TMI Blog2019 (8) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs 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 instant batch of writ petitions, the issues for consideration arise under Entries 57 and 35 of List II and III of Seventh Schedule of Constitution of India, the Motor Vehicles Act, 1988 (for short Act 1988 ), The Central Motor Vehicles Rules, 1989 (for short Rules 1989 ), the Kerala Motor Vehicles Taxation Act, 1976 (for short Act 1976 ) and the Kerala Motor Vehicles Rules (for short the 'Rules 1989'). WP(C) No.29183 of 2018 4. Adattil Muhammed/the petitioner prays for a writ of certiorari to quash Ext. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w 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 IPC. The commissions or omissions noticed in this behalf against petitioner are punishable under Section 206 of Act 1988. Ext.P9 notice therefore called upon the petitioner to produce Ext.P4 registration certificate and documents in proof of residence or business at Puducherry. The petitioner was required to submit his reply on or before 15.12.2017. 4.2 The petitioner alleges that Ext.P9 notice is unfounded, baseless and unsustainable in law and fact. Ext.P9 or the tenor demeans and damages the reputation of pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 collected accordingly and registration effected. Direction shall be issued to vehicle owners to produce NOC from Original Registering Authorities and if the vehicle owner is out of station notice shall be posted on his/her residence and further action initiated under the Act and Rules. 2. In every DTC office a team of officers-MVI, AMVI, SS and one Clerk from DTC office- under RTO shall be constituted with immediate effect and they shall collect the details of vehicles permanently plying in Kerala but registered in Puducherry. 3. Sri Joy MVI, Nodal Officer, SSG shall col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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 regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) is purchased for use as a demo or trial car by the company not only for use in Puducherry but also at other places where the company has showrooms. Under Ext.P2 dated 4.10.2017, by referring to or in addition to such other documents which were filed before the Asst.Registering Authority, Puducherry, Porsche 718 Boxster was registered as PY-01 CR 5500 under Chapter IV of Act 1988. The petitioner alleges that Ext.P2 evidences registration of the vehicle and also payment of vehicle tax under the Puducherry Vehicle Taxation Act, 1967. The vehicle undertakes errands between Puducherry and Ernakulam, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 Act 1976 the moment a vehicle is kept in the State. Levy and imposition of tax can only be under authority of law. The levy and imposition of tax on a vehicle already registered is without authority of law, and is unconstitutional. In any event, Act 1976 will apply only to vehicles registered in Kerala but not to non-State registered vehicles. Petitioner's vehicle has not been registered in Kerala, no tax for the alleged stay in Kerala can be demanded or imposed. Likewise no coercive action could be taken by respondents against the petitioner Hence Ext.P3 is illegal and without jurisdiction. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 61,70,051/-. Hence the tax of the said vehicle, i.e., ₹ 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 464 IPC) or using as genuine a forged document (Section 471 IPC), steps shall be taken to forward a report to police authorities concerned. 6.2 The case of petitioner is that the petitioner did not ply the vehicle contrary to Act 1988 or Act 1976. The subject vehicle is not with the petitioner. The petitioner has not contravened any of the provisions under Chapter IV of Act 1988 or Section 3 of Act 1976. The petitioner hence prays for setting aside Exts.P8, P10 and all the consequential proceedings initiated including Ext.P19. Apart from the above objections, it is stated that upon the sale of ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent 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 which ought to have been registered in State of Kerala is registered in Unnion Territory of Puducherry and whether vehicle tax payable under Act 1976 is evaded, proposed to conduct enquiry against use of vehicle without propriety. 8.1 The 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. It is stated that no exception to Ext.P1 registration completed in Unnion Territory of Puducherry could be taken, as the procedure followed for registration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle Inspector, raised demand towards vehicle tax amount to ₹ 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 inspection dt. 22.01.2018 reported that the vehicle is owned by Ashok Kumar Bharatheeya, residing at Flat No.4A, RDS Avenue One, Near Passport Office, Panampilly Nagar, Kochi, and the vehicle is permanently used in Kerala. Hence notice demanding one-time tax applicable in State of Kerala was issued to petitioner. The petitioner had earlier approached this Court and the Court through judgment dated 21.03.2018 in W.P.(C) No.9752/2018 directed respondent to consider the explanation after hearing him and till such time further proceedings pursuant to demand notice was deferred. 9.2 The petitioner was heard and documents ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 ₹ 12,34,011/- (20% of the purchase price) vide Exts.R4(d) and R4(e). The respondents have referred to Automobile Transport Limited Rajasthan v State of Rajastan AIR 1962, SC 1406, Bolani Ores Ltd. V State of Orissa 1974(2) SC 777 and State of Tamil Nadu v M.Krishnappan 2005(4) SCC 53 in support of their stand that the action impugned in the writ petition is within their duty and function under Act 1988 and Act 1976. 