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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.
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