Actor Vijay Tax Case: HC holds penalty only after Jan 2019

CHENNAI: In a major relief to Tamil actor C Joseph Vijay, the Madras High Court held that the actor would be liable to pay penalty only from January 29, 2019, to December 2021 for importing a BMW X5 car from the US in 2005.

Justice R Suresh Kumar passed the verdict on disposing of a petition filed by actor Vijay, music composer Harris Jayaraj and others. Actor Vijay challenged the Commercial Taxes Department’s notice issued in December 2021 asking him to pay Rs.7.98 lakhs as entry tax, along with a penalty of Rs.30.23 lakhs.

However, the judge disagreed with his submissions and held that anyone who is importing cars should pay the entry tax. The judge passed the direction on the ground that a division bench of Madras HC’s order dated January 29, 2021, that the state is empowered to collect the entry tax.

Meanwhile, the judge held that as the levy of penalty for non-payment of the tax as levied or imposed against the petitioners is concerned, such a penalty can be imposed on the petitioners only after 29.01.2019 but not before that date.

“If the petitioners paid only after January 29, 2019, penalty can be imposed on them under Section 15 of the Entry Tax Act only from January 29, 2019, till the date of payment of the full tax. Even if any of the petitioners have not paid the full tax still, it is open to the revenue to recover the full tax as well as the penalty calculated from 29.01.2019 till the date of complete recovery of the tax,” Justice Suresh Kumar held.

The state submitted that the actor did not respond to the notices served to him thrice in 2021 asking to pay the entry tax for his car. After issuing several notices, the actor paid the entry tax on September 17, 2021, and then approached the HC challenging the penalty imposed on him.

The actor claimed that he had paid the import duty for the car since there were no authorized dealers for that car at that time. He also noted that there was uncertainty in the Tamil Nadu Tax on Entry of Motor Vehicles into Local Area Act, 1990.