ivil Appeal Nos
437 437 and 1460 of 1970
Appeals by Special Leave from the Judgments and orders dated 24 3 1969  10 11 1969 of the Kerala High Court in Writ Appeal Nos 45179 63069  80769
A B Divan M Vellapally and T M Ansari for the Appellant in CA 43770
M Vellapally and T M Ansari for the Appellant in CA 438 70
Kapil Sibal M Vellapally and T M Ansari for the Appellant in CA 43870
Kapil Sibal M Vellapally and TM Ansari for the Appellant in 146070
K T Harindranath and K M K Nair for the Respondents in all the appeals
The Judgment of the Court was delivered by KAILASAM J
These three appeals are by special leave granted by this Court against the judgment and order of the High Court of Kerala in Writ Appeals Nos 451 630 and 807 of 1969 respectively
The questions that arise for consideration in all the three appeals and the same and can be dealt with together
As the facts so far as they are necessary for decision in these appeals are similar we will confine the judgment to the facts in Civil Appeal No 437 of 1970
The appellant in Civil Appeal No 437 of 1970 is Travancore tea Estates Co Ltd Vandiperiyar in Kerala State
The 1st respondent is the State of Kerala and respondents nos
2 and 4 are the authorities functioning under the Kerala Motor Vehicles taxation Act Act 24 of 1963 which will hereafter be referred to as the Act was brought into force on 1 7 1963
The Act provides that a tax at the rates fixed by the Government by notification in the Gazette not exceeding the maximum rates specified i the First Schedule shall be levied on all Motor Vehicles used or kept for use in the State
 The appellant company owned 17 motor Vehicles tractors trailers and lorries all of which are registered in the company s name under the 
The company alleged that the vehicles were purchased by it solely and exclusively for use in the estates and intended to be used only for agricultural purpose and were not used nor kept for use in the State as contemplated under section 3 of the Act
The company is a tea plantation having eight estates which lie contiguous to each other and have an extent of 1391 942244 acres in the aggregate
The company for the purpose af plantation are maintaining roads fit for vehicular traffic in the eight estates covering a length of 131 miles in the aggregate on 23rd September 1964 a Bedford Lorry owned by the company and bearing registration No KLK 1540 was seized by the police and taken into custody under section 13 of the Act
According to the appellant the seizure was effected in Tengamullay Estate which is one of the eight estates owned by the company
The company wrote to the Department on 28 12 1964 stating that the vehicle was being used for agricultural purpose on private roads in the Estates and the company is not liable to pay tax and asked for the release of the vehicle
On the company paying a sum of Rs 3150 as tax under protest for the period between 1 7 63 to 31 12 94 the vehicle was released
The department proceeded to prosecute the appellant in the Peermade 1st Class Magistrate s Court and the case is still pending The appellant company filed o P No 19965 before the High Court of Kerala claim in that they were not liable to pay any tax on the motor vehicles
The High Court by its judgment dt
3rd March 1966 directed the Regional Transport officer Kottayam 2nd respondent herein to examine the question raised in the writ petition and to pass final orders
It also directed that if the petitioner was aggrieved with the order he was at liberty to approach the High Court
In the meanwhile it directed stay of prosecution and collection of tax the matter was taken up for consideration by the 2nd respondent
The 2nd respondent rejected the pleas of the appellant and by his order dt
12 4 68 held that the 13 vehicles mentioned in the original Petition were liable to pay was under they act
The appellant filed a petition before the High Court for appropriate relief
The High Court disposed of the petition o P No 217368 along with o P No 208168 filed by Peermade Tea Co who are the appellants in CA 43870 in this Court by a common order dt
19th December 1968
The learned Judge held that the language in section 3 of the Act showed that there is a departure from the legislative policy of restricting the tax liability only to vehicles using pubic roads
It held that the tax is imposed by section 3 on alt the motor vehicles used or kept for use in the State irrespective of any question as to whether they are used or kept for G use on pubic roads or not
It rejected the contention on behalf of the appellant that legislature must be taken to have intended to levy such tax only on motor vehicles using or kept for use on public roads
The learned Judge also held that the Act is not beyond the competence of the legislative powers of the State as the tax is leviable by the State in respect of all motor vehicles are used or kept for use in the State quite irrespective of any question as whether or not such vehicles are used on public roads
