TaxTMI 
TaxTMI 
2019 (8) TMI 821
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....A JAMES, GP, SMT.M.M. JASMIN GP JUDGMENT Heard Sri Bechu Kurian, the learned Senior Counsel and Sri M. Ajay, Sri Bhagavat Singh, Dr. Sebastian Champappilly the learned counsel for the petitioners and Mr. N. Venkitaraman, the learned Senior Counsel for the respondents. 2. The learned counsel appearing for the parties, keeping in view the similarity of writ prayers in this batch of writ petitions, have treated WP(C) Nos.33231, 29183, 24482, 25170 and 1824 of 2018 as the lead Writ Petitions, referred to the pleadings and documents in these writ petitions and canvassed their respective prayers. The learned counsel Sri Bechu Kurian, appearing for the petitioner in WPC No.33231 of 2018, Mr.M.Ajay, Mr.Bhagavath Singh and Dr.Sebastian Champappilly, the learned counsel for the petitioner in WPC No.29183 of 2018 and other two cases have made detailed arguments, and the other counsel appearing in companion writ petitions have adopted their arguments. The counsel have further stated that the consideration and reference to pleadings in the writ petitions referred supra would be sufficient for disposing of WPC No.33231 of 2018 and the companion batch of writ petitions. 3. In the inst....
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....ses bearing No.105, ECR Main Road, Chinnakalapet, Puducherry. The petitioner received Ext.P9 notice from the office of fifth respondent. Ext.P9 notice is sent to the residential address of the petitioner in Kottakkal, Kerala. The purport of Ext.P9 notice is that PY-01/CR-50 is used or kept for use in the State of Kerala for more than thirty days without intimating registering authority under Section 49 of the Act 1988 and Rule 99 of Rules 1989. Ext.P9 notice further states that the petitioner, a resident of Hill View Residency, Thekkumpuram, Kottakkal, Kerala, ought to have, under Section 40 of Act, 1988 registered PY-01/CR 50 in the office of RTO, Malappuram instead of registering PY-01/CR 50 in the office of ARO, Puducherry. The motor vehicle tax payable on PY- 01/CR 50 ought to have been paid only under the provisions of Act 1976. The temporary registration as well as registration in Ext.P4 are shrouded by false and forged documents showing address of residence or place of business in Puducherry, though the petitioner is a normal resident of Kerala. The registration of vehicle in Ext.P4, by reference to alleged forged documents, is penal in nature and punishable under Section 44....
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....at where a motor vehicle registered in one State has been kept in another State for a period exceeding twelve months the owner of the vehicle shall apply to the Registering Authority along with RC and another document specified therein within whose jurisdiction the vehicle then is for the assignment of a new registration mark. Rule 54 of the Rules 1989 provides that such application shall be made in Form 27 along with NOC in Form 28 and prescribed fee within a period of thirty days from the date of expiry of twelve months. As regards levy of tax, Section 3 of Act 1976 specifically empowers the State to levy the same on every motor vehicle used or kept for use in the State at the rate specified for such vehicles in the Schedule. ..Based on the above provisions the following instructions are issued with immediate effect: 1. All Regional Transport Officers are directed to constitute a team of officers under RTO check the other State registered vehicles plying in their jurisdiction especially Puducherry registered and issue notice to vehicle owner, if defaulted vehicle owner is willing to pay tax by registering the motor vehicle in Kerala. Tax shall be collec....
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....ed as directed above, further proceedings for realization of the amounts due in respect of the vehicle shall be deferred. The petitioner shall appear before the fourth respondent for hearing on 25.4.2018." 4.4 Thereafter Ext.P13 additional reply was given by petitioner, resulting in Ext.P14 order dated 6.8.2018 made by the fourth respondent. The operative portion of the order dated 6.8.2018 reads as follows: "The Registered Owner had appeared for personnel hearing on 2.8.2018 and he had failed to produce any substantiating evidence to prove the given address is genuine. As per questionnaire filed by him has properly as are not Puduchery address proof and also he had failed to produce Ration card, Passport or Adhar card for supporting to establish his given address proof at Puduchery. The lease deed made only on 16.11.2017 between AJ Hashif, S/o Abdul Jabbar Residing at No.105, I ECR Main Road, Chinnakalapet, Near Baba Temple Pondichery 605014 after the vehicle registration at Puduchery and also the GST registration certificate issued from 17.9.2017, it is just before the Registration of vehicle for evading higher rate of Kerala State road tax. An enquiry was conducted t....