9.7 The writ petitions are not maintainable in law or on facts and the writs are liable to be dismissed with costs. 10. The writ petitioners, in the cause title, admittedly have shown their place of residence/business in State of Kerala. The petitioners on account of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; 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) Orders directing registration of vehicles within the respective jurisdiction where the petitioners are residing in the State of Kerala and also directing payment of one time tax under Act 1976 as illegal, contrary to Act1988 and Act 1976. (d) Recovery proceedings initiated against petitioner for the alleged one time tax due on the vehicles statedly used and kept for use in Kerala is illegal and beyond the jurisdiction of respondents. 12. Sri Bechu Kurian, Sri.M.Ajay, Dr.Sebastian Champappilly and Sri G Bhagavath Singh have made detailed submissions in support of the writ prayers and have supplemented the oral arguments with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot, 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 motor vehicle. In the instant writ petitions, the vehicles since are registered in Unnion Territory of Puducherry, the words used or kept for use are interpreted on the basis of the broad principles laid down in Act 1988 read with Entry 35 of list-3 and Sections 40, 46 and 47 of Act 1988. (VII) A person is under obligation to re-register in the State of Kerala, if he uses or keeps the vehicle for use for more than 12 months in State of Kerala. (VIII) The words used or kept for use in Section 3(1) of Act 1976 shall be interpreted to mean that a vehicle is used or kept for use for more than 12 months which necessitates re-registeration or payment of one time ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 State of Kerala, on the strength of forged and created documents, showing the residence or place of business in Unnion Territory of Puducherry, completed registration of vehicles in Unnion Territory of Puducherry. Fraud vitiates everything. Therefore the Transport Department of State of Kerala, through the respondents herein, is discharging the functions, power and duty conferred on them by Act 1988 and Act 1976. The enquiry is not into all the vehicles registered in Puducherry, but only on those vehicles which are being used or kept for use in State of Kerala. The subject vehicles are within the territorial limits of State of Kerala. The respondents are enquiring into alleged commissions or omissions of petitioners and upon due enquiry and recovering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate 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) The sine quo non requirement of registration of a vehicle is a gate pass to enable the vehicle to come onto a road. The registration fee paid for registration is not to be confused with vehicle tax payable under Section 3 of Act 1976. Sections 40 and 41 provides for, where and how registration is made. Section 47 deals with a few contingencies where the vehicle is so kept in a State other than where it is registered and obligates for taking registration at the place where the vehicle so kept i.e. at a place other than where the vehicle is registered. Section 49 deals with change of residence or place of business warranting reregistration of the vehicle corresponding to the place where the vehicle is used or kept for use. Chapter III of Central Motor Vehicle Rules 1989 deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 enjoyed by one State or Union Territory where lowest vehicle tax is prescribed and rest of the States in the country, including State of Kerala, will have to maintain roads without collecting compensatory or regulatory tax from the user of the roads laid and maintained by the State. (xi) Replying to the challenge made against orders impugned in the writ petition, he contends that firstly no ground attracting the writ of certiorari jurisdiction is made out and alternatively if procedural deviations pointed out by petitioners are accepted, even then the orders ought not to be interdicted on merits, but the matter remitted for reconsideration afresh by the respondents. (xii) The exemption claimed by reference to S.R.O No.878/75 under Section 22 is untenable, firstly, entitlement to exemption is verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 of respondents is that the vehicles not coming within the definition of Sec.2(47) come within the perview of Sec.3(6) of Act 1976 and there is no ambiguity. 17. This Court finds it useful to preface the following introduction before actually embarking upon considering the contentions put forward by the learned counsel appearing for both parties. In considering the instant issues this Court is slow to embark upon unnecessary, wide or general enquiry into each one of the arguments canvassed by the parties, in as much as the Courts adjudge only concrete cases/issues and do not indulge in pronouncing on abstract theoretical principles. Such course of deciding real issue in other words is called the process of empiric adjudication. This Court, therefore, confines its decision as far as reasonably practicable and necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 framed as under: A) Whether Section 3(6) of Act 1976 is valid, constitutional or repugnant to section 40, 47 and 49 of Act 1988 and/or ultra vires Act, 1976. B) A vehicle registered outside State of Kerala whether is exempt from payment of vehicle tax in State of Kerala or required to pay vehicle tax, if so, when