1392 Aggrieved by the decision of the single Judge the appellant took the matter up on Letters Patent Appeal
The main contention raised on behalf off the appellant was that the learned single Judge was in error in holding that all motor vehicles used or kept for use in the State quite irrespective of any question as to whether or not they are used on public roads is erroneous in so far as it related to motor vehicles used or kept exclusively for use in private estate and not used or kept for use on the public roads of the State
The Letters Patent Bench affirmed the decision of the single Judge and rejected the appeal
The constitutional validity of the Act was not questioned before the Bench
Holding that the legislative Entry 57 if the State list only required that the vehicles should be suitable for use on roads and the charging section only provided that the vehicle should be used or kept for use in the State the required conditions were satisfied and there would be no justification for reading into the statute words that and not there and restricting the levy only on vehicles using public roads
While not contesting the correctness of the observation of the Bench of the Kerala High Court that the levy cannot be restricted to vehicles using the public roads it was submitted that the words in section 3 cl
1 of he Act shall be levied on all motor vehicles used or kept for use in the State should be confined to vehicles used or kept for use on the public roads of the State and not to vehicles that arc intended to be confined within the premises of the Estate
In other words the controversy between the parties before the RTO the single Judge of the High Court and the Bench of the High Court can be stated by extracting the question at issue as framed by the RTO I understand that the roads used by these vehicles even those within the estates come under the definition of Public Roads and Public Place since at present I have 
not afforded opportunity to the company to refute the basis on which that fact is to be found
I make it clear that I am not relying on that matter as a basis for this order and I reserve my right to investigate that matter if needed be later
I assume for argument sake without conceding that the estate roads are private roads
Even in that case I am of 
the view that the company s vehicles are liable to pay tax
It is not in dispute that the vehicles are used and are kept for use within the State The company roads arc within the Kerala State
It is also not disputed that the vehicles are registered and their registration certificates are current and they are usable motor vehicles
The tax levied under the KMVT Act is a tax on the possession of usable motor 1393 vehicle and it is realised for the propose of State Revenue
Such being the nature of the levy according to me I feel that irrespective of the question whether the road on which the vehicle is intended to be used is private or public the tax is attracted
 The question that falls for decision is whether on the assumption that the motor vehicles are used or kept for use within the estate and not intended to be used on public roads of the State the tax is leviable In order to appreciate the question raised it is necessary to refer to the relevant entry in the Constitution the provisions of the Act and the and the decision relating to the question rendered by this Court
Entry 57 in List II of the Constitution relates to 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
This entry enables the State Government to levy a tax on all vehicles whether mechanically propelled or not suitable for use on roads emphasis supplied
There is no dispute that the vehicles are mechanically propelled and suitable for use on roads
Section 3 of the impugned Act Kerala 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 II authorises by on vehicles suitable for use on roads
It has been laid down by this Court in Bolani Ores Ltd vs 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 ie public roads
If the vehicles do not use the roads notwithstanding that they are registered under the Act they cannot be taxed
If the words used or kept for use in the State is construed as used or kept for use on the public roads of the State the Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II
If the vehicle are suitable for use on public roads they are liable to be taxed
In order to levy a tax on vehicles used or kept for use on public roads of the State and at the same time to avoid evasion of tax the legislature has prescribed the procedure
Sub section 2 of sec
3 provides that the registered owner or any person having possession of or control of a motor vehicle of which a certificate of registration is current shall for the purpose of this Act be deemed to use or kept such vehicles for use 1394 in the State except during any period for which the Regional Transport Authority has certified in the prescribed manner that the motor vehicle has not been used or kept for use
