(2012) 246 KLR 667 IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT: THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN TUESDAY, THE 21ST DAY OF FEBRUARY 2012/2ND PHALGUNA 1933 WP(C).No. 23936 of 2011 (N) ---------------------------------------- PETITIONER(S): ---------------------- R.MANIKANDAN, CHAVADIVILA VEEDU, CHANTHAVILA,KATTAYIKONAM PO, THIRUVANANTHAPURAM. BY ADVS.SRI.M.K.CHANDRA MOHANDAS SRI.SHAKTHI PRAKASH RESPONDENT(S): --------------------------- 1. THE REGIONAL TRANSPORT OFFICER REGIONAL TRANSPORT OFFICE THIRUVANANTHAPURAM 695 001. 2. THE ASSISTANT MOTOR VEHICLE INSPECTOR REGIONAL TRANSPORT OFFICER, KAZHAKOOTAM THIRUVANANTHAPURAM 695 001. R1 & R2 BY SR.GOVT. PLEADER SMT.ANITHA RAVINDRAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21-02-2012, ALONG WITH WPC. 25496 OF 2011 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss W.P.(C) NO.23936/2011 APPENDIX PETITIONER'S EXHIBITS
RESPONDANTS'S EXHIBITS NIL //TRUE COPY// P.A. TO JUDGE tss "CR" P.N.RAVINDRAN, J. -------------------------------------------- WP (C) Nos.23936 & 25496 of 2011 --------------------------------------------- Dated this the 21st day of February, 2012 Head Note:- Motor Vehicles Taxation Act, 1976 - Section 7 - Fitment of unauthorised seats - Held, The RTO should consider the question whether the vehicles were altered by increasing the number of seats in excess of the limit specified in the registration certificates or in the permits, before proceeding to levy the difference in tax. J U D G M E N T A common question arises in these writ petitions. The parties are also the same. These writ petitions were therefore heard together and are being disposed of by this common judgment. The brief facts of the case are as follows: WP (C) No.23936 of 2011 2. The petitioner herein is the registered owner of a contract carriage bearing registration No.KL-22/B 2590. As per Ext.P6 contract carriage permit issued in respect of the said vehicle by the Secretary, Regional Transport Authority, Kazhakkuttam, it is permitted to carry 12 passengers in addition to the driver. 3. The second respondent herein stopped and inspected the petitioner's contract carriage on 26.5.2011 at Karyavattam in Thiruvananthapuram. After inspection he prepared Ext.P1 check report which contains the following entry in column No.9 thereof: "Found vehicle is running with (17+1) seats. But in R/C vehicle is (12+1) seats. Hence C/R prepared for further action". 4. After serving a copy of the check report on the driver of the vehicle who acknowledged receipt thereof, the second respondent issued Ext.P2 memo dated 15.6.2011 calling upon the petitioner to show cause why the contract carriage permit should not be cancelled under section 86 of the Motor Vehicles Act,1988. The petitioner was directed to submit his explanation within seven days from the date of receipt of the memo. The petitioner was also informed that if he is desirous of being heard in person, he may appear before the second respondent at 11 A.M on any working day, before the expiry of seven days with all relevant records in support of his defense. Paragraphs 3 and 5 of Ext.P2 memo, dealing with compounding of offences, were left blank. Upon receipt of Ext.P2 memo, the petitioner submitted Ext.P3 reply dated 18.7.2011 wherein, in paragraph 4 he stated that the vehicle has only 12+1 seats and that the surface of the tool box fitted inside the van ought not have been counted as a seat. He also raised various other contentions and requested that he may be heard before a decision is taken in the matter. The instant writ petition was thereupon filed on 1.9.2011 challenging Ext.P2 memo. 5. The writ petition came up for admission before this Court on 20.9.2011. On that day, this Court while admitting the writ petition passed an interim order directing the first respondent to consider Ext.P3 representation and take an appropriate decision in the matter within two days from the date of production of a copy of the order, after affording the petitioner an opportunity of being heard. The first respondent thereafter heard the petitioner who appeared before him on 29.9.2011 and passed Ext.P5 order whereby he directed the petitioner to remit the sum of Rs.29,977/- towards balace tax for the period commencing from 5.2.2010, the date of registration of the vehicle. The writ petition was thereupon amended incorporating a challenge to Ext.P5 as well. In the amended writ petition, the petitioner seeks the following reliefs : i. "Issue a writ of certiorari or any other writ, order or direction calling for the records leading to Ext.P1 Vehicle Check Report and Ext.P2 charge memo and quash the same. ii. Issue a writ of certiorari or any other writ, order or direction in the nature of certiorari calling for the records leading to passing Ext.P5 and quash and set aside the same. iii. Issue a writ of mandamus or any other writ, order or direction to the 2nd respondent to release the Registration Certificate in respect of the vehicle bearing Registration No:KL-22/B 2590. iv. Issue a writ of mandamus or any other writ, order or direction in the nature of mandamus directing the respondents to dispose of Ext.P3 representation in accordance with law at any rate within a time frame fixed by this Honourable Court". WP(C) No. 25496 of 2011 6. The petitioner herein is the registered owner of a contract carriage bearing registration No.KL-22/A 3435. The second respondent herein inspected the said vehicle on 24.6.2010 and thereafter prepared Ext.P1 check report wherein he stated as follows: "Stopped and checked. Found conducting service with 21 adult passengers from Technopark to Trivandrum. Found the vehicle is fitted with 22 seats. The permitted seat is 13 and hence 9 (Nine) seats are extra provided. The arrangement of seats are as per the figure shown in the margin. Direction given to R/O to remove the extra seats provided and produce the vehicle before the Regional Transport Officer, Kazhakkoottam after rectifying the defects. Check report prepared for N/A". 