Ozone Granites (P) LTD vs. The Joint Regional Transport Officer, Perumbavoor

Heard the learned counsel for the petitioners and also the learned Government Pleader appearing for the respondent.

The issue as to whether endorsement regarding transfer of ownership of goods carriage can be delayed in view of the pendency of check reports is no more res integra in view of the law laid down by the Division Bench of this Court in Varghese's case (supra). Paragraph 11 of the said decision reads thus; “11. If we then refer to Section 64(m), (n) and (o), it is the Central Government who has to prescribe the forms and other details in respect of the certificate of fitness. Section 64 is the rule making power of the Central Government. Then we may refer to Section 65, which is the rule making power of the State Government. The first thing to be noticed is, Section 65(1) as quoted above, which clearly gives authority on the State Government to make rules “for the purpose of carrying into effect the provisions of this Chapter other than the matters specified in Section 64”. Thus, the rules to be made by the State Government under or with reference to Section 65 would be, for the purposes of carrying out the provisions of this Chapter, and not any other, and that too, with a rider that it shall be in respect of matters other than matters specified in Section 64 of the Act. This would be of some importance because, with reference to Section 64, the Central Government has framed inter alia Rule 73 as quoted above. A reference to Rule 73 of the Central Rules would show that it talks of a tax clearance certificate in a form to be specified by the State Government in relation to Motor Vehicle tax or any compounding fee, as referred to in Section 86(5) and (6). Therefore, the requirement under the Central rules made with reference to Section 64 is limited to Motor Vehicle Tax and compounding fee alone. But, when we come to the newly inserted proviso, what we find is, it has travelled beyond these two i.e., Motor vehicle Tax or compounding fee and it has gone to 'no government dues and other legal actions pending in that office' meaning, office of the Transport Authority. Surely these could be beyond the object and the scope of the Act itself. For example, if there is some sales tax dues in respect of the Motor Vehicle when the Motor Vehicle was purchased, (Sales Tax later replaced as Value Added Tax and now Goods and Services Tax) it has its own provisions for recovery of any amount due. The object of the Motor Vehicle Act is not to ensure a secondary mechanism for recovery of those taxes. The rules, as is well known, are only to effectuate the provisions of the Act and it cannot travel beyond the Act. Here if we see Section 64, the rule making power of the Central Government and Rule 73 of the Central Rules, then in effect what has been prescribed is that in order to get a fitness certificate what is required is a tax clearance certificate in respect of Motor vehicle Tax and pending dues relating to compounding fee. At this stage, if reference is made to Rule 186 of the State rules, we may notice that a compounding fee under or with reference to the Motor Vehicles Act is a liability to pay a fee to compound a default. It arises only when a person has agreed to compound and was thus liable to pay a fee which is not paid in spite of compounding. Thus, there are only two dues, both referable to the Motor Vehicles Act and the vehicle in question i.e. the Motor Vehicle tax and the compounding fee which is due. But, when we come to the State amendment to the rules, they go beyond the rules and the Act itself in providing 'for any government dues' without defining even the words 'any government dues' or 'any other legal action pending in the office of the registering authority'. Even though the proceedings may be contested, the result would be that , if a certificate of fitness is required, then the person requiring the certificate would have to end the litigation or surrender to the authorities and give up the contest by agreeing to compound the matter. This would be destructive of the basic principles of good governance and rule of law. It is for the reasons aforesaid that we have indicated in the beginning that the judgment of the learned single Judge is correct and cannot be faulted with. But the other manner to look for what is to be done would be to read down the provisions of the amendment to make it consistent with the Act and the Rules. We have in detail noted the scope of the rules. Having noted Section 64 of the Act, Section 65 dealing with the State rules, Rule 73 of the Central rule as well as Section 86 and Rule 186 of the State rules, keeping all this in mind, the only way to uphold the newly inserted proviso would be to read that the expression that the vehicle has got 'no government dues', to mean, no government dues under the Motor Vehicles Act or the rules framed thereunder, and the expression 'other legal action pending in that office' to mean, where a person has agreed to compound but has failed to pay the compounding fee. Thus the proviso can be brought in line with the requirements of Rule 73 of the Central rules and limited to that purpose alone and not beyond that. Reading the proviso thus would mean that the clearance certificate in form 'CC' as prescribed by the State, obtained from the original registering authority, would only be in relation to clearance of any dues under the Motor Vehicles Act or the Rules framed thereunder and the arrears of Motor Vehicle tax or any compounding fee, agreed but not paid, and no other matter. Thus read, the proviso would be consistent with the object of the Act and the Rules and the rule making power.”

The law laid down in Varghese's case (supra) is reiterated by another Division Bench of this Court in Regional Transport Officer, Thrissur and another v. Rishad and another (judgment dated 13.12.2017 in W.A.No.2554/2017). The relevant paragraphs of the said judgment read thus: