Provisions of the Entry Tax on vehicles
The Entry Tax was a levy on goods entering into a State (similar to Octroi which was levied upon entry of goods into a city). As per the Tamil Nadu Tax On Entry Of Motor Vehicles To Local Areas Act, 1990, (Act), Entry tax was required to be paid @ 12.50% on the purchase value of motor vehicles entering into the State of Tamilnadu. The levy applies whether the vehicle was for sale or for use by the importer. The Act was in force until the introduction of the GST law.
Facts of the case
During the year 2012, actor Vijay from Tamilnadu imported a new Rolls Royce Ghost Motor Car from England. When the vehicle was sent for registration, the RTO required a certificate to be produced from the Commercial Taxes department with regard to the Entry tax liability. When approached, the Assistant Commissioner of the Commercial taxes department informed the Actor that Entry tax should be paid for the vehicle as per the Act.
Image Source- Twitter account of @actorvijay
What was Actor Vijay’s contention?
After the AC (CT) demanded entry tax, the Actor filed a writ petition before the Madras High Court (C.Joseph Vijay v. The State of Tamilnadu W.P.No.18385 of 2012 & M.P.No.1 of 2012) with the contention that ‘extraordinary Entry tax on imported vehicle is imposed’!.
What did the Court decide?
The Court’s work was made simple since the Actor’s plea neither involved interpretation of the law nor the Constitution.
The Court, in a strongly worded verdict dt.8th July 2021, directed the actor to pay the Entry tax as demanded by the tax department within 2 weeks from the date of receipt of a copy of the order. The Court cited the decision of the Supreme Court in State of Kerala and others vs. Fr.William Fernandez Etc., 2018 (57) GSTR 6, where it was held that the Government is competent to collect Entry Tax.
Apart from confirming the Entry tax demand, the Court also ordered for levy of a fine of Rs.1,00,000/- on the actor to be paid to the Tamil Nadu Chief Minister’s Covid-19 Public Relief Fund within 2 weeks from the date of receipt of a copy of the order.
The actor would be spared from payment of interest on the 2012-year Entry tax liability since the legislation does not have the enabling provision to levy interest (also refer Madras High Court decision in M/s. Karpagamoorthy Automobiles v. The CTO W.P(MD) Nos.21044 & 21045 of 2016 and W.M.P(MD) Nos.15043 & 15044 of 2016).
What was the Court agitated about?
Like typical dialogues in Actor Vijay’s films, the language of the Court’s bashing verdict was in style!. The furious Court thrashed the case with the following ‘dialogues’:
‘It is surprised to note that the petitioner has not even stated his profession or occupation in his affidavit’.
‘The Tax collected from the Government is to carryout the functions such as social welfare projects like Schools, Hospitals, Housing Projects for the Poor etc., and infrastructure such as Road Projects, Flyovers, Railways, Ports, etc. Security infrastructure of our great Nation, Enforcement of Law and Order, Pensions for elders, Benefit scheme to the unemployed and the citizen living below poverty lines’.
‘In the State of Tamil Nadu, Cine Heroes rosed as rulers of the State and therefore, the people are under the impression that they are the real heroes. Thus, they are not expected to behave like a reel heroes. Tax evasion is to be construed as anti-national habit, attitude and mindset and unconstitutional’.
‘These Actors are portraying themselves as champion to bring the social justice in the society. Their pictures are against corrupt activities in the society. But, they are evading tax and acting in a manner, which is not in consonance with the provisions of the Statutes’.
‘The reputed persons of this great Nation should realize that the money reaches to them is from the poor mans blood and from their hard earned money and not from the sky’.
Author’s note
Despite the Supreme Court upholding the constitutional validity of the Entry tax law, the actor held on to his feeble and dramatic contention that ‘extraordinary Entry tax on imported vehicle is imposed’ and the Court responded to the actor’s case with fitting replies.
Such actors should realise the impression they create in the minds of their fans. In a casual conversation, on coming to know that I was a CA, an innocent Vijay fan asked me – Sir, is it true that the Government does not levy GST on liquor whereas they levy 12% on medicines? (Mersal movie effect!!!) – I had to explain to him that liquor does not attract GST since it falls under VAT and the tax rate is as high as 270% and at multiple points of sale. This is how much the reel heroes influence through their movies. As pointed out by the High Court, ‘In the State of Tamil Nadu, Cine Heroes rosed as rulers of the State and therefore, the people are under the impression that they are the real heroes’.
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Sir ji….
B4 Entry Tax of 12.5% (TN) Actor Vijay wld hv paid Customs Tax (CT).
I am unable 2 find d CT Rate.
Earlier, around 30 years back, if I am right, CT was 200% on product cost.
CT cost is not mentioned in this matter as the cost of RR Ghost Car is around Rs.7 Crores.
A good article and exposes why people refuse to pay the dues on untenable grounds. It is high time that courts put stringent penalties for frivolous complaints especially from cream of the society people. It is a good lesson for others to toe in line, where they are willing to pay crores for luxury items but contend the few lakhs to be paid for the benefit of the society.
It is high time that courts put stringent penalties for frivolous complaints especially from cream of the society people. It is a good lesson for others to toe in line, where they are willing to pay crores for luxury items but contend the few lakhs to be paid for the benefit of the society.
Too rich to pay the paltry entry tax. Yes, his court charges for handling the case were higher than the entry tax. Yes, our reel heroes to save our nation with their imaginary powers.