Anil Kumar vs. State Of Kerala - Kerala High Court, 25 July 2023

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUE AY, THE 25TH DAY OF JULY 2023 / 3RD SRAVANA, 1945 WP(C) NO. 1567 OF 2014 PETIT

IONER: PREM PRAKASH, AGED 27 YEARS, S/O. PRAKASH, PUTHEN VEEDU, KOTTARAKKARA P.O., KOLLAM DISTRICT. BY ADVS. SRI.M.V.THAMBAN SRI.ARUN BOSE SRI.B.BIPIN SRI.R.REJI SMT.THARA THAMBAN RESPONDENTS: 1 STATE OF KERALA REPRESENTED BY ITS PRINCIPAL SECRETARY TO THE GOVERNMENT, MOTOR VEHICLE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695 001. 2 THE TRANSPORT COMMISSION, TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM, PIN-695 001. 3 THE REGIONAL TRANSPORT OFFICER, KOTTARAKKARA, KOLLAM DISTRICT, PIN-691 506. 4 THE JOINT REGIONAL TRANSPORT OFFICER, SUB REGIONAL TRANSPORT OFFICE, KOTTARAKKARA, KOLLAM DISTRICT, PIN-691 506. SMT. RESHMITA RAMACHANDRAN, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.07.2023, ALONG WITH WP(C).1641/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

-2- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUE AY, THE 25TH DAY OF JULY 2023 / 3RD SRAVANA, 1945 W.P.(C) NO.1641 OF 2014 PETITIONER: ANIL KUMAR, AGED 55 YEARS, S/O. KARUNAKARAN, AMBALAKKARA HOUSE, PULAMON (P.O), KOTTARAKKARA, KOLLAM DISTRICT, PIN- 691 531. BY ADVS.SRI.R.REJI SRI.B.BIPIN SMT.THARA THAMBAN RESPONDENTS: 1 STATE OF KERALA REPRESENTED BY ITS PRINCIPAL SECRETARY TO THE GOVERNMENT, MOTOR VEHICLE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695 001 2 THE TRANSPORT COMMISSIONER, TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM, PIN-695 001. 3 THE REGIONAL TRANSPORT OFFICER, KAKKANAD, ERNAKULAM DISTIRCT, PIN-683 030. 4 THE JOINT REGIONAL TRANSPORT OFFICER, THRIPUNITHURA, ERNAKULAM DISTRICT. SMT. RESHMITA RAMACHANDRAN, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.07.2023, ALONG WITH WP(C).1567/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

-3- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 JUDGMENT Dated this the 25th day of July, 2023 The above writ petitions under Article 226 of the Constitution of India have been filed seeking for a relief of declaration that the value of the vehicle for the purpose of computation of Motor Vehicle Tax is the purchase price of the vehicle alone and does not include the tax component payable on the purchase price. The petitioners have also prayed for a writ of mandamus commanding the respondents to refund excess tax collected from the petitioners without any further delay.

W.P.(C) No.1641 of 2014:- The petitioner had purchased a Mercedes Benz Car from Rajasree Motors on 30.09.2013. The 3rd respondent insisted the petitioner to pay the tax on the value of the car, i.e., Rs.64,25,382/- at the rate of 15%. This value of Rs.64,25,382/- also included the tax and without tax, the value of the vehicle was Rs.55,97,510.34/-.

-4- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014

W.P.(C) No.1567 of 2014:- The petitioner had purchased a Toyota Innova Car from Nippon Motor Corporation on 04.01.2014. The 4th respondent insisted the petitioner to pay the tax on the value of the car, i.e., Rs.14,57,038/- at the rate of 10%. This value of Rs.14,57,038/- also included the tax and without tax, the value of the vehicle was Rs.12,72,522.27/-.

Section 2(e) of the Kerala Motor Vehicles Taxation Act, 1976 defines the purchase value of the vehicle which would include Value Added Tax, Cess and Customs or excise duty chargeable on vehicles. Section 2(e) of the Kerala Motor Vehicles Taxation Act is extracted hereunder:- "2(e) “purchase value”, means the value of the vehicle as shown in the purchase invoice and includes value added tax, [goods and services tax or such other tax as may be levied by the Central or State Government, cess and customs/excise duty chargeable on vehicles or the sale amount shown in the homologation uploaded by the manufacturer

in the Parivahan

portal administered by the Ministry of Transport and Highways, which ever is higher.

-5- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 Provided that the discount or rebate given by the dealer to the registered owner shall not be deducted from the bill amount for computing the purchase value: Provided further that the tax collection at source (TCS), which is a part of income tax payment, specified if any, in the purchase invoice shall not be included in the purchase value, Provided also that where the purchase value of any vehicle including a vehicle imported from other countries or a vehicle acquired or obtained otherwise than by way of purchase is not ascertainable on account of non availability of the invoice, the purchase value shall be the value or price of the vehicles of the same specifications which are already registered or available with the manufacturer or as fixed by the Customs and Central Excise Department for the purpose of levying customs duty and includes excise or customs duty levied on the purchase of a motor vehicle, as the case may be."