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....urged by the counsel for petitioner, are substantially same, for ensuring brevity, the grounds and the arguments are adverted to little later in this judgment. WP(C) No.33231 of 2018 5. Sabu Johny, Managing Director of M/s EVM Premier Cars India Pvt. Ltd. is the petitioner. The petitioner prays for a writ declaring Section 3(6) of Act 1976 as ultravires, 'Act 1976' and to quash Ext.P3 notice as illegal and beyond the jurisdiction of respondents. The petitioner, consequent to the above reliefs prays for a declaration that PY-01-CR 5500 is not required to be registered in the State of Kerala or pay vehicle tax under Act 1976. 5.1 M/s EVM Premium Cars India Pvt. Ltd., is a company dealing with sale of premium cars in a few different places in India, including the Union Territory of Puducherry. M/s EVM Premium Cars India Pvt.Ltd., it is averred has a functional branch at Puducherry. Ext.P1 is the certificate issued by the Labour Officer under the Puducherry Shops and Establishment Rules, 1964 in favour of M/s EVM Premier Cars India Pvt. Ltd. The petitioner purchased a luxury car Porsche 718 (Boxster) Model under Ext.P2. The petitioner claims that Porsche 718 (Boxster) ....
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....ection 3(6) of the Act 1976 seeks to impose one time tax on owners registered outside the State. It is to be noted that as per Sec 47 of Act 1988 the time for keeping a vehicle registered in other States is 12 months, but as per the Taxation laws the same is 30 days. Therefore Section 3(6) of Act 1976 which contemplates 30 days, is repugnant to the Central Act i.e. the Act 1988. Section 3(6) of Act 1976 being repugnant to Act 1976 is thus void and illegal. 5.4 Section 40 of Act 1988 requires the owner of a motor vehicle to register the vehicle in a place where he has residence or place of business, and where the vehicle is normally kept. Section 46 in tune with Article 19(1)(d) of the Constitution of India, provides that a motor vehicle registered in any State should not be required to be registered elsewhere in India and that a registration certificate issued shall be effective throughout India. Therefore it is impermissble to compel a petitioner to obtain fresh registration or to remit motor tax in the State. 5.5 The use of the words "used" or "kept for use" in the State cannot be interpreted or constructed to mean that the State Government is empowered to impose tax as per....
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....ons, why the petitioner is not under any obligation to pay the vehicle tax demanded through Exts.P5 and P8. Fourth respondent issued Ext.P10 calling upon the petitioner to pay a sum of Rs. 12,34,011/- towards motor vehicle tax. The operative portion of Ext.P10 reads as follows: "For the above reasons, the address for registration of the vehicle at Puducherry is found to be incorrect. As per Section 40 of the Motor Vehicles Act, the petitioner is liable to pay tax from the date of registration of the said vehicle at Puducherry, i.e., 31.01.2017. As per the invoice the cost of the vehicle is Rs. 61,70,051/-. Hence the tax of the said vehicle, i.e., Rs. 12,34,011/- being 20% of the cost, and equivalent tax along with interest is to be deposited in cash/DD within seven days or Revenue Recovery steps shall be initiated." 6.1 The petitioner was further called upon through Ext.P19 order as follows: "5. If the Puducherry registered Vehicles are found plying regularly in Kerala violating rules, concerned RTO will initiate necessary action. If the temporary registration is taken in Kerala on a fake address by forgery (section 463 IPC) or making false document (section 46....
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....shna Pillai, aged 66 years, Krishna Kripa, Thekkumbagam, Thripunithura, Ernakulam is the petitioner -a citizen of India-but does business in Sulthanate of Oman. The petitioner states that he has business interests in the States of Kerala and Tamilnadu. The petitioner is the owner of 2011 model Benz 350 CDIL motor car with registration No.PY-01-BL-707. Ext.P1 is the registration certificate issued under Act 1988 by the Assistant Registrar Officer, Puducherry. The fourth respondent, through Ext.P2 show cause notice dated 5.11.2017 called upon the petitioner to appear before the fourth respondent to explain or reply to the allegations referred to in Ext.P2 notice. The gist of the allegations in Ext.P2 notice is that the petitioner under Ext.P1, in contravention of Sections 40 and 49 of Act 1988, registered the vehicle in Puducherry and plying the vehicle in State of Kerala particularly without paying vehicle tax. The documents relied on by the petitioner for the registration of vehicle in Puducherry are either false or forged. The fourth respondent from the information he possesses about the use of vehicle, the place of stay of petitioner and also for verification whether the vehicle ....
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....oner. Ext.P2 notice was issued calling upon the petitioner to produce the certificate of registration and proof of address of petitioner within seven days. Ext.P3 show-cause notice was issued for obtaining registration on forged documents and thereby defrauding the State exchequer in payment of vehicle tax. The petitioner did not appear in person or responded to the notices. On enquiry by the respondents or their subordinate officers it was noted that the vehicle was plying in the State for more than twelve months, which is evidenced by the check report, produced as Ext.R3(a). Pursuant to the report (Ext.R3(b)) of Motor Vehicle Inspector, raised demand towards vehicle tax amount to Rs. 15,80,000/-, being 20% of purchase value, was issued in Ext.R3(c). Hence the respondents pray that there is no merit in the writ petition and the writ may be dismissed. WPC 25170/2018 9.1 On receipt of report of that registration of premium motor cars at Puducherry is undertaken for escaping payment of applicable rate of road tax in Kerala, the Motor Vehicles Department prepared a list of such vehicles for enquiry. The Enquiry Officer with regard to vehicle no.PY-01-CR-1110 referring to inspect....
