Tax Officer ((2003) 131 STC 73), the petitioner prayed that the sales tax paid by it be reckoned and adjusted towards the liability for entry tax as well. The details of transactions year wise were set out as follows: 2013-14 Purchases of two wheelers from other States including freight CST paid and insurance ₹ 8,18,72,675/- Entry Tax at 12.5 % on the above ₹ 1,02,34,084/- Sale Value of two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Admittedly, no personal hearing was granted in the matter, though specifically requested for by the dealer/petitioner prior to finalisation of assessment. The Assessing Authority confirms the assessment proposals mainly on the ground that the petitioner is not a petty dealer and thus ignorance of the entry tax provisions are not a valid justification for non-compliance with statutory liability. 6. A counter has been filed wherein, while supporting the stand taken by the Assessing Officer in the impugned orders of assessment, the respondents distinguish the case of Kasi and Sethu (supra) on facts. 7. Mr.Mohammed Shaffiq, learned Special Government Pleader for the Revenue advances two arguments in addition to and in support of the impugned order of assessment. Firstly, he states that the provisions of Section 4 of the Entry tax Act offer a concession or benefit to the assessee by way of set off of the entry tax paid against VAT liability. Such a concession cannot be claimed as a vested right by the petitioner, that too, in the converse. Moreover, being a concession, the provisions would have to be construed strictly and hence cannot be expan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Though the levy of entry tax and State sales tax are separate and distinct, the intention of section 4 appears to be that there should be a unified and integrated levy on the transaction of entry into and sale of a vehicle within a State. If an assessee is in a position to establish that it had defrayed the entry tax liability on a particular vehicle, credit to that extent would be available in computing sales tax liability on the sale of that vehicle. 13. There are three features that section 4 presents: (i) Firstly, the petitioner should have computed and remitted entry tax liability in relation to an identified vehicle. (ii) Secondly, credit against VAT liability is available to the extent of the entry tax remitted, upon correlation of the vehicle on which entry tax has been paid and the vehicle on which VAT liability is due. (iii) Thirdly, if the provisions of section 4 are given effect to in the above manner, the exercise will be revenue neutral, since entry tax liability would have been cleared at the point of entry of the goods into the State and credit available for set-off. 14. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en granted adjustment of entry tax as against VAT liability as such an exercise would be revenue neutral. 20. Assume the vehicle had been sold only after three months, the turnover from such sale (of that specific vehicle) would be returned to VAT only in the monthly return for that month. It is as against such VAT payment that the petitioner seeks credit for unpaid entry tax. In such a circumstance, there is a delay in remittance of entry tax and the Revenue has been deprived of the tax from date of entry of the vehicle till date of its sale. The assessee has clearly deferred payment of the entry tax liability in the intervening period. This is not in tandom with the object, intention or Scheme of Section 4 of the Entry Tax Act. 21. Section 4 envisages a set-off as between State Commercial Taxes and Entry Tax only in respect of an identified vehicle. This appears evident by use of the qualifying word such to precede the words scheduled goods in section 4(1), meaning thereby that where an importer pays entry tax, credit of such amount may be availed as set off in regard to the VAT paid on the sale of such scheduled goods . Thus if the vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse case, but there is no rule or statutory provision, which bars the respondent from adjusting the amount already remitted towards general sales tax when import or the sales of vehicles in question are not liable to be assessed under The Tamil Nadu General Sales Tax and setting it off towards levy of entry tax. The levy, which is not authorised by law cannot be enforced nor the respondents could contend that they will keep the collection of tax, though they are not authorised to levy and collect. In the present case, levy and collection towards General Sales Tax Act, it is admitted, is not authorised as nine vehicles concerned are not liable for levy of tax under The Tamil Nadu General Sales Tax Act, 1959. Therefore, the said amount could very well be set off with respect to the entry tax payable in respect of the very same nine vehicles. It is not as if the petitioner has concealed or suppressed material facts, but has included the sales turnover in the return filed by the petitioner. 27. There is one more vital distinction on facts between the above case and the one before me. In Kasi and Sethu (supra), returns were file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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