The said provision was amended by the Kerala Finance Act, 2014. In the said Act, the amendment was also given retrospective effect with effect from 01.04.2007. 6. The Division Bench of this Court in W.A. No.978 of

-6- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 2017 [Nippon Motor Corporation Pvt. Ltd. v. Regional Transport Officer [(2017) SCC OnLine Ker 19382] referred the retrospective operation of Section 2E and also reiterated the decision of the Division Bench in the case of Nagendra Mani N. v. State of Kerala and others [2015 (4) KHC 313]. Paragraphs 8 to 11 of the judgment of this Court in Nagendra Mani's case were relied on by the Division Bench are extracted hereunder:- “8. In the above context, the learned counsel contended that the said amendment virtually nullified the decision in Fathima Shirin's case. Though, the appellants had not challenged the legality of the amendment retrospectively brought about to Section 2(e) of the MVT Act, in the writ petitions, the learned Single Judge elaborately considered the same and positively affirmed the legal validity of the amendment. What is the legal effect and consequential impact thereon caused by the decision in Fathima Shirin's case? The learned counsel reiterated his contention, which was rejected by the learned Single Judge, that the verdict passed by this Court in Fathima Shirin's case is a 'declaratory judgment' and thereby the benefit under the said judgment is liable to be

-7- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 extended to all concerned. On an analysis of the decision in Fathima Shirin's case, it is pertinent to note that none of the provisions under the MVT Act was declared ultra vires or illegal. Since the introduction of 'one-time tax' with effect from 01/04/2007, purchase value was being reckoned including

various

components

such as excise/customs duty, value added tax etc., and tax was being collected accordingly till the laying of decision, restricting the meaning of 'purchase value' by excluding those components, in Fathima Shirin's case. This previous practice shows that what was really intended by the legislature, while defining 'purchase value' under Section 2 (e) and the charging provision under Section 3 of the MVT Act, was to realise tax on total purchase price, including

various

components

such as excise/customs duty, value added tax etc. Thus, the decision in Fathima Shirin's case caused a situation which necessitated to make a clarification, by way of amendment, specifically describing all the components constituting the purchase value with retrospective effect from the date of introduction of 'onetime tax'. We are also endorsing the views of the learned Single Judge that amendment brought about to the term 'purchase value' under Section 2(e) of the MVT Act as per the Kerala Finance Act 2014 is only 'clarificatory in nature', as nothing

-8- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 new was introduced or declared or declared illegal or invalid. As rightly held by the learned single Judge, there was no attempt to nullify the decision in Fathima Shirin's case and the clarification was made to make clear the intent of the legislation, which was brought into force from 01/04/2007. 9. The scope and extent of the power of legislature to amend the existing law with retrospective effect affecting or wiping out the decision rendered earlier by the court was considered by the Constitution Bench of the Apex Court in Sri. Prithvi Cotton Mills Ltd. etc. v. Broach Borough Municipality and others [(1969) 2 SCC 283 = AIR 1970 SC 192) and affirmed the wide power of legislature unambiguously. Again, relying on the above decision, the Apex Court reiterated the power of legislature to enact validating Acts in Bhuvaneshwar Singh and another v. Union of India and others [1994 (6) SCC 77].

10.

The proposition which culled out from the above decisions can be summarised as follows: If the legislature has legislative competency, they can legislate on the subject either prospectively or retrospectively and such power cannot be questioned, provided that such legislation shall not be made in violation of the provisions of the Constitution. The legislature has power to validate

-9- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 action taken under a particular enactment by removing defect in the original statute retrospectively because of which the statute or the part of it had been declared ultra vires. The legislature can, at any time, make a valid law and make it retrospectively so as to bind the past transactions. The validation of tax, which was declared illegal by the court of law is legal and permissible if the grounds of illegality or invalidity are capable of being removed and are, in fact, removed and tax thus made legal. The legislature has power to give its own meaning and interpretation of law and also to give a new meaning binding on courts. The exercise of rendering ineffective judgments or orders of competent courts by changing the very basis by legislation is a wellknown device of validating legislation. Sometimes, the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat makes the new meaning binding upon courts. A valid and proper legislation may neutralise or render earlier decision ineffective after change of law by way of amendment.

11.

In the light of the above decision, the learned single Judge is justified in rejecting the contention that the amendment to Section 2(e) of the MVT Act

-10- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 with retrospective effect as per the Finance Act, 2014 is intended to defeat the judgment passed in Fathima Shirin's case and thereby it is illegal and unsustainable.”

Considering the aforesaid legal position as explained in the aforesaid two decisions rendered by the two Division Benches of this Court, I find that the demand of motor vehicle tax at the rate of 15% and 10% of the invoices value of the vehicles was in accordance with the law. Thus the writ petitions do not have merit and hence are hereby dismissed. DINESH KUMAR SINGH JUDGE bpr

-11- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 APPENDIX OF WP(C) 1567/2014 PETITIONER'S EXHIBITS EXHIBIT P1OF THE RETAIL INVOICE DATED 04.01.2014 ISSUED BY THE AUTHORIZED SIGNATORY OF THE NIPPON MOTOR CORPORATION IN FORM NO.8B OF THE KERALA VALUE ADDED TAX RULES, 2005. EXHIBIT P2OF THE FORM TR5 ISSUED BY THE 4TH RESPONDENT DATED 06.01.2014. EXHIBIT P3OF THE JUDGMENT DATED 19.12.2013 IN W.P.(C) NO.31707/2013. EXHIBIT P4OF THE JUDGMENT DATED 06.12.2013 IN W.P.(C) NO.24064/2013. -12- W.P.(C) NO.1641 OF 2014 & 1567 OF 2014 APPENDIX OF WP(C) 1641/2014 PETITIONER'S EXHIBITS EXHIBIT P1 AOF THE TAX INVOICE DATED 30-09-2013 ISSUED BY THE AUTHORIZED SIGNATORY OF RAJASREE MOTORS. EXHIBIT P2OF THE TEMPORARY REGISTRATION CERTIFICATE. EXHIBIT P3OF THE JUDGMENT DATED 19-12-2013 IN W.P.(C) NO.31707/2013. EXHIBIT P4OF THE JUDGMENT DATED 06-12-2013 IN W.P.(C) NO.24064/2013.