7. Thereupon, a charge memo dated 24.8.2011 was issued to the petitioner and he submitted Ext.P2 reply. The instant writ petition was thereupon filed on 23.9.2011, challenging Ext.P1 check report and seeking a direction to the second respondent to release the registration certificate of the vehicle. The petitioner had also prayed for an order directing the first respondent to dispose of Ext.P1 representation. When the writ petition came up for admission hearing on 26.9.2011, this Court while admitting the writ petition passed an interim order directing the first respondent to consider Ext.P2 and take an appropriate decision in the matter, within three days from the date of production of a copy of the order, after affording the petitioner an opportunity of being heard. The first respondent thereupon passed Ext.P3 order dated 29.9.2011 and directed the petitioner to remit the sum of Rs.1,36,340/- as balace tax for the period from 6.9.2008 and the additional tax due thereon. The instant writ petition was thereupon amended and in the amended writ petition, the petitioner seeks the following reliefs: i. issue a writ of certiorari or any other writ, order or direction calling for the records leading to Ext.P1 Vehicle Check Report and quash the same. ii. issue a writ of certiorari or any other writ, order or direction calling for the records leading to passing Ext.P3 and quash and set aside the same. iii. issue a writ of mandamus or any other writ, order or direction to the 2nd respondent to release the Registration Certificate in respect of the vehicle bearing Registration No.KL-22/A3435 iv. issue a writ of mandamus or any other writ, order or direction in the nature of mandamus directing the respondents to dispose of Ext.P2 representation in accordance with law at any rate within a time frame fixed by this Hon'ble Court. 8. A counter affidavit dated 24.11.2011 has been filed in both the writ petitions. In the counter affidavit filed in WP(C) No.23936 of 2011, it is stated that when the petitioner's vehicle was checked by the Assistant Motor Vehicles Inspector on 26.5.2011, it was found that the vehicle was running with 17+1 seats, but in the registration certificate the seating capacity of the vehicle is shown as 13. It is stated that as the petitioner was using the contract carriage after increasing the number of seats, but was paying motor vehicles tax in respect of only 12 passengers, the impugned order was passed directing him to pay the tax evaded. Similar contentions have been raised in the counter affidavit filed in WP(C) No.25496 of 2011. 9. I heard Sri.M.K.Chandramohan Das, learned counsel appearing for the petitioner and Smt. Anitha Ravindran, learned Government Pleader appearing for the respondents. I also heard Sri.P.Deepak, learned counsel who was requested to assist the Court. The impugned orders were passed after the vehicles belonging to the petitioner were inspected on different dates and were allegedly found fitted with more number of seats than the number mentioned in the permits and the registration certificates. In the first case, as against 12+1 seats, mentioned in the permit, it is alleged that the petitioner had increased the seating capacity to 17+1 seats. In the second case, it is alleged that the petitioner had increased the seating capacity to 22+1 seats as against 12+ 1 seats mentioned in the permit. By the impugned orders, the first respondent directed payment of the tax alleged to have been evaded, having regard to the dates of registration and the seating capacity of the vehicles. The petitioner had in his explanation denied having increased the seating capacity of the vehicles. His contention in both the cases was that the top of the tool box which is used by the staff for taking rest, when the vehicle is not running, has been erroneously counted as seats by the second respondent. 10. Section 74 of the Motor Vehicles Act, 1988 which governs the grant of contract carriage permits stipulates in clause (iii) of sub- section (2) thereof that the permit shall specify the maximum number of passengers and the maximum weight of luggage that may be carried on the vehicle, either generally or on specified occasions or at specified times and seasons. Section 86 of the Motor Vehicles Act stipulates that the transport authority which granted the permit may cancel the permit or may suspend it for such period as it thinks fit on the breach of any of the conditions specified in section 84 (general conditions attached to all permits) or of any condition contained in the permit. A reading of the charge memos indicate that it was in exercise of the said power that the petitioner was called upon to show cause why the contract carriage permits issued to him should not be suspended or cancelled. However, instead of passing an order suspending or cancelling the permits, the first respondent directed the petitioner to pay the difference in the amount of tax from the date of registration of the vehicles. 