TRAVANCORE TEA CO. LTD. ETC. v. STATE OF KERALA AND ORS

Citation: [1980] 3 S.C.R. 1388

Court: Supreme Court of India

Bench: S. MURTAZA FAZAL ALI, P.S. KAILASAM

Case summary

(Entry 57 in List II of the Constitution: relates to taxes on vehicles, whether mechanically propelled oo not,. 12-4-68 held that the 13 vehicles mentioned in the Original Petition were liable to pay ~ax under the Act.

Judgment text

TRAVANCORE TEA CO. LTD. BTC. v. STATE OF KERALA AND ORS. June 3, 1980 [S. MURTAZA FAZAL Au AND p, S. 'KAILASAM, JJ. ] Ker:Jla Moror Vehicles Taxation Act (Act 24 of 1963) S rires the levy on vehicles suitable for use tm roods. [1393 B-EJ 3. In order to l~vy a tax on vehicles used or kept for use on public roads of the Stare and at the same time to avoid evasion of tax the legislature has prescribed the procedure. Under sub section 2 of section 3 there is a ·pre- "1llllption that a motor vehicle for which l,he certificate of regisjration is ::"\;~t shall be deemed to be used or kept for use in the State. Section 3(2) ~eguanls the revenue of the State by relieving it from the burden of proving - ·tbBt the vehicle was used or kept for use on the public roods of the State. At tfu same time the interest of the bonafide ownel'ls safeguarded by enabling him to claim and obtain a certificate of non-user from the prescribed authority. .

In order to enable the owner of the vehicle or the person who is in pos. 5e'SSion ·or being in control of the motor vehicles of which the certificate Of registration is c;urrent to claim exemption from tax he should get a certificate in the prescn'bed manner from the Regional Transport Officer. Section 5 provides far exemption from payment of tax under certain circumstances. Section 6 ·enables the registered owner or a person in possession or control of su,ch vehicle to get refund of tax if the conditions specified therein are satisfied. Thus in order to enable the registered owner or person in possessiOI;l or control of a vehicle ~o get exemption of tax, ad. van. Ce intimation to the R. T. O. along with the surrender of certificate of registration iS necessary. The provision of t-- s. 3 sub-sec. (2) as well as s. 5 and s. 6 are meant to prevent e"VBSion of tax . and to provide for exemption from tax in proper cases. Though the purpose ·of.

the Act is to tax vehicles that are used or kept for use on the public roads o0f the State, the State is entitled for the purpose of safeguarding the revenues of the State and to prevent evasion of the nu to enact provision like provision as in s. 3 raising a presumption that the vehicle is used or kept for 11se in the State witlwut any further proof unless exemption is claimed under s. 3(2), ·~· 5 and s. 6. [1393 G-H, 1394 A-G] '-1r---. { In order to claim exemption from payment of tax requirements of s. 3(2) . or "ss. 5 and 6 should be. satisfied. Surrender of the registration certifioote . contemplated under s. 5 is for me. king sure that the motor veh~cles is not being put to any use and does not have the effect of annulling the 'certificate of registration. If the requirement contemplated under the Act is not satisfied the re~red owner or person in possession or coptrol of the vehicles would not be entitled to claim any exemP! ion from payment of tax. [1394 H, 1395 A-BJ n fo- 5.

The Kerala Motor Vehicles Taxation Ac~ 1963 (Act 24 of 1963) came into force on 18-3-63. Section 2(1) of the Taxation Act provides that words 3nd expression used but not defined in the Motor Vehicles Act, 1939 (Centr:tl :Act. 4 of·1939) shall have the meaning respectively assigned to them in :! Mt Act. On the date when the Kerala Motor Vehicles Taxation Act was . enacted,. Motor VehiCles Act 1939 was amended (by Act 100 of 1956) and . the ~oded definition on the date when the Taxation Act came into force . exempted o!! ly motor vehicles wbicli are of a special type adopted for use l ' only in . factory or in any other enclosed premises. This amended defi,nitioo will have to be read· into the Taxation Act which was enacted subsequent to the date of the amendment (by Act 100 of 1956) of the definition of "mo! D shall be levied onl all Motor Vehicles used or . keptl for use in the State.

" The appellant company owned 17 motor vebi- r cles, tractors, trailers and lorries all of which are registered in tbe_t • company's name under the Motor Vehicles Act. The company alleged that the vehicles were purchased by it solely and exclusively &'. Ji' use in the estates and intended to be used only for agricultural purposa and were not used nor kept for use ·in the State as contemplalsl . Iunder s. 3 of the Act. The compwiy is a tea plantation having eighi . estates which lie contiauous to each other and have an extent of ) "TRAVANCORE TEA co. v. STATE OF KERALA (Kailasam, !. ) 1391 9422. 44 . acres in the aggregate. Til_e company for the purpose of plantation are maintaining roads fit for vehicnlar traffic in the eight estates covering a length of 131 miles in the . aggrega~e.