Under this sub section there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State
This provision safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State
At the same time the interest of the bonafide owner is safeguarded by enabling him to claim and obtain a certificate of non user from the prescribed authority
In order to enable the owner of the vehicle or the person who is in possession or being in control of the motor vehicle of which the certificate of registration is current to claim exempting from tax he should get a certificate in the prescribed manner from the Regional Transport Officer
Section 5 of the Act provides for exemption from payment of tax under certain circumstances
It enables the registered owner or the person having possession or control of such vehicle to give previous intimation in writing to the RTO that the vehicle would not be used for such period and at the same time surrender certificate of registration and permit of the vehicle
Section 6 enables the registered owner or a person in possession or control of such a vehicle to get refund of tax if conditions specified in section 6 are satisfied
Thus in order to enable the registered owner or person in possession or control of a vehicle to get exemption of tax advance intimation of the RTO along with the surrender of certificate of registration is necessary
The provision of section 3 sub sec
2 as well as 6 5 and section 6 are meant to prevent evasion of tax and to provide for exemption from tax in proper cases
Though the purpose of the Act is to tax vehicles that are used or kept for use on the public roads of the State the State is entitled for the purpose of safeguarding the revenues of the state and to prevent evasion of the tax to enact provision like provision as in section 3 raising  a presumption that the vehicle is used or kept for use in the Situate without any further proof unless exemption is claimed under section 32 section 5 and s6
It may be observed that reading sections 3 5 and 6 it is clear that a levy of tax is contemplated only on the vehicles
that are used or kept for use on the public roads of the state
While we agree with the contentions of the learned counsel for the appellant that the tax is only eligible on vehicles used or kept for use on public roads we must deserve that in order to claim exemption from payment of tax requirements of section 32 or sections 5 and 6 should be satisfied
Surrender of the registration certificate 1395 contemplated under section 5 is for making sure that the motor vehicle is not being put to any use and does not have the effect of annulling the certificate of registration
If the requirement contemplated under the Act is not satisfied the registered owner or person m possession or control of the vehicle would not be entitled to claim any exemption from payment of tax 
It remains for consideration as to what is the appropriate order that should be passed on the facts and circumstance of this case
As a general proposition of law as exemption from payment of tax had not been claimed and obtained as required under this Act the appellant would be liable to pay tax but as already pointed out and set out clearly in the order of the RTO the question that was raised and disputed was whether on the assumption that the vehicles were kept for use in the states alone and not for use on the public roads of the State tax is leviable
The authorities proceeded on the basis that even assuming that the vehicles were not intended to be used on the public roads they are liable to tax
In this view the appellant did not apply for exemption or notify non user as required under the provisions of the Act
But on the facts and circumstances of the case it is clear that the appellant claimed for exemption from tax on the ground that it was not being used on the public roads
In the circumstances of the case we have to take it that though in terms requirement of sections 3 and 5 have not been complied with in effect the requirements have been satisfied as the dispute proceeded throughout on that basis
But as has been specifically stated by the RTO the question whether estate roads are
public roads is reserved for further investigation and decision
Equally the RTO will be at liberty to act under section 52 of the Act and decline exemption from the liability to pay tax for the relevant period if on verification it is found that the vehicle has been used during that period on the public road
Before concluding we would refer to a contention raised by the learned counsel based on the decision of this Court in Bolani Ores Ltd vs Orissa supra
