Hindustan Motors Ltd. Vs State of Tamil Nadu (Madras High Court)
Madras High Court held that the entry tax on the goods imported from the other States cannot be more than the sales tax/VAT levied on the goods manufactured within the State. Thus, difference between entry tax paid and local sales tax leviable should be refunded back.
Facts- The petitioners in these petitions seek declaration for the incidence of entry tax levied under The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 as against the incidence of Local Sales Tax leviable on the goods manufactured within the State for the period from 01.04.1992 to 31.03.1998 is discriminatory and violative of Articles 301 and 304(a) of the Constitution of India.
The substratum of the petitioners’ contention is that there is a disparity in the entry tax on the goods imported from the other States and the sales tax/VAT levied on the goods manufactured within the State. The same is impermissible. If the entry tax is more than the sales tax leviable on the local product, then the petitioners are entitled for refund of the excess entry tax paid.
Conclusion- Held that the respondents are not entitled to charge entry tax on the vehicles or the goods referred to in the writ petitions imported from outside the State more than the sales tax/ VAT levied on the goods manufactured within the State. Thus, the petitioners may apply to the concerned authority for refund of the difference in the excess amount between the entry tax paid and the local sales tax leviable. The authority concerned shall consider the case put forth by the petitioners and take a decision on the application of the petitioners for refund of the amount, preferably within three months from the date the petitioners file the application.