On 23rd September, 1964 a Bedford Lorry owned by the company an reading sections 3, 5 and 6 it is clear that a levy of tax is contem· r plated only on the vehicles that are used or kept for use on the public roads of the State. ~· 'While we agree with the contentio~s of the learned counsel for the appellant that the tax is only exigible on vehicles used oc kept fur use on public roads, we must observe that in order to claim exemption from payment of ~ requirements of s. 3(2) or ss. 5 and 6 should be ~atisfied. Surrender of the registratlon certificaie TRAVANCORE TEA co. v. STATE OF KERALA (Kai/asam, l. ) 1395 •contemplated under s. 5 is for making sur~ . that the motor vehiclei A' ·is not being put to any use andj does not have the effect of annulling the· certificate of registration. If the requi=ent contemplated under the Act iS not satisfied the registered owner or person in posssession or. control of the vehicle would not be entitled to claim any exemptionJrom payment of tax'.

it remains for consideration as to what is the appropriate order that should be passed on the facts and circumstances of this 'c:ise: As a general proposition of law as exemption ~from payment of ! aX;had not been claimed and obtained as required under this Act,. the appe1- · . ! ant would be liable to pay tax but as already pointed out and set out clearly in the onler of the R. T. O. , the question that was raised and ·disputed was whether on the assumpti-On that the vehicles were kejJil: for use in the estates ;i. Ione and not for use on the public roads of the ·State, tax is leviable. The authorities proceeded on the basis that ·even assuming that the vehicles were not intended to be used on the public roads, they are liable to tax. _In this view, the appellant did not apply for exemption or notify non-user as required under thel piovi<;kms of the Act- But on the facts :ind circumstances of the case it is clear that the appellant claimed f.

or exemption from tax on thei grounrl that it was not1being u-'ed on the public roads. In the circumstances of the case we have to take it that though, in terms, requiremen; of ss. 3 and 5 have not been complied "ith, in effect the requireiments have been satisfied as the dispute proceeded throughout or\ that basis. But as has been specifically stated by the R. T. 0. , the question whether estate roads. are public roads is reserved for further investigation and decision. · Equally the R. T. O. will be at liberty to act un<ler s. 5(2) of the Act and decline exemption from tlie: liability to pay tax for the relevant period if on verification it is found that the , vehicle has been used during that period on the public road. ' .. ~ Before concluding, we would refer to a contention miSed. by the · learned counsel based on the. decision of this Court in Boiani Ores Ltd. v. Orissa, (supra).

The plea of the learned couasel is that the word "motor vehicle" should be understood as defined by s. 2(18) • '+ of the Motor V"hicles Act, 1939 and excluded from taxation motor ; I . vehi<:les "used solely upon the premises of the owner. " As the vehicles ' ·\vith which we are concerned were claimed to have been kept for use . ·~ solely in the premises of the . company, it was contended that the vehicles are not exigible to tax. This Court in the decision cited was dealing with the Orissa Motor Vehicles Taxation Act, 1930. Section ·2(c) of the Orissa Taxation Act adopted the definition of Motor ·vehicles Act as found in Motor Vehicles Act, 1914. The Motot'. -vehicles Act, 1914 was repealed and replaced by the Motor Vehicles Act, 1939. The definition of 'motor vehicle' in s. 2(18) of the Motor Vehicles Act, 1939 excluded motor vehicles used solely upon· thee pmnises ct. the owner.

The Orissa Motor vehicles Taxa,tion Act wa& amended and Orissa Amendment Act, 1943 re-enacted the provisions Of the Taxation Act. 'Motor Vehicles' was defined under s. 2 ( 18) of the Motor Vehicles Act, 1939 excluding vehicles used solely upoo; the premises Of the OWller. Subsequently the definition ct. 'motor, • vehicle' under s. 2(18) of the Motor Vehicles Act was amended by , die Act 100 of 1956 which confined the exemption from tax~tion to • "motor vehicles of a ·special type adopted for use only in a fact. Ory 'QI in any other enclosed premises. " The exemption from tax CllII· only be claimed after amendment to s. 2(18) by Act, 100 of 19S6, if the vehicle was of special type ado¢ed for use only in a fact. ocy ;(_ or in any other enclosed premises and the exemption that was srailable before the amendment by Act 100 of 1956 to Motoc Vdlldes used solely upon the premises of the owner was taken away. This.

Court held "if the subsequent, Orissa Motor Vehicles TBXMion (Amendment) Act, 1943, incorporating the definition ct. 'motor: vehicle' referred to the definition of 'motor vehicle' under the Ari. as then existing, the effect of this legislative method would, in our view, amount to an incorporation by reference of the provisions of s. 2(1); of the Act in s. 2(c) of the Taxation Act . Any subsequent ameodment in the A! :t or a total repeal of the Act under a fresh legislation. on that topic would not affect the definition of 'motor vehicle' in· s. 2(c) of the Taxation Act. " As a result this Court held that fue definition of 'motor vehicle' given in s. 2(18) of the Motoc Veiticles . Act, 1939 before the amendment by Act 100 of 1956 was applicable. Relying on this decision, the learned counsel submitted that the test that is to be applied to determine whether motor vehicle is l1able to· tax or not is whether it comes under the exemption provided by under s.

2(18) of the Motor Vehicles Act, 1939 before the amendment.. We / are unable to accept the contention mainly on the ground that the "i Kerala Motor Vehicles Taxation Act, 1963 (Act 24 of 1963) came · into force on 18-3-63. Section 2(1) of the Taxation Act provide& that words and expression used but not defined in the Motor Vehicle11 Act,. 1939 (Central Act 4 of 1939) shall have the meaning respectively assigned to them in that Act. On the date when the Kerala Motor t Vehicles Taxation Act was enacted, Moto~ ~hicles Act 1939 was ·amended by Act 100 of 1956 and the amended definition on the date 1' • when the Taxation Act came into force exempted only motor vehicles. which are of a special type adopted for use only in a factory or in any other enclosed premises. The amended definition will have to be read II into the Taxation Act which was enacted subsequent to the date of the· amendment of the definition of 'Motor Vehicle' by Act 100 of 1956< TRAVANCORE TEA co. v.

STATE OF KERALA (Kailasam, !. ) 139 7 In this vi. ew we feel that the decision in Bolani's case (supca) will not A. be of any assistance to the learned counsel for the appellants. The appeals are allowed to thei extent indicated above. But in the circumstances there will be no order as to costs. S. R. 1. ppeals allowed in part. \