Tamil film actor C. Joseph Vijay received a major relief from the Madras High Court on Friday with the court ruling that he would be liable to pay penalty for delayed payment of entry tax only from January 29, 2019 to December 2021 and not from 2005 when he imported a BMW X5 from the United States.
Disposing of a batch of writ petitions filed by him, musician Harris Jayaraj and others, Justice R. Suresh Kumar held that all of them were liable to pay entry tax since a Division Bench of the High Court had on January 29, 2019 made it clear that the State government was entitled to levy such tax.
However, agreeing with advocate A.N.R. Jayaprathap, representing Mr. Vijay, that the Commercial Taxes department ought not to have demanded a huge amount of ₹30.23 lakh towards penalty by levying it since 2005, the judge held that it could be levied only from January 29, 2019.
Mr. Vijay had approached the court in January this year challenging a notice issued by Commercial Taxes Department on September 17, 2021 demanding ₹7.98 lakh as entry tax, along with penalty of ₹30.23 lakh for having imported a BMW X5 luxury car from the U.S. in 2005.
During the course of hearing, Mr. Jayaprathap informed the court that the actor had paid the tax liability of ₹7.98 lakh in December 2021 but challenges the penalty alone. In his affidavit, the actor said he had imported the BMW, on payment of necessary import duty, since there were no authorised dealers in Chennai at that point of time. Then, there was also uncertainty over the applicability of Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act of 1990.
In one case related to entry tax, a single judge of the Madras High Court had followed Kerala High Court’s 1999 judgment in Fr. William Fernandez’s case and held that State government could not levy entry tax. However, another single judge had taken a contrary view and hence the matter was referred to a Division Bench.
Finally, the issue got resolved only in 2017 when the Supreme Court overturned Kerala High Court’s verdict. In the meantime, Mr. Vijay said that he filed a writ petition in the Madras High Court in 2005 against demand of entry tax on his BMW and obtained an interim order to get the vehicle registered with the Regional Transport Office concerned.
After using it for four years, he sold the vehicle to Deepak Murali in 2009. However, the 2005 writ petition remained pending and got dismissed by Justice M. Dhandapani only on June 28, 2019. Subsequently, the department had passed the assessment order and demanded the tax with penalty.
Since there was a delay in replying to the demand notice because the actor was busy with outdoor film shootings, the official concerned issued a recovery notice on December 17 stating that non-payment of ₹38.21 lakh could lead to attachment of bank accounts, movable properties and also civil arrest.
“Therefore, the petitioner was constrained to pay ₹7.98 lakh under protest and challenge the September 17, 2021 order,” he said and urged the court to quash the demand notice as well as the subsequent recovery notice.