9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 821 - HC - Indian LawsLevy of Vehicle Tax - Vehicle registered in different state - Concurrent powers of center and state - Vires of Entries 57 and 35 of List II and III of Seventh Schedule of Constitution of India, the Motor Vehicles Act, 1988, The Central Motor Vehicles Rules, 1989, the Kerala Motor Vehicles Taxation Act, 1976 and the Kerala Motor Vehicles Rules - vehicle tax allegedly due and payable under Act 1976 is not paid or remitted to State of Kerala - case of the petitioner is that the petitioner is entitled or free to register the vehicle according to his choice, subject however to complying with the requirements of Section 40 of Act 1988. HELD THAT - The State legislature firstly is competent to legislate on Motor Vehicle Taxation and secondly authorised by Entry 16 to administer roadways etc. In the process, the State has to not only lay the roads but maintain the roads for general use and public good. It is this expenditure, to the extent the State decides, is realised through vehicle tax. In other words, Section 3 as a whole deals with regulatory or compensatory collection of amount by way of tax from the vehicles 'used' or 'kept for use'. The levy of vehicle tax being regulatory and compensatory, it is left to the wisdom of State Legislature to decide the taxes payable on vehicles. The petitioners have paid tax under Pondicherry Motor Vehicles Act, 1967 - the challenge to Section 3(6) as laid by petitioners could not be taken the logical conclusion. The registration fee or registration certificate cannot be understood as exonerating an incidence which as a matter of fact arises within the territorial State limits of a State in this case, State of Kerala under Entry 57 of List II read with Act 1976. As on date vehicle tax is left to the discretion of State Legislature and State Legislature is authorised to legislate on matters relating to vehicles used or kept for use in Kerala. Motor Vehicle Taxation Act, 1976 permits plying vehicles without the incidence of tax for a period of thirty days from the date of entry into State. The vehicle, if is kept in the State of Kerala beyond thirty days the incidence under Section 3(6) read with Schedule and Annexure III is attracted and vehicle tax payable under Section 3(6) of Act 1976. The registration of a non-transport vehicle and payment of registration fee under Act 1988 or payment of motor vehicle tax under a State legislature continues to be valid so long as the vehicle is kept and used in the State in which it is registered. These vehicles if enter State of Kerala and stay beyond the period stipulated by the State enactment, the vehicle is required to pay vehicle tax as per Section 3(6) read with Annexure III of Schedule of Act 1976. The impugned orders calling upon the petitioners to register the subject vehicles in State of Kerala and pay life tax are set aside as illegal, arbitrary and violative of principles of natural justice, the matters are restored to the file of respective Regional Transport Officer/ respondents for consideration and disposal by keeping in view the principles stated supra. Petition disposed off.
Issues Involved:
1. Validity and constitutionality of Section 3(6) of the Kerala Motor Vehicles Taxation Act, 1976. 2. Whether vehicles registered outside Kerala are exempt from paying vehicle tax in Kerala. 3. Whether registration and payment of vehicle tax in another state relieve the obligation to pay vehicle tax in Kerala. 4. Legality and validity of the show cause notices/orders/recovery proceedings issued by the respondents. Issue-wise Detailed Analysis: 1. Validity and Constitutionality of Section 3(6) of the Kerala Motor Vehicles Taxation Act, 1976: The court held that Section 3(6) of the Kerala Motor Vehicles Taxation Act, 1976 is within the competence of the State legislature and is not repugnant to Chapter IV of the Motor Vehicles Act, 1988 or ultra vires the Act. The court emphasized that the State legislature is authorized to levy taxes on vehicles used or kept for use in the State, and Section 3(6) is a valid legislative measure to prevent tax evasion by vehicles registered outside Kerala but used within the State. 2. Whether Vehicles Registered Outside Kerala are Exempt from Paying Vehicle Tax in Kerala: The court concluded that vehicles registered outside Kerala are not exempt from paying vehicle tax if they are used or kept for use in Kerala for more than thirty days. The court interpreted Section 3(6) to mean that non-transport vehicles registered in any State other than Kerala, upon entering and staying in Kerala for a period exceeding thirty days, are liable to pay tax as specified in Annexure III of the schedule. The court rejected the argument that compliance with the registration and tax payment in another state exempts the vehicle from tax liability in Kerala. 3. Whether Registration and Payment of Vehicle Tax in Another State Relieve the Obligation to Pay Vehicle Tax in Kerala: The court held that registration and payment of vehicle tax in another state do not relieve the obligation to pay vehicle tax in Kerala if the vehicle is used or kept for use in Kerala beyond the permitted period. The court clarified that the registration under Chapter IV of the Motor Vehicles Act, 1988, and payment of vehicle tax in another state allow the vehicle to be driven on public roads but do not exempt it from the tax liability under the Kerala Motor Vehicles Taxation Act, 1976, when used or kept for use in Kerala. 4. Legality and Validity of the Show Cause Notices/Orders/Recovery Proceedings Issued by the Respondents: The court found that the show cause notices and orders issued by the respondents were pre-meditated and lacked procedural fairness. The court emphasized that the respondents must provide the petitioners with all the material on which they rely and give a reasonable opportunity to respond. The court set aside the impugned orders directing registration and payment of life tax as illegal and violative of principles of natural justice. The matters were remitted back to the respondents for fresh consideration and disposal in accordance with the law. Summary: The court upheld the validity and constitutionality of Section 3(6) of the Kerala Motor Vehicles Taxation Act, 1976, and clarified that vehicles registered outside Kerala are liable to pay vehicle tax if used or kept for use in Kerala beyond thirty days. The court emphasized that registration and payment of vehicle tax in another state do not exempt the vehicle from tax liability in Kerala. The show cause notices and orders issued by the respondents were found to be procedurally unfair and were set aside, with the matters remitted back for fresh consideration.
|