11. Section 3 of the Kerala Motor Vehicles Taxation Act, 1976 stipulates that subject to the provisions of the Act, on and from the date of commencement of the 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. Section 3 also empowers the Government to revise the rate of tax specified in the Schedule from time to time subject to the restrictions specified therein. The relevant entries regarding levy of tax in respect of contract carriages in item 7(i) of the Schedule to the Kerala Motor Vehicles Taxation Act, 1976 are extracted below: 7. 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 (i) Vehicles permitted to ply solely as Contract carriage and to carry: (a) Not more than two passengers (Autorickshaw) 60 (b) Three passengers (Autorickshaw) Petrol driven 120 Diesel driven 130 (c) More than 3 passengers but not more than 6 passengers Petrol driven 240 other than tourist motor cabs (motor cab) Diesel driven 260 (d) More than 6 passengers but not more than 12 passengers for every passenger ...... 310 (e) Vehicles permitted to operate within the State- More than 12 passengers but not more than 20 passengers - ...... 530 for every passenger More than 20 passengers - for every passenger ...... 750 (f) Vehicle operating Inter-State- More than 12 passengers -for every passenger ...... 1540 (e) Tourist Motor Cabs Petrol driven 320 Diesel driven 340 The petitioner's vehicles were subjected to tax under item 7(i)(d) extracted above and he was paying tax @ Rs.310/- per passenger, per quarter. By the impugned orders he has been directed to pay the difference in the amount of tax calculated at the rate of Rs.530/- per passenger, per quarter, from the date of registration. 12. Section 7 of the Kerala Motor Vehicles Taxation Act, 1976 reads as follows: "When any motor vehicle in respect of which tax has been paid is altered, used or proposed to be used, in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or the person having possession or control of such vehicle shall pay an additional tax of a sum equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being so altered or used or proposed to be used, and the licensing officer shall not grant a fresh tax licence in respect of such vehicle so altered or used or proposed to be used until such amount of tax has been paid". 13. It is not in dispute that as per the contract carriage permits issued to the petitioner, the petitioner's vehicles are permitted to carry only 12 passengers in addition to the driver. In M.Narasimhaiah v. Deputy Commissioner for Transport, Bangalore [AIR 1988 SC 240] the Apex Court considered the question whether on a stage carriage being found to carry passengers in excess of the number which the operator is allowed to carry as per the permit, the operator can be mulcted with the liability to pay a higher tax. After a survey of the relevant provisions contained in the Karnataka Motor Vehicles Taxation Act, which is pari materia with the provisions of the Kerala Motor Vehicles Taxation Act, 1976 the Apex Court held as follows: 9. It would have been possible to levy higher tax on the appellant only if the words 'which the vehicle is permitted to carry' in item 4(2) of Part A to the Sch. to the Act had been omitted. The Court cannot ignore those words while construing the said item since it relates to the levy of a tax. Moreover the provision in S.8 is specific. It says that the additional tax shall be equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. 10. There is another difficulty in applying S.8 to stray cases of overloading. Additional tax is payable for the period during which the vehicle is proposed to be used for a purpose which will attract a higher rate of tax. The rate of tax is fixed taking one quarter i.e. 3 months as a unit of time for taxation. Is it reasonably possible to determine the higher rate of tax payable, if, say, on two days in a quarter there has been overloading of the vehicle for a few hours or minutes? The problem of computation of additional tax becomes difficult in such cases. 11. There is another important circumstance which persuades us to disagree with the construction placed by the High Court on the relevant provision of taxation in the Act. The rate of taxation in this case is not based on the number of passengers actually carried during any period in a motor vehicle used as a stage carriage but it is related to the number of passengers which the motor vehicle is permitted to carry under the permit. If the number of the passengers carried during any period is less than what is permitted, the registered owner of the motor vehicle does not get any rebate. He has to pay the tax at the rate determined by the number of maximum passengers mentioned in the permit even when the stage carriage is run without any passengers. When that is the position there appears to be no justification to hold that the registered owner or whoever is liable to pay the tax should be made to pay the additional tax merely because on some stray occasions the motor vehicle is found to have carried a few more passengers than the number permitted under the permit since the tax is not levied on the basis of the number of passengers actually carried. 14. The Apex Court also held that a person who has obtained a stage carriage permit exposes himself to the risk of cancellation of the permit under section 60 of the Motor Vehicles Act, 1939 if he carries passengers in excess of the maximum number of passengers that he is permitted to carry under the permit. It was held that the rate of taxation is not based on the number of passengers actually carried, but is related to the number of passengers which the motor vehicle is permitted to carry. 