the levy or incidence of tax arises under Act 1976. C) Whether the registration of a vehicle under Chapter IV of 1988 and payment of vehicle tax in any other state relieve the petitioners from the tax liability under Act 1976. D) Whether the show cause notices/orders/recovery proceedings in respective writ petitions, are valid, legal and are in consonance with the Act 1988 and Act 1976. Consideration 21. After perusing the record, written submission etc., this Court notices that a simple lis i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 institutions like Central Institute of Road Transport (CIRT), Automotive Research Association of India (ARAI), and other transport organisations including, the manufacturers and the general public, Besides, obtaining comments of State Governments on the recommendations of the Working Group, these were discussed in a specially convened meeting of Transport Ministers of all States and Union territories. Some of the more important modifications so suggested related for taking care of - 2 (a) the fast increasing number of both commercial vehicles and personal vehicles in the country ; (b) the need for encouraging adoption of higher technology in automotive sector; (c) the greater flow of passenger and freight with the least impediments so that islands of isolation are not created leading to regional or local imbalances; (d) concern for road safety standards, and pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 authority in whose jurisdiction the vehicle owner has the residence or place of business, where the vehicle is normally kept. Section 40 operates subject to Section 42, 43 and 60. In the present case the issue does not arise under Sections 42, 43 and 60, therefore the effect of these sections is not adverted to while considering scope and ambit of Sec.40. Literally interpreted, section 40 provides for or deals with place of registration as follows: the owner of a vehicle shall cause the vehicle to be registered,by a registering authority in whose jurisdiction the owner has the residence or the place of business, and where the vehicle is normally kept. 20.1 Section 40 without any scope for ambiguity provides both for choice of registration and at the same time the words normally kept regulate the choice of owner of vehicle while registering the vehicle unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ....................... 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. Permanent Address ...................... (Electoral Roll/Life Insurance Policy/Passport/Pay slip issued by any office of the central Government/state Government or a local body/Any other documetn or documents as may be prescribed by the State Government/ Affidavit sworn before an Executive Magistrate or a First Class Judicial Magistrate or a Notary Public to be enclosed) 4. Temporary address/Official address, if any ......... 5. Duration of stay at the present address ............. (emphasis added) 6. PAN Number (Optional) : 7. Place of birth : ..... ..... 34. I have paid the prescribed fee of rupees.................. The owner can register the vehicle where his permanent address is or temporary address but the choice of registering authority is decided where the vehicle is normally kept. As in a few cases in this batch of writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 thereof in respect of other classes of non- transport vehicles shall be levied. 5 **** 15 **** Provided that the States may levy fee lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 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 vehicle is kept. The object of section 47 as could be culled out from literal construction is that due to change in place of use i.e. other than the place where the vehicle is registered, the owner of vehicle is under obligation to get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 that the new address may be entered therein. Section 49 applies to a case where the owner of a vehicle registered under the Act, firstly, ceases to reside or ceases to have his place of business at the address recorded in the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration 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 order of cancellation under section 54 or under this section shall, if it is the original registering authority, cancel the certificate of registration and the entry relating to the vehicle in its records, and, if it is not the original re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 raised by the other State Transport Authorities. Then a bona fide user of vehicle using the vehicle in more than one State may be required to frequently change the registration as directed by the State Transport authority. It is well establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 ₹ 100 and for any second or subsequent offence with fine which may extend to ₹ 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 the words viz. used or kept for use employed in Section 3(1). The averment is that these words ought to be interpreted, subject to Entry 35 of List III. The petitioners by complying with the requirement of Chapter IV of Act 1988, enjo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 rate specified in the eighth proviso to sub section (1) of section 4. Provided also that in respect of new stage carriages registered or assigned a new registration mark or altered from any category other than stage carriage, there shall be levied a tax based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 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 O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability under section 3 arises when motor vehicle is used or kept for use