SHIJU Vs. REGIONAL TRANSPORT OFFICER

JUDGEMENT

(1.) The question raised in the connected appeals is whether the learned single Judge was justified in upholding the additional demand of motor vehicle tax made under Section 26 of the Kerala Motor Vehicle Taxation Act, 1976, hereinafter called the "Act" in relation to additional seats permissible in terms of the seating capacity of the vehicle under Rule 269 of the Kerala Motor Vehicles Rules, hereinafter called the "Rules" over the actual number of seats for which registration and permit are granted under the Motor Vehicles Act. We have heard counsel appearing for the appellants in all the appeals and Government Pleader for the respondents. There is no dispute on facts which led to the controversy inasmuch as appellants operating stage carriages were remitting tax in terms of the tax endorsement in the RC book which is consistent with the details contained in the certificate of registration and the permit issued by the licensing authority. Respondents' case is that tax is payable based on seating capacity of the stage carriage and the escapement in payment of tax happened because of lower number of seating capacity recorded in the RC book and in the permit. Admittedly seating capacity is to be determined in respect of a stage carriage based on wheel base in terms of Rule 269 of the Rules. The Registering Authority however while issuing RC book for the vehicles involved in these cases recorded seating capacity less than the permissible capacity based on wheel base under Rule 269 of the Rules. In fact, when permits were issued for these vehicles the mistake contained in the RC book was repeated inasmuch as seating capacity recorded in the RC book was incorporated in the permits. In other words, the tax endorsement for the stage carriages was made in the RC book based on permitted seating capacity in terms of Section 3(1) read with Entry 7 (ii)(a) of the Schedule to the Act. Appellants have been remitting tax in terms of tax endorsement and there is no dispute on this. However, later, the taxation authority, which is the same as the registering authority under the M.V. Act, issued notice under Section 26 of the Act pointing out that seating capacity of the appellants' stage carriages is more than the seating capacity recorded in the RC book and in the permits issued to them. Consequently, alterations were proposed and appellants were simultaneously called upon to remit arrears of tax under Section 26 of the Act. It is against these orders that the appellants have filed Writ Petitions which have been dismissed by the learned single Judge upholding the demand of differential tax for the past period, which runs into a little over one year.

(2.) Before us counsel appearing for the appellants Sri. K.V. Gopinathan Nair and Sri. P. Deepak, contended that appellants have no liability to pay tax for the past period because they paid tax in terms of tax endorsement in the RC Book which again is made based on seating capacity recorded in the RC book as well as in the permits issued to them. Government Pleader on the other hand contended that short levy of tax could be made up in proceedings under Section 26 of the Act, irrespective of reasons which led to such short levy. According to him, in these cases, even though the mistake could have been committed by the taxation authority, which is also the registering authority, as well as Secretary of the RTO issuing permit, still arrears of short levy could be recovered in proceedings under Section 26 because what is stated in the said Section is that if there is short levy of tax "for any reason" it could be made up in proceedings under Section 26 of the Act. Government Pleader has also relied on Full Bench decision of this Court in VISHWANATHAMENON V ADDL. REGISTERING AUTHORITY, 1998 2 KerLT 112 and the earlier decision of the learned single Judge, who dismissed the present Writ Petitions in A.K.C. VELAYUDHAN V. RTO,2010 1 KerLT 565, for the proposition that tax for the stage carriage has to be recovered based on seating capacity which is to be determined based on wheel base in terms of Rule 269 of the Rules.

(3.) After hearing both sides and after going through the judgments above referred, we are of the view that on the legal position with regard to tax liability on stage carriages, there can be no doubt that Rule 269 provides for determination of minimum seating capacity based on wheel base. However, the question to be considered is whether a mistake committed by the registering authority while issuing registration certificate of the stage carriages and the repetition of the same mistake by him while issuing permit and the consequent short levy of tax could be made up in proceedings 26 of the Act. Section 3 (1) of the Act provides for levy and collection of tax at the rate specified for such vehicle in the Schedule. The Entry in the Schedule to the Act applicable to these cases is Entry 7(ii)(a) which is as follows: