2020 (3) TMI 249 - HC - Indian Laws

Demand of Motor Vehicle tax based on local price of similar vehicle - HELD THAT - This Court is not in a position to accept the contentions of the respondents that the figure shown by the manufacturer in the web portal, could be the legal basis to simply discard the actual figure that is based on the purchase invoice by the dealer, from where the owner of the car had purchased the car. In the instant case, the respondents do not have a case that Ext.P-1 invoice is in any manner manipulated or that the figures shown therein are not inclusive of the Value Added Tax or duties etc, or that the dealer has given by rebate to the petitioner, etc. This Court is of the considered view that the above said stand of the respondents that they can accept motor vehicle tax only at the rate of 21% of the figure shown by the manufacturer in the web portal, etc cannot be accepted. Of course, in a case where the respondents have a doubt about the genuineness of the figures shown in the purchase invoice, certainly they are entitled to conduct appropriate enquiry to find out whether there is manipulation, etc. But, in a case where the figures shown in the purchase invoice are not in any manner manipulated, and is the genuine figures shown therein by the dealer in the purchase invoice, and the respondents do not have a case that the said purchase value is not inclusive of VAT, GST or other taxes, duties etc, as envisaged in the 2nd limb of the operative portion of Sec.2(e) of the Kerala Motor Vehicle Taxation Act, 1976, or that the figure is on the basis of discount or rebate given by the dealer to the registered owner, etc, or that the car has been purchased from a foreign country, or that the car has been obtained not on the basis of purchase, and therefore it's purchase value is not known on account of non availability of the invoice. The competent authority among the respondents, more particularly the 1st respondent shall immediately accept motor vehicle tax of the petitioner's car at the rate of 21% of the purchase value as shown in the invoice, and thereafter, the 1st respondent shall forthwith grant permanent registration to the petitioner's vehicle - Petition disposed off.

Issues Involved:
1. Determination of Motor Vehicle Tax based on the purchase value as per the invoice versus the local price of a similar vehicle.
2. Legality of using centralized software (Parivahan Seva) for tax calculation and vehicle registration.
3. Applicability of the Kerala Motor Vehicle Taxation Act, 1976, in determining the motor vehicle tax.

Issue-wise Detailed Analysis:

1. Determination of Motor Vehicle Tax:
- The petitioner purchased an Audi Q7 for ?63,40,000 as per the invoice issued by a dealer in Madhya Pradesh. The petitioner contended that the motor vehicle tax should be 21% of the purchase value shown in the invoice.
- The respondents argued that the tax should be calculated based on the local price of a similar vehicle, which is ?79,99,999, as per the 2nd proviso to Sec.2(2) of the Kerala Motor Vehicle Taxation Act, 1976.
- The court held that the tax should be calculated based on the purchase value shown in the invoice, as per Sec.2(e) of the Kerala Motor Vehicle Taxation Act, 1976, which defines "purchase value" as the value shown in the purchase invoice inclusive of VAT, GST, and other taxes.

2. Legality of Using Centralized Software for Tax Calculation:
- The respondents argued that the tax calculation and vehicle registration must be done through the centralized software "Parivahan Seva," which uses the value provided by the manufacturer.
- The court found this argument untenable, stating that it would amount to rewriting the provisions of the Kerala Motor Vehicle Taxation Act, 1976. The court emphasized that the state law takes precedence, and the purchase value as per the invoice should be the basis for tax calculation.

3. Applicability of the Kerala Motor Vehicle Taxation Act, 1976:
- The court reiterated that the Kerala Motor Vehicle Taxation Act, 1976, clearly defines the purchase value and the method of tax calculation. The respondents' reliance on the centralized software and the Union Government's letter was found to be in conflict with the state law.
- The court emphasized that any deviation from the state law would be illegal and ultra vires. The state law mandates that the tax should be 21% of the purchase value as shown in the invoice, and not based on the manufacturer's value in the software.

Judgment:
- The court ordered that the respondents must accept the motor vehicle tax based on 21% of the purchase value as shown in the invoice and grant permanent registration to the petitioner's vehicle.
- The court also addressed a similar case (WP(C).No.32404 of 2019) involving a demo car purchased from a dealer in Mumbai. The court applied the same legal principles and directed the respondents to accept the tax based on the invoice value and grant registration.

Conclusion:
The court concluded that the motor vehicle tax should be calculated based on the purchase value shown in the invoice, as per the Kerala Motor Vehicle Taxation Act, 1976. The use of centralized software for tax calculation cannot override the provisions of the state law. The respondents were directed to comply with the state law and process the registration accordingly.

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