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....ble to be dismissed. WPC No.24484 of 2018 9.4 The Transport Commissioner, Thiruvananthapuram noted that luxury vehicles are still being registered in Puducherry with fake temporary/permanent residential or business address and vehicles are plying or kept for use in the State of Kerala in violation of the provisions under Act 1988 and Act, 1976 in order to avoid tax payment in State of Kerala at the time of registration which is higher than the rate in Puducherry. 9.5 The petitioner is the owner of vehicle No.PY-01-CP-0167 registered with the address Joseph K.A., 16, Pallavan Street, JVS Nagar, Nellithope, Puducherry. A registered letter [Ext.R4(a)] sent to the petitioner returned with the endorsement 'no such addressee'. The authorities sent Exts.R4(b) and R4(c) show cause notices to petitioner on omissions noted in the registration and payment of vehicle tax. The reply given by petitioner was not sufficient for the proof of genuineness of the address given with Puducherry. 9.6 It is submitted that the motor vehicle inspector conducted an enquiry and tax demand of Rs. 12,34,011/- (20% of the purchase price) vide Exts.R4(d) and R4(e). The respondents have referre....
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.... of Section 3(6) of Act 1976. 10.2 Without prejudice to the above substantial grounds of challenge, the petitioners complain against application of amended Annexure III to schedule of Act 1976, retrospectively, i.e. to cases if at all liability to pay vehicle tax is established for use or keeping for use prior to 1.4.2018. The levy ought to be contemperaneous but the amendment to Annexure III has no retrospective effect. 10.3 It is also urged that the exemption granted in SRO No.878/75 relieves the vehicles registered outside State of Kerala from paying vehicle tax. The sum total of petitioners' case is that the vehicles bearing Puducherry registration have right to ply on the roads of Kerala State without re-registration under Chapter IV of Act 1988 paying vehicle tax under Act, 1976. 11. The prayers in the batch of Writ Petitions are categorised as under: a) Section 3(6) of the Act 1976 is challenged as unconstitutional and ultravires Act 1976. b) Show cause notices issued for alleged illegal or fraudulent registration in Puducherry and proposing vehicle tax under Act, 1976 on petitioners is illegal and without jurisdiction. (c) Order....
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....once the vehicle is duly registered, further registration or reregistration of vehicle in any other State does not arise, except for purposes stated in Secs.47 and 49. Chapter IV of Act 1988 confers discretion on the owners of vehicles for registration at a place of their choice and the liberty includes both permanent and temporary residence or place of business. (V) The registration of vehicle is sine qua non for payment of motor vehicle tax. Therefore, one time tax needs to be paid at the time of registration of vehicles and in the instant writ petitions one time tax has already been paid in the Unnion Territory of Puducherry. Therefore, the respondents cannot, for the purpose of Act 1976, levy one time tax again on the subject vehicles. The payment of tax in the State of Kerala arises only in the event of reregistration of the vehicle and not when the vehicle enters State of Kerala for short visits. In other words the vehicle is not used or kept for use in Kerala to attract any incidence under Section 3(1) of Act 1976. (VI) The words in Section 3(1) of the Act 1976, viz. 'used' or 'kept for use' in 1976 Act are inextricably linked with registration of m....
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.... business and free movement. (XVI) The orders passed against the petitioners either determining tax liability or calling upon the petitioner to register vehicles in State of Kerala are perverse, the conclusions recorded therein are based on material collected behind the back of the petitioners and the enquiry conducted by the respective registering authorities is perfunctory, lopsided and hence are liable to be set aside. 13. Sri N.Venkataraman, the learned Senior counsel appearing for respondents has argued the following points. (i) The description of petitioners in most of the writ petitions shows that the petitioners are residents of State of Kerala. Writ Petition is not filed by a non-resident of State of Kerala impugning the action of the respsondents. This explains the reasons viz. residents of Kerala for the sake of registration are showing their residence/business in Puducherry, getting the vehicles registered and paying token tax in Puducherry and by referrring to payment of such token tax, vehicle tax legitimately payable in State of Kerala is evaded. (ii) The petitioners with a view to evade legally payable vehicle tax for using the roads of....
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...., 1976 was enacted by the State legislature in terms of Entry 57 of List II. Act 1988 Chapter IV of Act 1988 deals with registration of vehicles and does not deal with vehicle tax payable by the owner. The tax obligation in State of Kerala arises under Act 1976. The respective enactments operate in parallel spheres vis-à-vis a vehicle and do not over lap in any manner or Act 1988 provides guiding principles on taxing power of State Legislature. (vi) Section 39 of Act 1988 is mandatory and prohibits any person from driving any motor vehicle and also that no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place unless the vehicle is registered in accordance with Chapter IV of Act 1988 unless or otherwise the registration certificate is either cancelled or suspended. Therefore, the permanent registration or temporary registration of a vehicle is absolutely mandatory to enable a vehicle to come out of the showroom and driven on road, public place etc. The registration of a vehicle satisfies one of the limbs of statutory obligations viz. under Sections 39, 40 and 41 of Act 1988 but not the tax liability under Act 1976. (vii)....
