The Division Bench upheld the High Court's one-time tax on tourist vehicles at the rate applicable to private vehicles, rejecting the discrimination plea while allowing tax payment in installments.
Tax liability to be paid in six monthly installments starting 07.02.2019 with interest.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
&
THE HONOURABLE MR. JUSTICE ASHOK MENON
MONDAY ,THE 07TH DAY OF JANUARY 2019 / 17TH POUSHA, 1940
WA.No. 2 of 2019
AGAINST THE ORDER/JUDGMENT IN WP(C) 7641/2014 of HIGHCOURT
APPELLANT/S:
S/O.SIVADASAN, S.S.VIHAR, KKNRA 63, VAZHAYILA, KARAKULAM P.O., PIN- 695564, THIRUVANANTHAPURAM.
S/O.KRISHNANKUTTY NAIR, PUNNAKKNU, RODERIKATTU VEEDU, CHAMAVILA, VELLARADA, KUDAYAR P.O.
S/O.HARIDASAN, LALLY BHAVAN, MUDAPURAM P.O., CHIRAYINKEEZHU, PIN- 695314.
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6 NANDAKUMAR, S/O.KRISHNAN NAIR, TC 18/2186, SREESIYA, MANAKKATTUKADAVE, THIRUMALA, PIN- 695006.
BY ADVS.
SRI.P.RAVEENDRAN PILLAI SMT.INDIRA RAVEENDRAN
RESPONDENT/S:
1 THE KERALA TRAVEL OPERATORS ASSOCIATION, REG.NO.ER/766/06, BASIL BUILDING, SHANMUGHAM ROAD, COCHIN- 35, REPRESENTED BY ITS PRESIDENT SOLLY GEORGE, AGED 51 YEARS.
2 RAJU T.K., AGED 52 YEARS S/O.LATE KURIAKOSE, CHERUVATHOOR HOUSE, MAROTTICHODU, EDAPPALLY, COCHIN- 24.
OTHER PRESENT:
SPL GP.SRI P.RAVEENDRANATH
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 07.01.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
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J U D G M E N T
Vinod Chandran, J
The appeal is from the judgment of a learned Single Judge. The grievance agitated before the learned Single Judge by, Kerala Travel Operators Association, which is an association of persons plying tourist vehicles in the State and an owner of such a registered tourist vehicle was that the tourist vehicles were also mulcted with the liability to pay tax similar to that of a private vehicle. The learned Single Judge found legislative competence on the State to impose one time tax and found no reason to interfere with the legislative exercise carried out insofar as levying one time tax on vehicles, including tourist vehicles, at the same rate.
2. The contention of the appellants who are
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individual tourist vehicle operators is that their registration as a tourist vehicle is confined to nine years, they being motor cab owners. Though after nine years the vehicles can be used as a private car, the appellants are persons who purchase the vehicle and register them as tourist vehicles for the purpose of eking out a livelihood. After the period permitted for plying the vehicle, as a tourist vehicle, or even prior to that, the appellants sell off their vehicles to purchase new vehicles so as to continue their vocation. The grievance is that liability to pay one time tax for a longer period, than the period for which they are allowed to ply the vehicle as a tourist vehicle, results in hardship.
3. The learned Single Judge has
specifically looked into the Kerala Motor Vehicles Taxation Act and the amendment brought out by the
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Finance Act, 2014. It is noticed that with respect to vehicles having engine capacity below 1500 CC private vehicles are taxed at 6% for value up to Rs.5,00,000/- and tourist cabs are levied with tax at the rate of 6% even for a vehicle having value up to Rs.10,00,000/-. For private vehicles, a vehicle having price above Rs.5,00,000/- and up to Rs.10,00,000/-, even if engine capacity is 1500 CC, the levy is at the rate of 8%. Above Rs.10,00,000/- the vehicles have been classified on the basis of their value and tax levied uniformly for private and tourist taxi vehicles. As has been found by the learned Single Judge, there can be no hostile discrimination alleged since it is competent for the legislature to bring within the same ambit different classes for the purpose of levy of tax. The mere fact that different classes of persons have been levied the same amount of tax
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would not by itself bring in an infirmity on the ground of discrimination unless there are other compelling factors to indicate that the different classes are to be treated differently for the purpose of levy of tax.
