JAMMU AUTOMART PVT. LTD. Vs. UNION TERRITORY OF J&K
LAWS(J&K)-2020-10-48
HIGH COURT OF JAMMU AND KASHMIR
Decided on October 19,2020

Jammu Automart Pvt. Ltd. Appellant
VERSUS
Union Territory Of JAndK Respondents

JUDGEMENT

Rajesh Bindal, Sanjay Dhar,J. - (1.)The order will dispose of three petitions bearing WP(C) Nos. 1140, 1141 and 1093/2020. The facts are being taken from SWP No. 1140/2020. The petitioner has approached this Court praying for quashing of order dated 22.06.2020, whereby the petitioners have been directed to deposit differential amount of token tax/fees of the vehicles sold by it from 01.08.2019 to 26.11.2019.
(2.)Learned counsel for the petitioner submitted that the petitioner is a company registered under the Companies Act, 1956. It is authorized dealer of Hyundai Motors Private Limited. In the regular course of business it is selling the Automobile Products manufactured by Hyundai Motors Private Limited.
(3.)The petitioner charges the cost value of the vehicle and the taxes levied thereon. Registration of vehicles is the responsibility of the buyer and so the payment of tax. Vide SRO 492 dated 01.08.2019, issued by the Transport Department in exercise of powers conferred under section 3 of the J&K Motor Vehicles Taxation Act, 1957 (for short 'the 1957 Act'), registration fee on the vehicles was increased. As against the earlier system of payment of registration fee on annual basis, one time ad-valorem tax was levied. Prior to that, vide communication dated 12.10.2017, issued by the Transport Department, dealer assisted system for registration of vehicles was introduced. The idea was to facilitate the buyers of the vehicles, check delays and errors, and reduce their harassment. In terms of the aforesaid scheme, a buyer of the vehicle was required to deposit the registration fee with the dealer selling the vehicle, who in turn was to deposit the same with the Transport Department online on Vahaan Portal. After the increase of the token tax under the 1957 Act, the petitioner continued collecting that amount from the buyers, on the cost of the vehicles and deposit the same with the Department. As principally no tax on tax can be levied, the amount of ad- valorem registration fee was calculated on the price of the vehicle excluding the GST portion thereof. The same was deposited with the treasury online and the details were uploaded on the Vahaan Portal. There was no objection raised. The system was followed like this till such time a clarification was issued by the Transport Department vide Government Order dated 26.11.2019, clarifying that the token tax has to be calculated on the basic cost plus GST. After the issuance of the aforesaid clarification as the petitioner was not to pay the tax from its own pocket and it is the responsibility of the buyer of the vehicle, the petitioner started following that system. More than six months thereafter, a communication dated 22.06.2020, was received from the respondent No.3/Regional Transport Officer Transport Nagar, Jammu, directing the petitioner to deposit the differential tax for the period from 01.08.2019 to 25.11.2019. It was difference of registration fees on the amount of GST, which earlier was not included in the cost price of the vehicle for the purpose of calculation of tken tax.
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