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....e for Sec.40 of Act 1988 and another for Sec.3 of Act 1976, as in the present batch of cases where registration is effected in Puducherry, but vehicle is used in State of Kerala without corresponding vehicle tax liability. (x) There is no conflict between Chapter IV of Act 1988 and Section 3, particularly, section 3(6) of Act 1976. The petitioners, if fail to satisfactorily show to the notices issued by the respondents that the respective vehicles are not used or kept for use in the State of Kerala the petitioners are under obligation to pay vehicle tax under Act 1976. The luxury vehicles or, for that matter, any non-transport vehicle does not have absolute right to ply in the State of Kerala without paying applicable vehicle tax under Act 1976. The thirty days' period stipulated in Section 3(6) of Act 1976 protects the reasonable free movement of a vehicle from one State to another State. The levy and the demand of vehicle tax on a vehicle arises, when the vehicle is used or kept for use beyond thirty days. The construction or interpretation of Act 1988 and Act 1976, now canvassed by the petitioners, if is accepted by the Court, then Entry 57 of list II is fully enjoy....
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.... the roads of Kerala for commuting from one place to another place and the authorities are presuming that the vehicles are used or kept for use in the State and that if the use is beyond 30 days, are insisting on registration of vehicles in the State of Kerala and calling upon payment of one time tax under Act 1976. 16. As per Section 2(28) 'motor vehicle' or 'vehicle' means any mechanically propelled vehicle adopted for use upon roads whether power of propulsion is transmitted thereto from an external or internal source and includes a chasis to which a body has been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adopted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimetres. 16.1 Sec.2(47) of Act 1988 defines Transport Vehicle as a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. 16.2 Section 3(6) of Act 1976 refers to non-transport vehicles registered in any state other than State of Kerala. Therefore, the argument o....
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.... of law rather than the form in which the provision is projected by the parties. 19. The petitioners have raised a few substantial grounds against the impugned orders made by the respondents and have incidentally attempted to persuade this Court to look at the ambiguity in Section 3(6), and also that the abuse of power is writ large in the impugned action. These arguments stand on a different footing viz. one testing the legality of orders impugned in the writ petition and another vires of Sec.3(6). Therefore this argument does not assist the petitioners against their principal challenge, viz. that the petitioners are not coming under the tax liability of Act 1976, raised in the writ petition. 20. It is well established that the possibility of abuse of a statute otherwise valid does not implore any invalidity as held by Apex Court in Union of India v Elphinstne Spn. & Wvg.Co.Ltd. 2001(4) SCC 139 Conversely a statute which is invalid as being unreasonable cannot be saved because it is being administered in a reasonable manner. See Collector of Customs, Madras v Nathella Sampathu Chetty AIR 1962 SC 316. Therefore the writ prayers depend on consideration of the issues fram....
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....ds the law relating to motor vehicles. This has been amended several times to keep it up to date. The need was, however, felt that this Act should, now inter alia, take into account also changes in the road transport technology, pattern of passenger and freight movements, developments, of the road network in the country and particularly the improved techniques in the motor vehicles management. 2. Various Committees, like, National Transport Policy Committee, National Police Commission, Road Safety Committee, Low Powered Two - Wheelers Committee, as also the Law Commission have gone into different aspects of road transport. They have recommended updating, simplification and rationalization of this law. Several Members of Parliament have also urged for comprehensive review of the Motor Vehicles Act, 1939, to make it relevant to the modern - day requirements. 3. A Working Group was, therefore, constituted in January, 1984 to review all the provisions of the Motor Vehicles Act, 1939 and to submit draft proposals for a comprehensive legislation to replace the existing Act. This Working Group took into account the suggestions and recommendations earlier made by various bodies and institu....
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....ublic place or in any other place unless the vehicle is registered in accordance with this chapter and that the certificate of registration of the vehicle has not been suspended or cancelled. Section 39 further prescribes that no person shall drive any motor vehicle unless the vehicle carries registration mark displayed in the prescribed manner. Therefore the prescription or prohibition under Sec.39 is that unless a motor vehicle is registered, it shall not be driven in any public place or any other place and no owner of motor vehicle causes or permits the vehicle to be driven in any public place or in any other place unless it is registered in accordance with chapter IV. Section 40 Registration, where to be made. - Subject to the provisions of section 42, section 43 and section 60, every owner of a motor vehicle shall cause the vehicle to be registered by a registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept. deals with the place where registration of vehicle could be carried out and completed. According to Section 40 every owner of a motor vehicle shall cause the vehicle to be registered by a registering authori....
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.... made in Form 20 before the registering authortiy, and is accompanied by proof of address by enclosing one of the documents referred to in the Rule 4. 20.3 Form 20 assists in understanding the literal meaning of Section 40 of Act 1988 and particularly the words used therein viz cause the vehicle to be registered by a registering authority in whose jurisdiction he i.e, owner has the residence or place of business where the vehicle is normally kept. (emphasis added) Form 20 (See Rule 47) APPLICATION FOR REGISTRATION OF A MOTOR VEHICLE (To be made in duplicate if the vehicle is held under an agreement of Hire- Purchase/Lease/Hypothecation and duplicate copy with the endorsement of the Registering Authority to be returned to the Financier simultaneously on Registration of motor vehicle) To The Licensing Authority, ..................... ........................ 1. Full name of the person to be registered as Registered owner Son/wife/daughter of .................................... 2.Age of the person to be registered as registered owner ........................ 3. P....
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....nbsp;54(1) 76(1) And 78(1) (b) Motor cycle Fifty rupees (c) Three wheeler/Quadricycle/ Light Motor Vehicles: Three hundred rupees " i) Non transport;" Six hundred rupees " ii) Transport" One thousand rupees (d) Medium goods vehicle One thousand rupees (e) Medium passenger motor vehicle One thousand rupees (f) Heavy goods vehicle One thousand and five hundred rupees (g) Heavy passenger motor vehicle One thousand and five hundred rupees (h) Imported motor vehicle Five thousand rupees (i) Imported motor cycle Two thousand and five hundred rupees (j) Any other vehicle not mentioned above Three thousand rupees Note 1: Additional fee of two hundred rupees shall be levied if the certificate of registration is a smart card type issued or renewed in Form 23A Note 2: In case of delay in applying for renewal of certificate of registration, an additional fee of three hundred rupees for delay of every month or part thereof in respect of motor cycles and five hundred rupees for delay of every month or part....
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....ate for a period exceeding 12 months. The owner of the vehicle shall within such period and in such form with such particulars as prescribed by the Central Government apply to the registering authority within whose jurisdiction the vehicle is kept for the assignment of a new registration mark and shall present the certificate of registration to the registering authority. Section 47 fastens an obligation or a duty on the owner of a vehicle already in one state, who kept such vehicle for 12 months in another state to take registration at the place where the vehicle is kept. The words which have bearing in comprehending when the obligation to seek change of registration arises are "has been kept". Further, the legal duty is on the registered owner to get the registration changed to the area where the vehicle is kept and used normally. The non-State registered vehicle if is kept for twelve months, as alleged in this case i.e., in State of Kerala, then the obligation to register the vehicle where it is kept as per Section 40 arises and the owner of vehicle then ensures consistency between registration and use of vehicle. This is treated re-registration of vehicle at the place where the ....
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....uthority. (7) Nothing in sub-section (1) shall apply where the change of the address recorded in the certificate of registration is due to a temporary absence not intended to exceed six months in duration or where the motor vehicle is neither used nor removed from the address recorded in the certificate of registration. deals with change of residence or place of business. The legal duty fastened by Section 49 on the owner of a registered vehicle is that when the owner of a motor vehicle ceases to reside or ceases to have his place of business at the address recorded in the certificate of registration of the vehicle, which address again is relatable to the voluntary details furnished by the registered owner in form 20 of Rules 1989, the owner intimates in such forum accompanied by such document as prescribed by the Central Government addressed to the registering authority by which the certificate of registration was issued or if the new address is within the jurisdiction of another registering authority to that other registering authority and shall forward the certificate of registration to the registering authority or to the other registering authority, as the case may be, in order....
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.... registration. (4) If a registering authority is satisfied that a motor vehicle has been permanently removed out of India, the registering authority shall cancel the registration. (5) If a registering authority is satisfied that the registration of a motor vehicle has been obtained on the basis of documents which were, or by representation of facts which was, false in any material particular, or the engine number or the chassis number embossed thereon are different from such number entered in the certificate of registration, the registering authority shall after giving the owner an opportunity to make such representation as he may wish to make (by sending to the owner a notice by registered post acknowledgement due at his address entered in the certificate of registration), and for reasons to be recorded in writing, cancel the registration. (6) A registering authority cancelling the registration of a motor vehicle under section 54 or under this section shall communicate such fact in 77 writing to the owner of the vehicle, and the owner of the vehicle shall forthwith surrender to that authority the certificate of registration o f the vehicle. (7) A registering authority making an or....
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.... those commissions and omissions fall under Sub-section (5), could not have assumed jurisdiction of any registering authority stated in Subsection (3) and cancel existing registration or direct registration of vehicle in State of Keral. Therefore the argument of petitioners that cancellation of registration of vehicles or direction to register vehicle in State of Kerala is tenable and correct. 23.2 The circumstance of Sub-Section (5) if are established even then the authority who issued the registration certificate gives opportunity to the vehicle owner and for reasons recorded in writing cancels the registration. Therefore the assumption of jurisdiction in the manner impugned in the writ petitions under Sections 47 and 49 by respondents is arbitrary and beyond their jurisdiction. The direction now issued by the impugned orders may result in individual hardship to bona fide user of vehicle in both the States. This statement is explained by elaborating that the orders impugned in the writ petitions if are obeyed by the owners and subsequently the owners/petitioners use or keep the vehicles for use in Puducherry, then the allegation pointed out by respondents herein could be raise....
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.... of Chapter IV could not be understood as conferring a right to use or keep for use a vehicle contrary to a State law. 26. Section 177 provides for general provision for punishment of offences. Section 177 refers to whoever contravenes any provision of the Act or of any rule, regulation or notification made there under shall, if no penalty is provided for the offence be punishable for the first offence with the fine which may extend to Rs. 100 and for any second or subsequent offence with fine which may extend to Rs. 300/-. The law as it stands provides for fine for a violation coming under Chapter IV as well. A few of the conclusions recorded in the orders impugned in the writ petitions do not conform to above discussion and hence such conclusions are held as beyond the power or jurisdiction of respondents. 27. Act 1976 Entry 57 of List II reads thus: Entry 57: Taxes on vehicles whether mechanically propelled or not suitable for use on roads including tramcars subject to the provisions of Entry 35 of List III. 27.1. The learned counsel appearing for the petitioners apart from arguing on the vires of Section 3(6) of Act 1976 have made a few submissions on....
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....and 11(i) of the schedule, there shall be levied, from the date of purchase of the vehicle, one time tax at the rate specified in Annexure I, at the time of first registration of the vehicle and thereafter tax shall be levied at the time of renewal of registration of such vehicle or on the expiry of the life time tax already paid at the rate specified in the Schedule as per fifth proviso to sub section (1) of Section 4. Provided also that in respect of old motor cycles specified in item (1), old three wheelers specified in item (2) and old motor cars specified in item 11(i) of the schedule, there shall be levied a tax in advance for a period of five years after the expiry of the period in respect of which tax has been paid at the rate specified in Annexure II and for new goods carriages specified in item (3) (i)(a) to 3(i)(e) and (3)(ii) (a) to (3) (ii)(e), new autorikshas specified in item 7(i)(a) and 7(i)(aa) and new e-rickshaws specified in item 7(i)(ab), there shall be levied a tax in advance for a period of five years at the rate specified in Annexure II at the time of first registration of the vehicle and thereafter tax shall be levied for five years or for one year at the ra....
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....d in any State other than in the State of Kerala and entering the State of Kerala and staying therein, the tax shall be payable from the date of entry till the end of the quarter at the rate specified for such vehicles in the Schedule. Provided also that in the case of transport vehicles registered in any State or Union Territories other than the State of Kerala and found operating in the State of Kerala without remitting tax due to Kerala, a tax equal to double the amount of tax specified in the Schedule for such vehicles shall be levied. (6) In the case of non-transport vehicles registered in any State other than the State of Kerala and entering into the State of Kerala and staying therein for a period exceeding 30 days, the levy of tax shall be at the rate specified in Annexure III of the schedule. (7) In the case of motor vehicles brought to the State from any other country for temporary use in the State, a short term tax shall be levied at the rate specified in Annexure IV. (8) In the case of motor vehicles in respect of which any reciprocal arrangement relating to taxation has been entered into between the Government of Kerala and any other State Government, the levy of tax s....
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....with levy of tax at the rate specified in Annexure III of the schedule on a non-transport vehicle registered in any State other than the State of Kerala, but entering in Kerala and staying in Kerala beyond thirty days. Annexure III of schedule III is substituted by sections 4 and 6 of Kerala Finance Act, 2018 and the amended Annexure III is effective from 1.4.2018. The unamended and amended Annexure III have some bearing on the points under consideration and are excerpted. Unammended Annexure III Sl. No. Class of Vehicle Amount of Tax -(1) -(2) -(3) Period of stay exceeding 30 days and up to one year Period of stay exceeding one year 1 Motor Cycle and three wheeler 200 One time tax proportionate to the rate specified in Annexure I 2 Motor cars 1500 One time tax proportionate to the rate specified in Annexure I 3 Private Service Vehicles for personal use A. Passenger capacity up to 10 seats - for every passenger B Passenger capacity more t han 10 - for every passenger 300 500 ....
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....ment, the levy of tax shall, notwithstanding anything contained in this Act, be in accordance with the terms and conditions of such reciprocal arrangement: Provided that the terms and conditions of every such reciprocal arrangement shall be published in the Gazette and a copy there of shall be placed before the Legislative Assembly of the State. (6) In the case of non-transport vehicles registered in any State other than the State of Kerala and entering into the State of Kerala and staying therein for a period exceeding 30 days, the levy of tax shall be at the rate specified in Annexure III of the Schedule. The Court is interpreting a taxing statute, its scope and ambit of application, when the incidence of tax arises etc.. 27.6 At this stage, it is useful to bear in mind the dictum laid down by Apex Court in State of Gujarat v Kaushikbai K. Patel, Sharma 2000 (5) SCC 615, Transport Corporation v Government of A.P. 2002 (2) SCC 188, Hardev Motor Transport v State of M.P. 2006 (8) SCC 613 and Hoechst Pharmaceuticals Ltd. v State of Bihar 1983 (4) SCC 45. 27.7 In Hoechst Pharmacuticals Ltd, the Supreme Court w....