15. In Shiju v. Regional Transport Officer [2010(4) KLT 848] a Division Bench of this Court held that when the tax payable under the charging entry is geared to the number of seated passengers permitted, tax becomes payable for the additional passengers only after permit is modified increasing the seating capacity, which cannot be done retrospectively. It was held that as retrospective enhancement of seating capacity in the permit issued is not possible, retrospective demand of tax for the enhanced seating capacity is also not possible under the changing entry and that section 26 of the Motor Vehicles Taxation Act can apply for recovery of tax for increased seating capacity only from the date on which the Regional Transport Officer directed enhancement of the seating capacity and not before. Shiju v. Regional Transport Officer (supra) related to a stage carriage, the seating capacity of which was fixed under rule 269 of the Kerala Motor Vehicles Rules, 1989 below the permissible seating capacity and that was entered in the certificate of registration. The same mistake was carried over in the permit as well. The owner was remitting tax based on the said entries. Later, on the ground that the seating capacity of the stage carriage is more than the seating capacity recorded in the registration certificate and the permit, steps were taken under section 26 of the Motor Vehicles Taxation Act, 1976 and the owner of the stage carriage was directed to remit arrears of tax for about an year. The learned single Jude dismissed the writ petition filed by the stage carriage operator. Allowing the appeal filed by him, the Division Bench of this Court held that the mistake in the registration certificate which was carried over in the permit and in the tax license leading to short levy of tax, will not justify the demand of tax for the past period in terms of section 26 of the Act and that the short fall in tax can be levied only after the registration certificate is corrected and consequently the permit is also corrected. The Division Bench of this Court did not however consider the applicability of section 7 of the Kerala Motor Vehicles Taxation Act, 1976 evidently for the reason that in Shiju v. Regional Transport Officer (supra) the case was one of reduction of seats from the maximum permissible seating capacity and not an increase in the seating capacity of the motor vehicle. 16. As noticed above, section 7 of the Motor Vehicles Taxation Act stipulates that where any motor vehicle in respect of which tax has been paid is altered, used or proposed to be used, in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or the person having possession or control of such vehicle shall pay an additional tax of a sum equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable, in consequence of its being so altered or used or proposed to be used, and the licensing officer shall not grant a fresh tax licence in respect of such vehicle so altered or used or proposed to be used until such amount of tax has been paid. In the instant case, the first respondent has not entered a finding that the petitioner has altered the motor vehicles in respect of which the impugned orders have been passed in such a manner as to cause the vehicles to become vehicles in respect of which a higher rate of tax is payable. All that he has stated in the impugned orders is that the vehicles are plying with more number of seats than that mentioned in the registration certificate and that fitment of unauthorised seats has resulted in evasion of tax and loss to the Government. The first respondent also held that the petitioner is liable to pay tax at a higher rate from the date of registration of the vehicles. On the terms of section 7 of the Kerala Motor Vehicles Taxation Act, 1976 the first respondent could have passed an order only after entering a finding that the petitioner had altered the vehicles and used them in such a manner as to cause the vehicles to become vehicles in respect of which a higher rate of tax is payable. Upon such a finding being entered, the first respondent could have demanded payment of higher rate of tax in accordance with the entries in item 7 of the Schedule to Motor Vehicles Taxation Act, 1976 depending on the increased seating capacity. That having not been done and a finding having not been entered to the effect that the petitioner had altered the vehicles and used them in such a manner as to cause them to become vehicles in respect of which a higher rate of tax is payable, I am of the opinion that the impugned orders cannot be sustained. The first respondent should have in my opinion considered the question whether the vehicles were altered by increasing the number of seats in excess of the limit specified in the registration certificates or in the permits, before proceeding to levy the difference in tax. I accordingly allow the writ petition and quash the impugned orders and direct the first respondent to consider the matter afresh in the light of the observations made above and in the light of section 7 of the Motor Vehicles Taxation Act, 1976, with notice to the petitioner and decide whether he has altered and used his vehicles in such a manner as to cause them to become vehicles in respect of which a higher rate of tax is payable. Revised orders in the matter shall be passed expeditiously and in any event within one month from the date of receipt of a certified copy of this judgment. If the registration certificates and permits relating to any of the vehicles involved in these cases have been retained, they shall be released to the petitioner, to be held by him subject to the revised orders to be passed by the first respondent. Sd/- P.N.RAVINDRAN, JUDGE. rkc // true copy// PA to Judge |
