SREI Equipment Finance Pvt. Ltd. vs. Assistant Commissioner, Hyderabad, [2013] 66 VST 68 (AP).

Facts
The petitioner a company registered under the Companies Act incorporated in to carry on the business of financing and leasing for purchase of equipment and other infrastructure, machinery tohis customers. In the regular course of its business it had entered into an agreement dated May 8, 2008 with one M/s. V.P.R. Mining Infrastructure Private Limited for giving equipment and operating on lease to the said mining industries private limited whose registered office is based at Calcutta. Under the agreement, the petitioner provided the dumper trucks on lease, from its registered office at Calcutta to Andhra Pradesh. The department passed assessment order under the Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 (for short, “the Act”) and demanded entry tax on entry of dumpers inside the State.The contention of the petitioner was that though they were the owners of the three dumpers they are not exigible to tax under the Act. Inasmuch as it was their customer who had brought the said dumpers into the State ofAndhra Pradesh and merely because they continued to be the owners on account of the financial arrangement and contract entered into between their company and the customer they cannot be visited with the liability under the Act. The department did not accept the contentions of the Company and levied tax. The company filed writ petition before the Andhra Pradesh High Court against the said assessment order levying entry tax.

Held
Under section 3(2) of the Act, the tax is payable by the importer and it is the duty of the court to discover who is the importer for the purpose of section 3 of the Act. Section 3(3) of the Act elucidates that aperson who causes the entry of the vehicle into the local area for use or sale specially deemed to be the importer who is liable to pay the tax. In other words merely because an owner of the vehicle satisfied the definition as importer in the context of section 3 of the Act the word “importer” need not necessarily be the owner and in the context the importer has to be considered to be the person who is responsible or who causes the entry of the motor vehicle into any local area for useor sale.

The argument of the learned counsel for the respondent supporting the assessment to the effect that the petitioner being the owner and satisfying the definition of “importer” is the one who is liable to pay the tax was not accepted by the Court in view of the interpretation placed on section 3 of the Act which is the charging section.

The Court further held that the purpose of definition is limited and only to illustrate what is being defined. The definition by itself does not fasten the liability especially in the taxing statute. The expression which is used occurring in the main text of the statute in the context of the section has to be interpreted to find the true meaning. it was the lessee of the petitioner, viz., M/s. VPR Mining Infrastructure Private Limited who had brought the dumpers in question into the local area situated within the State for use and utilization. Applying section 3(3) of the Act to the facts of the case though the petitioner being the owner of the dumpers may satisfy the definition of “importer” yet for the purpose ofsection 3(3) of the Act, the liability to pay tax arises on the entry of the dumpers into the State and the liability gets fastened on the person who brings the same for use or sale into the State. In this case, the customer of the petitioner, M/s. VPR Mining Infrastructure Private Limited, has satisfied the definition of “importer” inasmuch as the customer is the one who cause the entry of goods inside the State and liable to tax. The High Court accordingly allowed the writ petition filed by the Company and set aside the impugned assessment order.