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....e alternate argument of petitioners is that at any rate for twelve months from the date of registration (vide Section 47 of Act 1988) the petitioners cannot be compelled to obey any obligation under Act 1976. 27.9 Vehicle tax is held to be regulatory and compensatory in nature. The State legislature is competent to levy and collect tax on motor vehicles. Section 3(6) of Act 1976 curtails or restricts the privilage of use for thirty days from entry available under Chapter IV of Act 1988 to a non-State registered vehicle and thereafter obligates the vehicle owner to pay tax under Section 3(6) as per Annxure III. According to petitioners the non-State registered vehicle has twelve months period for changing the registration etc, and in the meantime, the respondents could not have demanded vehicle tax from petitioners. A limb of this argument is already examined supra and the right and privilage envisaged under Sections 47 and 49 of Act 1988 are stated as limiting to registration alone and not concerned with vehicle tax obligation. 27.10 Apex Court in Bolani Ores Ltd. v Orissa 1974(2) SCC 777 dealing with the legality of levy of tax under Tamilnadu Motor Vehicle Taxation Act in p....
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....apted for use on roads", while making Part I applicable to motor vehicles." 27.11 It is one aspect of consideration, if Act 1988 has provided for the principles on which taxes on vehicles are levied i.e. by the State Legislature under Entry 57 of List II. The Parliament through Act 1988 provided what is argued as guiding principles on which taxes on such vehicles are to be levied, then such guiding principles would have been kept in perspective by the other constituents of our Federal structure and there could have been uniformity in the vehicle taxation in all the States. It is assumed that the Parliament for valid, functional and practical reasons did not provide for guidance on vehicle taxation to States under Entry 57. At this stage the other Entry viz 16 of List II, which deals with roadways etc, is excerpted. "Communications, that is to say, roads, bridges, ferries, and other means of communication not specified in List I; municipal tramways; roadways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles." and the States are obligated to provide for ....
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....ied in Annexure I, at the time of first registration of the vehicle and thereafter tax shall be levied at the time of renewal of registration of such vehicle or on the expiry of the life time tax already paid at the rate specified in the Schedule as per firth proviso to subsection (1) of section 4." 27.14 Second proviso deals with levy of tax on a new motor vehicle of any of the classes specified in items 1, 2, 6, 7(i)(b), 7(i)(c), 10(iii) and 11(i) of the Schedule and the tax is payable from the date of purchase of the vehicle. The rate of tax is specified in Annexure I. The latter portion of proviso deals with the payment of tax at the time of renewal of registration of such vehicle or on the expiry of the one time tax already paid at the rates specified in the Schedule. Combined reading of Schedule 1 and Annexure I, illustratively stated, creates the liability to pay life time tax in the State of Kerala as follows: "Schedule 1 - Motor Cycles (including Motor Scooters and cycles with attachment for propelling the same by mechanical power. ....... Annexure - I One Time Tax Sl. No. Class of Vehicle Rate of One Time Tax 1 2 2 A New ....
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....nable use or keeping for use these vehicles beyond thirty days as per Section 3(6) of Act 1976. Non- State registered vehicles are allowed as guest vehicles in State of Kerala for thirty days and stay of non-transport vehicles beyond thirty days, for the purpose of Section 3(6), is understood as vehicle used and kept for use in Kerala and vehicle tax as per Annexure III is payable. 29. The following decisions of the Supreme Court and this Court dealing with regulatory and compensatory levy is adverted to: Sharma Transport, represented by D.P. Sharma v. Government of A.P (2002) 2 SCC 188 and United States Lines Agency v. State of Kerala 1988 (1) KLT 259. 29.1 In Hardev Motor Transport referred to supra the Apex Court in paragraph no.12 of the said judgment has made the following observation. "The 1988 Act and the Rules made thereunder provide for a complete code. The matter relating to the imposition of tax, however, is provided for under the Statutes enacted by each State." 29.2 In United States Lines Agency, a Division Bench of this Court while interpreting Sections 3 and 5 of Act 1976, the Sections as stood then, on the construction of a fiscal statute held as f....
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....these burdens or charges upon persons or property or in other words, the process or means by which the taxing power is exercised. 30.2 A Tax is the means by which a burden primarily borne by the State is transferred to the citizen. The obligation may have relation to debt already incurred or it may be in anticipation, dependent on future contingencies. Three things are essential to a tax. First, the ascertainment of a sum certain or that can be rendered certain to be imposed on the collective body of tax payers; second, the legal imposition of that sum as an obligation on the collective body of tax payers. Third, an apportionment of said sum among individual tax payers so as to ascertain the part or share that each should bear Ramnath Aiyer's Advanced Law Lexicon. Vehicle tax is held as regulatory and compensatory tax collected on vehicle used or kept for use in a State. 30.3 The petitioners claim a right to use or keep for use their vehicles in State of Kerala without corresponding tax liability on their vehicles on the basis of its registration and payment of vehicle tax in Puducherry. This argument of petitioners is untenable and without merit. Section 3(1) is attracte....
