Arsha Suvidha Ashok vs. State Of Kerala

Heard Sri. B. Mohan Lal learned counsel appearing for the petitioners and Smt. Thushara James, learned Government Pleader appearing for the respondents.

It appears that the petitioner has purchased a brand new BMW 5 Series 5301 M Sport Vehicle, as per Ext. P1 tax invoice dated 10.01.2020 issued by the dealer/agency of the said car at Mumbai, Maharastra State. Wherein the purchase value of the said vehicle is also clearly shown in the said invoice. Petitioner earlier secured temporary certificate of registration for the said vehicle from Maharastra State, as per Ext. P2 and going by the statutory obligation, he has to get permanent certificate of registration for the said vehicle, in the state of Kerala. The complaint of the petitioner, he had approached the 4th respondent, The Joint Regional Transport Officer for the purpose of permanent certificate of registration for the said vehicle, the said authority has taken a stand that, the petitioner will have to pay motor vehicle tax at the rate of 21% of the purchase value of the vehicle and that the value of the vehicle will be as current in the state of Kerala and not the value as shown in Ext. P1 tax invoice issued by the dealer in Maharastra State.

Petitioner has got a contention that the motor vehicle tax could be charged only at the rate 20% of the purchase value, as shown in the tax invoice and that the demand the he should also pay an additional 1% thereof as motor vehicle tax is illegal and ultra vires.

Section 3 of the Kerala Motor Vehicles Taxation Act, 1976 deals with the levy of the motor vehicle tax on vehicles and the same reads as follows; 3.Levy Tax- (1) Subject to the other provisions of this Act, on and from the date of commencement of this Act, a tax shall be levied on every motor vehicle used or kept for use in the state, at the rate specified for such vehicle in the Schedule; Provided that no such tax shall be levied on a motor vehicle kept by a dealer in, or a manufacturer of, such vehicle, for the purpose of trade and used under the authorization of a trade certificate granted by the registering authority. [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, one 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 of specified in the Schedule [as per fifth proviso] to sub-section (1) of section 4]

Section 2(e) of the said Act deals with the definition clause of purchase value and it contains two provisos thereof, which reads as follows; [(e) “purchase value” means the value of the vehicle as shown in the purchase invoice and includes value added tax, [goods and services tax and such other taxes as may be levied by the Central and State Government] cess and customs/excise duty chargeable on vehicles: 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 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 or a motor vehicles, as the case may be.]

It is also not in dispute that clause 7A of Annexure-1 referred to [in the second provisos of section 2(e)] and now has been amended and substituted by the Kerala Finance Act 2019 (Act 5 of 2019) (w.e.f. 01.04.2019) and the said clause now reads as follows;

Hence, it is only to be held that Dr. Thushara James, learned Government Pleader appearing for the respondents is certainly right in contending that both respondents are obliged to levy motor vehicles tax at the rate of 21% of the purchase value of the vehicle and going by amended provisions introduced to Clause 7A in Annexure-1 with effect from 01-04-2019 as the purchase of the car made by the petitioner is on 10.01.2020, which is much after 01-04-2019. Hence, the above said contentions of the petitioner is liable to pay tax only at any rate of 20%, is overruled, and the contra contentions of the respondents shall stand affirmed. The subsidiary grievance of the petitioner is that, the 4th respondents has orally informed the petitioner that since the petitioner purchased a car from Maharastra State, as per Ext. P1 tax invoice, the 4th respondent will take into account the purchase value, for the purpose of Clause 7A of the schedule of Annexure-1, going by the current price of the said car, as vogue in the state of 7A. “Motor Cars and Private Service Vehicles for Personal Use (Non Transport Vehicles) having purchase value of more than rupees twenty lakh.” 73A [21% of the purchase value of the vehicle]

First proviso in Section 2(e) would indicate that may not have much relevant to the dispute in the projected in this case and the second proviso in Section 2(e) would indicate 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 vehicles, as the case may be.

Unless the case comes with the certain ambit of second proviso in Section 2(e), the purchase value should be understood in terms of operative portion of the Section 2(e) which means the value of vehicle as shown in the purchase invoice and includes the tax components as afore stated. In the instant case, there is not much dispute in the purchase a car from the dealer in Mumbai, Maharastra State, as seen in Ext. P1 tax invoice. Therefore in the present factual scenario in this case, the second proviso in Section 2(e) would not arise in the instant case. Therefore, the irresistible

Hence, it is only to be held that the stand if any of the 4th respondent in insisting that the petitioner who has purchased the car from Mumbai, Maharastra State the petitioner is liable to pay tax on the basis of purchase price of the car, as current in the State of Kerala etc. is illegal ultra vires, and it is declared and so ordered. In case, as in the instant one where the brand new car is purchased from any where in the Union of India irrespective of whether or not, it is within the State of Kerala, then the purchase value, should be the value of vehicle as shown in the purchase invoice and inclusive of tax components thereto etc. Accordingly, it is ordered that the 4th respondent will immediately take steps to ensure that permanent registration is accorded to the petitioner's vehicle without much delay and after accepting the motor vehicles tax from the petitioner which will be computed at the rate 21% for the purchase value as shown in the purchase invoice, etc. as aforestated.

Necessary action in this regard should be duly taken by the 4th respondent to ensure that the permanent registration is accorded to the vehicle without much delay and the after collecting the above said due tax amount from the petitioner as above stated. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. ( )