in the State. The petitioners do not challenge Act 1976 as beyond the legislative competence of State Legislature. But being owners of non-State registered vehicles challenge Section 3(6) which is introduced with effect from 29.07.2015. The unammended and ammended Section 3(6) read thus: Unammended Section 3(6) Ammended Section 3(6) (6) 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 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 Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petitions. However in this judgment this Court is not examining, as a matter of fact, the exact period of stay by each vehicle and recording a finding thereon. The impugned notices are issued by respondents on the supposition that the subject vehicles are used or kept for use in the state without discharging corresponding liability under Act 1976. The argument of petitioners proceeds on the premise that the compliance with statutory requirement of registration under Act, 1988 and payment of vehicle tax under Pondicherry Motor Vehicle Taxation Act had conferred on petitioners a right to ply the vehicles in State of Kerala without further incidence of vehicle tax for plying on or using the roads of State of Kerala. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oads they are registerable, and they have to be registered and are liable for payment of tax under the Taxation Act. There has been a good deal of argument on both sides on the meaning of the expression adapted for use upon roads . We have been referred to certain English decisions which deal with the meaning of the word 'adapted' in the English Road Traffic Act, 1960. While the definition of 'motor vehicle' in the Act describes it as a mechanically propelled vehicle adapted for use upon roads, the English Road Traffic Act describes it as a mechanically propelled vehicle intended or adapted for use on roads . Even the earlier English Road Traffic Act, 1930, had used the words intended or adapted 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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. 27.13 Section 3(1), as already noted, provides for levy of tax on every motor vehicle used or kept for use in the State at the rates specified for such vehicle in the Schedule. The second proviso reads as follows: 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, on 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 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 payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate specified in Annexure-I 28.1 Extending above illustration the obligation to pay vehicle tax under Section 3(6) is dependent on the period of stay of a non-transport vehicle registered outside State of Kerala but used or kept for use in State of Kerala. Annexure III as it stands today is substituted by Kerala Finance Act, 2018. The contention of the petitioners, that the Puducherry registered vehicles can ply in State of Kerala, is untenable in law and unavailable in the statutory scheme of Act 1988 and Act 1976. The twelve month period referred in Section 47 of the Act or thirty days' period referred in Section 49, has nothing to do with the vehicle tax payable under Act 1976. The nature and character of impost under Motor Vehicle Taxation Act is at the outset relatable to a vehicle used or kept for use in State of Kerala. This Court hastens to clarify that the completed act of registration of a vehicle, as is in this batch of cases, in Puducherry confers the right of the owner to ply the vehicle in Unnion Territory of Puducherry, but the vehicle tax paid in Unnion Territory of Puducherry does not enable use or keeping for use these vehicles be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala Motor Vehicles Taxation Act (Act 24 of 1963) provides that a tax 'shall be levied on all motor vehicles used or kept for use in the State'. The levy is within the competence of the State legislature as Entry 57 in List 1 authorizes levy on vehicles suitable for use on roads . It has been laid down by this Court in Bolani Ores Ltd v. Orissa that under Entry 57 of List II, the power of taxation cannot exceed compensatory nature which must have some nexus with the vehicles using the roads i.e. public roads. If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed. 30. The term tax/taxes have been defined as a rate or sum of money assessed on the person or property of a citizen by the government for the use of the nation or state; burdens or charges imposed by the legislative power upon persons or property to raise money for public purposes and the enforced proportional contribution of persons and property levied by authority of the state for the support of government and for all public needs. 30.1 Taxation is the act of levying tax, or imposing these burdens or charges upon persons or property or in other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeping of vehicle is subject to paying the vehicle tax under Section 3(6) of Act 1976. The interpretation now put forward by the petitioners on Section 3(6) of Act 1976 if is accepted, the State Government cannot recover tax from the users of its roads and such user, defeats the regulatory or compensatory character involved in imposition of vehicle tax. 30.5 The petitioners rely on two reported decisions of Karnataka High Court (a) Mahesh C. Gandhi v. The Deputy Commissioner for Transport, Belgaum Division 2005 (3) KCCR SN 201 and (b) Jagadev Biradar v. State of Karnataka 2016 (3) KCCR 2330 and contend that the levy of life tax is held to be illegal in the reported cases, and persuade this Court to follow the principle laid in those decisions The distinction in the language used in Karnataka Motor Vehicle Tax Act and Act 1976 is explained by the following Table: Act 1976 Karnataka Motor Vehicle Taxation Act Sections 3(1) and 3(6) Sec 3 3(1) Subject to the provisions of this Act, on and from the date of commencement of this Act, a tax shall be levied on every motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by non-State registered vehicles, the State Legislature has amended Section 3, thereby introduced Section 3(6) and later on, with effect from 01.04.2018 Annexure III of Schedule I was also substituted. The ratio laid in the Karnataka High Court decisions is distinguishable and the ratio is not applicable to the case on hand. Sections 3(1) and 3(6) are interpreted and a view is recorded that under Section 3(1) the vehicle when used or kept for use the liability to vehicle tax arises and under Section 3(6) if the non-State registered vehicle enters Kerala and stays exceeding thirty days, the vehicle tax liability as per Annexure III arises. 30.7 The next argument advanced for petitioners is that the respondents have no locus to cancel the registration already granted by the Registering Authority of the Unnion Territory of Puducherry. The registration if is vitiated for a reason noted, enquired into and a finding recorded warranting cancellation under Section 55 of Act 1988, even then the authority who had granted the registration certificate alone has jurisdiction to cancel the registration under Section 55(5) of Act 1988. The respondents either by referring to the address sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) read with Annexure III to Schedule of Act 1976. For the said purpose of collecting vehicle tax, sine quo non, either to attract the incidence, rate or period is that a finding of fact on all the three essential ingredients is recorded by the respondents. The orders impugned where the petitioners are called upon to pay life time tax do not conform to the prescription of Section 3(6) etc. 32. The petitioners contend by referring to Annexure III, as amended with effect from 01.04.2018, that the respondents are determining the vehicle tax payable by the petitioners and such determination is illegal, amounts to retrospective applicability of amended Annexure III. For considering the said objection raised by the petitioner, the pleadings in the respective cases need not once again be adverted to, for, the liability to pay tax depends upon the corresponding period for which a vehicle is kept or used for thirty days more in State of Kerala. It is always open to the owner of a non-transport vehicle to take note that liability to pay tax is attracted if the stay exceeds thirty days from entry into State and relocate the vehicle to the State where the vehicle is registered, to continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles owned by petitioners. S.R.O. 878/1975 is anterior to Act 1976. Section 3 of Act 1976 had undergone by way of amendments a few substantial charges. Section 3(6) expresses the intent of legislature to remedy the drain caused to exchequer by non-registration of vehicles in State of Kerala which ought to have been registered in State of Kerala and the present legislative mechanism is put in place. Therefore Section 3(6) in the considered view of this Court is applicable as on date but not the exemption in S.R.O. 878/1975. 33. The petitioners challenge impugned orders supposedly made under Chapter IV of Act, 1988. The orders, by and large, are similar in content, propose similar directions, but are slightly changed in expression. For appreciating the orders passed in purported exercise of the power under Chapter IV, the following order in WPC No.29183 of 2018 is excerpted: WPC No.29183 of 2018 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 prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information the registering authority - Puducherry puts the owner on notice and thereafter passes orders cancelling the registration. The said approach is track-1 approach under Act, 1988 available to respondents and tract-II is independent, arising under Section 3(6) of Act 1976, where for keeping the vehicles beyond thirty days, vehicle tax as per Annexure III can be levied and collected. 34.2 Further, a few findings are recorded and final orders passed without furnishing the copies of documents on which the authorities have relied upon. For the view, this Court has taken supra while interpreting provisions in Chapter IV of Act 1988 the orders referred to above are unsustainable in law and matter requires reconsideration by the authorities in the manner indicated by this judgment. The respondents herein would be acting contrary to rule of natural justice and procedural fairness in action, if the respondents act upon information collected by them and which information has not been disclosed to the petitioners in the enquiry held in this behalf. The orders impugned in the writ petitions are either guided by circular issued by the Commissioner, Transport Department or refer to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of tax under Section 3(6) of Act 1976 is attracted and the respondents are entitled to enquire into levy and recover the vehicle tax in accordance with Anneuxre III. 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. 37. As a result of my above discussion I summarise my judgment on the issues noted above as follows: (a) Section 3(6) of Motor Vehicles Taxation Act, 1976 is within the competence of State legislature and Section 3(6) is not in any manner repugnant to Chapter IV of Motor Vehicles' Act, 1988 or ultra vires Act 1976. Section 3(6) therefore is valid and legal. (b) 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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