4. The only contention urged before us is
that the individual taxi operators are eking out their livelihood with the registered tourist vehicles and are forced to sell off the same after nine years since the tourist vehicle permits seizes on expiry of the said period. Definitely the fact that the vehicle is one which has paid up tax for 15 years results in a nominal escalation of price. Otherwise the purchaser would having the liability to satisfy future tax and this could result in proportionate reduction of value. Be that as it may, we do not think that this is a ground on which
the court can interfere with the levy made
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competently by the State sourcing its power to Article 245 of the Constitution of India. We are also fortified in our view by another decision of yet another Division Bench of this Court dated 29.05.2017 in W.A No.732/2017 and 736/2017 (Raju T K v. State of Kerala).
5. Reference can also be made to the
observations of the Constitution Bench of the Supreme Court in Federation of Hotels and Restaurant vs.Union of India ( AIR 1990 (SC) 1637) which is extracted below:
“It is now well settled that though taxing laws are not outside Art.14, however,having regard to the wide variety of diverse economic criteria that go into the formulation of a fiscal- policy legislature enjoys a wide latitude in the matter of selection of persons, subject matter,events, etc, for taxation. The tests of the vice of discrimination
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in a taxing law are, accordingly, less rigorous. In examining the allegations of a hostile, discriminatory treatment, what is looked into is not its phraseology, but the real effect of its provisions. A legislature does not, as an old saying goes , have to tax everything in order to be able to tax something. If there is equality and uniformity within each group, the law would not be discriminatory. The legislature can exercise an extremely wide discretion in classifying item for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes. "
6. On the above reasoning we reject the
appeal, but, however, with the reservation that the appellants may be permitted to pay tax in installments. The respondents shall allow six monthly installments for payment of the tax and
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interest starting from 07.02.2019 and continued on
the 7th of every succeeding month. On two consecutive defaults being made, the State shall be entitled to proceed for revenue recovery.
The appeal would stand rejected. No order
as to costs.
Sd/K. Vinod Chandran, Judge
jma
Sd/Ashok Menon, Judge
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APPENDIX
PETITIONER'S/S EXHIBITS:
ANNEXURE A1 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 1ST APPELLANT DATED 16.05.2018.
ANNEXURE A2 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 2ND APPELLANT.
ANNEXURE A3 TRUE COPY OF THE DEMAND NOTICE IN RESPECT OF THE 3RD APPELLANT DATED 15.12.2018.
ANNEXURE A4 TRUE COPY OF THE DEMAND NOTICE SERVED ON THE 4TH APPELLANT DATED 30.06.2018.
ANNEXURE A5 TRUE COPY OF THE DEMAND NOTICE SERVED ON THE 5TH APPELLANT.
3 issues framed by the court
Whether the State Legislature has competence to impose a one-time tax on tourist vehicles at the same rate as private vehicles.
Whether the levy of equal tax rates on different classes of vehicles amounts to unconstitutional discrimination.
Whether the fact that tourist vehicle registration permits expire after nine years justifies interfering with the tax levy.
Colour shows how this judgement treated each authority
Raju T K v. State of KeralaAffirmed¶54
Raju T K v. State of Kerala, (2017) 7 MLJ 568
Federation of Hotels and Restaurant vs. Union of IndiaRelied on¶56
Federation of Hotels and Restaurant vs. Union of India, AIR 1990 (SC) 1637 · Who else cites this
3 provisions across 3 enactments
SAJEEV KUMAR S.S.
Raju T K
THE KERALA TRAVEL OPERATORS ASSOCIATION
STATE OF KERALA
K. VINOD CHANDRAN
ASHOK MENON
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
