Case: Travancore Tea Co. Ltd. and Others Vs. State Of Kerala And Ors

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 1970The 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 companys 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 agricultural purpose and were not used nor kept for use in the State as contemplated under s. 3 of the Act. The company is a tea plantation having eight estates which lie contiguous to each other and have an extent of 9422.44 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 s. 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. 3, 150/- 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 C lass Magistrates Court and the case is still pending, The appellant company filed o. P. No. 199/65 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. 2173/68 along with o. P No. 2081/68 filed by Peermade Tea Co. who are the appellants in C.A. 438/70 in this Court, by a common order dt. 19th December, 1968. The learned Judge held that the language in s. 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 s.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.Aggrieved by the decision of the single Judge the appellant took the matter up on Letters Patent Appeal.

Reasoning:
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 fro m payment of tax requirements of s. 3(2) or ss. 5 and 6 should be satisfied. Surrender of the registration certificate contemplated under s. 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 oft 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 R.T.O., 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 ss. 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 R.T.O., the question whether estate roads are. public roads is reserved for further investigation and decision. Equally the R.T.O. will be at liberty to act under s. 5(2) 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 roadAs 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. Section(2c) 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 bythe Motor Vehicles Act,. The definition of motor vehicle in s. 2(18) ofthe Motor Vehicles Act,1939excluded 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 s. 2(18) ofthe Motor Vehicles Act,1939excluding vehicles used solely upon the premises of the owner. Subsequently the definition of motor vehicle under s. 2(18) of the Motor Vehicles Act 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 s. 2(18) 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 t he 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 of motor 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 s. 2(1) of the Act in s. 2(c) 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 s. 2(c) of the Taxation Act."As a result this Court held that the definition of  motor vehicle given in s. 2(18) of the Motor Vehicles - Act,1939before 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 s. 2(18) ofthe Motor Vehicles Act,1939before 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 2(1) of the Taxation Act provided that words and expression used but not defined in the Motor Vehicle Act,1939(Central Act 4 of) shall have the meaning respectively assigned to them in that Act. On the date when the Kerala Motor Vehicles Taxation Act was enacted, Motor Vehicles Act1939was 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 In this view we feel that the decision in Bolanis case (supra) will not be of any assistance to the learned counsel for the appellants.