Case Law Details
Talasila Sowjanya Vs State of Andhra Pradesh (Andhra Pradesh High Court)
Conclusion: The Andhra Pradesh High Court has held that life tax is to be collected from the vehicle owner upon sale based on the net invoice price of the vehicle and not the ex-showroom price of the vehicle. The life tax can be levied only on the cost of the vehicle under the 6th schedule of the A.P. Motor Vehicles Taxation Act.
Facts: In present facts of the case, the Petitioner filed the writ petitions in the nature of Mandamus declaring the action of the Respondents in demanding Tax 14 percent on the net invoice price of INR 11,10,500/- instead of on the cost of the motor vehicle of INR 8,60,853/- contrary to Section 3 Proviso Four of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 R/w Schedule Six and Andhra Pradesh Motor Vehicles Taxation Rules 1963 as illegal, arbitrary, without jurisdiction and violative of Articles 14, 19, 265 and 300-A of the Constitution of India and consequently to direct the Respondents to forthwith refund the excess Tax of INR 52,168/-. At the time of purchase, the petitioner on demand paid INR 1,20,519 /- towards 14% CGST and INR 1,20,519.38/- towards 14% SGST. The petitioner paid INR 8,608/- towards Compensation Cess. The petitioner was forced to pay INR 1,55,470/- @ 14% towards Tax allegedly levied under Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 R/w Schedule –VI and Andhra Pradesh Motor Vehicles Taxation Rules, 1963 on the price shown in the invoice dated 12.06.2019, which is inclusive of Central GST, State GST & Cess for the reasons best known to the respondents without there being any power much less authority is collecting tax on the basis of “net invoice price” which is inclusive of CGST, SGST & Compensation Cess as well. The motor vehicle purchased by the petitioner falls under fourth proviso to Section 3(2) of the Act and the Tax leviable under Schedule VI of the Act is 12% on the cost of the Motor Vehicle which is INR 8,60,853/- as the Unlanden weight is 1168 kgs.
The respondent submitted that the cost of the vehicle is the actual consideration paid by the petitioner on purchase of the motor vehicle from the dealer. This consideration includes Central GST, State and cess also which comprises the total amount paid by the purchaser. As such, the cost of the vehicle cannot be seen as excluding some part of the amount (consideration) paid by the purchaser. Hence, life tax is to be collected on the total invoice cost of the vehicle.
The Petitioner places its reliance upon the judgment in the case of Fathima Shirin Vs. Joint Regional Transport Officer, (2013) 3 KLT 945.
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