Mini Dileep vs Regional Transport Officer

V. Chitambaresh, J.—Is an operator of a stage carriage who has defaulted service liable to pay tax at the rate applicable to a transport vehicle under the Kerala Motor Vehicles Taxation Act, 1976 (''the Act'' for short) when substitute temporary permits had been granted to others to operate service in his vacancy? The Regional Transport Officer demanded a sum of Rs. 1,99,460/- (Rupees One lakh ninety nine thousand four hundred and sixty only) as tax under the Act from the petitioner for his stage carriage. The demand was in respect of the stage carriage bearing registration No. KL 068357 operating service on the route Nere Kadavu - Velloor for the period from 1.10.2009 to 30.6.2011. The petitioner contended that the vehicle was damaged in a fire that broke out in rioting on the eve of election on 15.4.2009 and had ceased to be operational for quite some time. The petitioner pointed out that substitute temporary permits had been granted to others to operate service on the route in the vacancy caused due to his default. It was also the case of the petitioner that the route permit granted to him expired on 9.8.2010 and that he cannot be mulcted with the liability to pay tax at the rate applicable to a transport vehicle thereafter. It was however a conceded fact that the vehicle could not have been plied as a transport vehicle beyond the month of December, 2010 when the same completed fifteen years of service and was incapable of being so used.

The demand as aforesaid was affirmed in appeal under S. 23 of the Act by the Deputy Transport Commissioner and in further revision under S. 24 of the Act by the Transport Commissioner. The same marked exhibits P2, P3 and P5 in the Writ Petition are seriously assailed on the ground that the petitioner is at best liable to pay tax at the rate applicable to a non-transport vehicle. The demand was sustained by the authorities mainly for the reason that the petitioner had not given previous intimation about the non-use of the vehicle in Form G. Such previous intimation was warranted under S. 5 of the Act read with R. 10 of the Kerala Motor Vehicles Taxation Rules, 1975 (''the Rules'' for short). The authorities had placed reliance on S. 3 of the Act to justify the demand of tax at the rate applicable to a transport vehicle on the ground that the motor vehicle was used or kept for use in the State.

I heard Mr. O.D. Sivadas, Advocate on behalf of the petitioner and Mr. Shaij Raj T.K., Government Pleader on behalf of the respondents.

It is admitted in the counter affidavit filed on behalf of the Deputy Transport Commissioner that substitute temporary permits had been granted to operate service in the defaulted vacancy of the petitioner. The following are the details furnished in the counter affidavit as regards the substitute temporary permit granted to other operators under S. 87(1)(c) of the Motor Vehicles Act 1988:

The counter affidavit proceeds on the basis that the temporary permits as above were issued only for short durations and that the petitioner is otherwise obliged to pay tax for the whole period at the rate applicable to a transport vehicle.

It is trite law that every vehicle in the State is presumed to be used or kept for use in the State unless the said statutory presumption flowing from S. 3 of the Act is rebutted by the procedure laid down under the Act. The rate of tax for such vehicle is however specified in the schedule to the Act wherein the class of vehicles and the rate of quarterly tax payable are indicated. Serial No. 7 of the schedule deals with motor vehicles plying for hire and used for transport of passengers and in respect of which permits have been issued under the Motor Vehicles Act. 1988. The vehicle cannot be said to have been ''used for transport of passengers'' when substitute temporary permits had admittedly been issued to other operators to conduct service in the defaulted vacancy. The operator of a defaulted service can at best be made liable to pay tax at the rate applicable to a non transport vehicle under the residuary clause in serial No. 12 of the Schedule to the Act. The liability to pay tax at the rate applicable to a transport vehicle arises only in respect of a vehicle plying for hire and used for transport of passengers and in respect of which permits have been issued.

A Division Bench of this Court had adopted the same view in R.P. No. 821/2011 in W.A. No. 113/2011 and R.P. No. 830/2011 in W.A. No. 114/2007 wherein it was observed as follows:

If the vehicle was not operating and substitute vehicle only was operating, then tax payable is only at the non-transport rate and not at the rate applicable to stage carriages.

Similarly the vehicle could not have been used for transport of passengers in circumstances like the expiry of the validity of the fitness certificate or expiry of the route permit. Only tax at the rate applicable to a non-transport vehicle kept idle need be paid as per the residuary clause in serial No. 12 of the Schedule to the Act under the contingencies aforesaid. It was also the case of the petitioner that the route permit granted to his vehicle was valid only upto 9.8.2010 and that it could not have been used as a transport vehicle beyond the month of December, 2010. The authorities had blindly fastened the liability to pay tax at the rate applicable to a transport vehicle for the whole period for the mere reason that intimation in Form G was not given.

There is no option but to quash Exhibits P2, P3 and PS orders passed by the Regional Transport Officer, the Deputy Transport Commissioner and the Transport Commissioner and I do so. The assessment of tax under the Act for the period demanded (1.10.2009-30.6.2011) is remanded to the Regional Transport Officer who shall complete the exercise in the light of the observations above. The liability to pay tax at the rate applicable to a transport vehicle shall be redetermined afresh with due notice to the petitioner within a period of two months from the date of receipt of a copy of this judgment.

The Writ Petition is allowed. No costs.