The plea of the learned counsel is that the word motor vehicle should be understood as defined by section 218 of the and excluded from taxation motor vehicles used solely upon the premises of the owner
 As the vehicles with which we arc concerned were claimed to have been kept for use solely in the premises of the company it was contended that the vehicles are not exigible to tax
This Court in the decision cited was dealing with the Orissa Motor Vehicles Taxation Act 1930
Section2c of the Orissa Taxation Act adopted the definition of Motor vehicles Act as found in Motor Vehicles Act 1914
The Motor vehicles Act 914 was repealed and replaced by the Motor Vehicles The definition of motor vehicle  in section 218 of the excluded motor vehicles used solely upon the premises of the owner
The Orissa Motor vehicles Taxation Act was amended and orissa Amendment Act 1943 re enacted the provisions of the Taxation Act Motor Vehicles  was defined under section 218 of the excluding vehicles used solely upon the premises of the owner
Subsequently the definition of motor vehicle  under section 218 of the was amended by the Act 100 of 1956 which confined the exemption from taxation to motor vehicles of a special type adopted for use only in a factory or in any other enclosed premises
 The exemption from tax only be claimed after amendment to section 218 by Act 100 of 1956 if the vehicle was of special type adopted for use only in a factory or in any other enclosed premises and the exemption that was avail able before the amendment by Act 100 of 1956 to Motor Vehicles used solely upon the premises of the owner was taken away
This Court held if the subsequent Orissa Motor Vehicles Taxation Amendment Act 1943 incorporating the definition ofmotor vehicle  referred to the definition of motor vehicle  under the Act as then existing the effect of this legislative method would in our view amount to and incorporation by reference of the provisions of section 21 of the Act in section 2c of the Taxation Act 
Any subsequent argument in the Act or a total repeal of the Act under a fresh legislation on that topic would not affect the definition of motor vehicle  in section 2c of the Taxation Act
 As a result this Court held that the definition of motor vehicle  given in section 218 of the Motor Vehicles Act 1939 before the amendment by Act 100 of 1956 was applicable
Relying on this decision the learned counsel submitted that the test that is to be applied to determine whether motor vehicle is liable to tax or not is whether it comes under the exemption provided by under section 218 of the before the amendment
We are unable to accept the contention mainly on the ground that the Kerala Motor Vehicles Taxation Act 1963 Act 24 of 1963 came into force on 18 3 63
Section 21 of the Taxation Act provided that words and expression used but not defined in the Motor Vehicle Act 1939 Central Act 4 of 1939 shall have the meaning respectively assigned to them in that Act
On the date when the Kerala Motor Vehicles Taxation Act was enacted was amended by Act 10 of 1956 and the amended definition on the date when the Taxation Act came into force exempted only motor vehicles which are of a special type adopted for use only in a factory or in any other enclosed premises
The amended definition will have to be read into the Taxation Act which was enacted subsequent to the date of the 
amendment of the definition of Motor Vehicle  by Act 100 of 1956 1397 In this view we feel that the decision in Bolani s case supra will not be of any assistance to the learned counsel for the appellants
The appeals are allowed to the extent indicated above
But in the circumstances there will be no order as to costs
SR Appeals allowed in part


Summary:
The Kerala Motor Vehicles Taxation Act Act 24 of 1963 was brought into force on 1 7 63
The Act provides that a tax at the rates fixed by the Government by notification in the Gazette not exceeding the maximum rate specified in the First Schedule shall be levied on all motor vehicles used or kept for use in the state
The appellant company owned 17 motor vehicles tractors trailers and lorries all of which are registered in the Company s name under the Motor Vehicles Act
The Company alleged that the vehicles were purchased by it solely and exclusively for use in the estates and intended to be used only for an cultural purpose and were not used nor kept for use in the State as contemplated under section 3 of the Act
The Company is a tea plantation having eight estates which lie contiguous to each other and have an extent of 942244 acres in the aggregate
The Company for the purpose of plantation are maintaining roads fit for vehicular traffic in the eight estates covering length of 131 miles in the aggregate
On 23rd September 1964 a Bedford Lorry owned by the Company and bearing registration No KLK 1540 was seized by the Police and taken into custody in Tangamullay Estate which is one of the estates owned by the Company but later released on payment under protest a sum of Rs 3150 as tax for the period between 1 7 1963 to 31 12 64