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.... in the state, at the rate specified for such vehicle in the Schedule; Provided that no such tax shall be levied on a motor vehicle kept by a dealer in, or a manufacturer of, such vehicle, for the purpose of trade and used under the authorisation of a trade certificate granted by the registering authority. Provided further that in respect of a new motor vehicle of any of the classes specified in items 1,2,6,7(i)(b), 7(i)(c), 10(iii) and 11(i) of the schedule, there shall be levied, from the date of purchase of the vehicle, one time tax at the rate specified in Annexure I, at the time of first registration of the vehicle and thereafter tax shall be levied at the time of renewal of registration of such vehicle or on the expiry of the life time tax already paid at the rate specified in the Schedule as per fifth proviso to sub section (1) of Section 4. ***** 3(6) In the case of non-transport vehicles registered in any State other than the State of Kerala and entering into the State of Kerala and staying therein for a period exceeding 30 days, the levy of tax ....
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....sion militates against the discretion given by Chapter IV of Act 1988 to the owner of a vehicle which requires registration under Chapter IV of Act 1988. The reply of respondents is that fraud vitiates everything and an enquiry is necessitated into these alleged questionable registration made by Registering Authority - Pondicherry. Assuming that enquiry into these registrations of vehicles is warranted, the authorities of State of Kerala, upon enquiry, record that the very registration is vitiated then, it is considered appropriate that the respondents forward a report for action under Section 55(5) of Act 1988 to the registering authority of the other State on how fraud is played on those authorities. Hence the respondents herein i.e., Transport Department of State of Kerala and its officers do not have jurisdiction under Section 55(5) to cancel the registration effected and completed in Unnion Territory of Puducherry. This Court does not approve the stand of the respondents that they can direct registration under Section 40 and also cancel the registration effected under Section 55 of Act 1988. 31. Under Section 40 of Act 1988, two conditions are attracted for selecting place ....
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.... or one time tax without reference to the words used in Section 3(6), the same amounts to levying and collecting tax not only for the period kept but also for the period likely to be kept in the State. The distinction between Section 3(1) second proviso and Section 3(6) will have to be borne in mind while collecting vehicle tax, either one time tax or tax under Annexure III. The second proviso to Section 3(1) provides for collecting one time tax on a new vehicle where the registration is in the State of Kerala, the residence of the owner is in State of Kerala and the owner intends to use or keep the vehicle in State of Kerala. The liability under Section 3(6) arises on account of the vehicle being registered in another State but kept in State of Kerala beyond thirty days. The argument that Section 3(6) does not provide for incidence of tax is without merit. As already discussed Section 3(6) is not a stand alone provision but part of Section 3 which provides for levy of vehicle tax subject to an incident and corresponding liability on the owner. All the three elements are present in Section 3(6). 32.1. The exemption in the manner canvassed by the petitioners if is accepted, then ....
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....de only on 16.11.2017 between AJ Hashif, S/o Abdul Jabbar Residing at No.105, I ECR Main Road, Chinnakalapet, Near Baba Temple Pondichery 605014 after the vehicle registration at Puduchery and also the GST registration certificate issued from 17.9.2017, it is just before the Registration of vehicle for evading higher rate of Kerala State road tax. An enquiry was conducted through Asst. Motor vehicle Inspector of this office regarding the usage of this vehicle at Kerala vide reference 6th cited. It is revealed that this vehicle is kept in and used in Kerala State permanently and also the vehicle had violated speed regulation rules in Kerala State Roads several times as per report of Kerala Police Hi-tech cell and Motor Vehicles Dept. Camera surveillance system. It is also enough evidence showing that the vehicle has been using here in Kerala State. The vehicle had registered after submitting fabricated address proof at Puduchery for evading road tax of Kerala state. In registration certificate the permanent address shown as Managing Partner, Hill View, Thokkampara, Kottakkal, Malappuram which is under the jurisdiction of this office. The hypothecation agreement is held with HDFC Ban....
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....spondents. Therefore, in the writ petitions where orders passed by the respondents directing registration, payment of vehicle tax are challenged those order are set aside. The matters are sent back to respondents for fresh consideration and disposal in accordance with law. The challenge to show cause notices need not be entertained and ends of fair procedure are met by giving time to petitioners to file reply to show cause notice impugned in the writ petition within the time given by this judgment. 35. Therefore, the orders passed by the respondents and impugned in the writ petitions are set aside and matters remitted to respondents for consideration and disposal in accordance with law. In writ petitions filed challenging show cause notice the petitioner is given four weeks' time from the date of receipt of copy of this judgment to file explanation together with the documents on which the petitioner intends to rely upon against the proposed enquiry under Chapter IV of Act 1988 and that Section 3(6) of the Act is not attracted and secondly, that the period for which the tax is demanded is untenable etc. The respondents are under legal obligation to determine, as a fact, the r....