Case Of: Hindustan Motors Limited
Issued By: Madras High Court
Order No: WP. No. 1656 of 1996
Date: 28TH April 2024
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Entry tax must not exceed the sales tax/VAT imposed on local goods, and any excess amount is eligible for a refund.
Petitioners challenge the entry tax levied under The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990.
They claim the entry tax on vehicles imported from other states is discriminatory compared to the local sales tax/VAT on goods manufactured within Tamil Nadu.
The period under dispute is from 01.04.1992 to 31.03.1998, where petitioners seek a refund of excess entry tax paid.
Vehicles involved in most petitions are cars and heavy vehicles, arguing violation of Articles 301 and 304(a) of the Constitution.
The learned Additional Advocate General acknowledged that entry tax cannot exceed local sales tax as per previous judgments.
The court held that charging higher entry tax than the local sales tax is unconstitutional. Petitioners are entitled to apply for a refund of the
excess entry tax paid beyond the local sales tax/VAT.
Authorities are directed to process refund applications within three months of submission by petitioners.