The appellant Company filed OP 19965 before the High Court of Kerala claiming that they were not liable to pay any tax on the Motor Vehicles The High Court remanded the matter to the Transport Authority for a finding on the question raised
Since the Transport authorities was of the view that Section 3 covers private roads as well and decided against the appellant the appellant moved the High Court once again in OP 217368
Having lost before the single bench and the Division Bench in the Letters Patent appeal the appellant same up in appeal by special leave
Allowing the appeals in part the Court  HELD 1
On reading sections 3 S and 6 of the Kerala Motor Vehicles Taxation Act Act 24 of 1963 it is clear that a levy of tax is contemplated only on the vehicles that are used or kept for the use on the public roads of the State
1394G Bolalni ores Ltd vs State of Orissa   155 explained and distinguished
Entry 57 in List IT of the Constitution relates to taxes on vehicles whether mechanically propelled or not suitable for use on roads including tram 1389 cars subject to the provisions of entry 35 of List III This entry enables the A State Government to levy a tax on all vehicles whether mechanically propelled or not suitable for use on roads
Section 3 of the Kerala
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 vehicles in the instant case are mechanically propelled and suitable for use on roads
The levy is within the competence of the State Legislature as Entry 57 in List
II authorises the levy on vehicles suitable for use on roads
1393 B E 3
In order to levy a tax on vehicles used or kept for use on public roads of the Stare and at the same time to avoid evasion of tax the legislature has prescribed the procedure
Under sub section 2 of section 3 there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State
Section 32 safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State
At the same time the interest of the bonafide owner is safeguarded by enabling him to claim and obtain Q certificate of non user from the prescribed authority
In order to enable the owner of the vehicle or the person who is in possession or being in control of the motor vehicles of which the certificate of registration is current to claim exemption from tax he should get a certificate in the prescribed manner from the Regional Transport officer
Section 5 provides for exemption from payment of tax under certain circumstances
Section 6 enables the registered owner or a person in possession or control of such a vehicle to get refund of tax if the conditions specified therein are satisfied
Thus in order to enable the registered owner or person in possession or control of a vehicle to get exemption of tax advance intimation to the RTO along with the surrender of certificate of registration is necessary
The provision of section 3 sub sec
2 as well as section 5 and section 6 are meant to prevent evasion of tax and to provide for exemption from tax in proper cases
Though the purpose of the Act is to tax vehicles that are used or kept for use on the public roads of the State the State is entitled for the purpose of safeguarding the revenue of the State and to prevent evasion of the tax to enact provision like provision as in section 3 raising a presumption that the vehicle is used or kept for use in the State without any further proof unless exemption is claimed under section 32 section 5 and section 6
1393 G H 1394 A G 4
In order to claim exemption from payment of tax requirements of section 32 or sections 5 and 6 should be satisfied
Surrender of the registration certificate contemplated under section 5 is for making sure that the motor vehicles is not being put to any use and does not have the effect of annulling the certificate of registration
If the requirement contemplated under the Act is not satisfied the registered owner or person in possession or control of the vehicles would not be entitled to claim any exemption from payment of tax
1394 H 1395 A Bl 5
The Kerala Motor Vehicles Taxation Act 1963 Act 24 of 1963 came into force on 18 3 63
Section 21 of the Taxation Act provides that words and expression used but not defined in the Central Act 4 of 1939 shall have the meaning respectively assigned to them in that Act
On the date when the Kerala Motor Vehicles Taxation Act was enacted was amended by Act 100 of 1956 and the emended definition on the date when the Taxation Act came into force exempted only motor vehicles which are of a special type adopted for use 1390 only in factory or in any other enclosed premises
This amended definition will have to be read into the Taxation Act which was enacted subsequent to the date of the amendment by Act 100 of 1956 of the definition of motor Vehicle in section 218 of the Central 1939
1396 F H 1397