VIJAYAN Vs. TAHSILDAR

JUDGEMENT

(1.) The question raised in the Writ Appeal is whether in the course of recovery of motor vehicle tax along with additional tax for default payable under Section 12 of the Kerala Motor Vehicles Taxation Act (hereinafter called "the MVT Act") default interest under Section 6 of the Revenue Recovery Act (hereinafter called "the RR Act") also could be recovered by the Revenue Recovery authorities. Learned Single Judge upheld demand of interest under Section 6 of the RR Act against which the Writ Appeal is filed. We have heard counsel appearing for the appellant and also Government Pleader for the respondents. The arrears of tax involved in this case is due for a stage carriage operated by the appellant. Vehicle fell in arrears of tax for the year 1999. The R.T.O. recommended recovery of motor vehicle tax and additional tax due under Section 12 of the MVT Act for recovery under the RR Act. The vehicle involved was seized and sold by the Revenue Recovery authorities for Rs. 40,500/- in the year 2001 and after adjusting collection charges the balance amount was credited towards arrears of tax. When the second vehicle was attached, the appellant approached this court and in terms of the interim orders issued by this court, appellant on 26.6.2007 paid arrears of motor vehicle tax and also collection charges demanded by the Revenue Recovery authorities. However, in addition to recoveries so made, the Tahsildar has served a demand notice for recovery of a further sum of Rs. 25,384/- towards interest due under Section 6 of the RR Act, against which the appellant approached this court with the writ petition which was dismissed by the learned Single Judge, the correctness of which is the matter to be decided by us in this Appeal.

(2.) The contention raised by the appellant is that additional tax payable under Section 12 of the MVT Act is actually default interest the maximum of which is 50% of the tax. However, Government Pleader contended that additional tax payable under Section 12 is an independent levy by itself for default committed by vehicle owners liable to pay motor vehicle tax and though it is for default, it cannot be treated as interest in the first place. The second contention of the Government Pleader is that when tax and additional tax are recommended for recovery by R.T.O. which is recoverable as arrears of land revenue due as per Section 13 of the MVT Act, interest payable under Section 6 of the RR Act is automatic and the defaulter has no escape from it. Even though in principle the contention of the Government Pleader is tenable, we notice a distinction in regard to interest payable under Section 6 of the RR Act in the course of recovery of arrears of motor vehicle tax because of the operation of Section 12 of the MVT Act which is default-tax geared to the period of delay in payment of tax. Section 12(1) and (2) and Section 13 of the MVT Act are extracted hereunder for easy reference:

(3.) In this case Revenue Recovery is initiated for recovery of arrears of tax as well as additional tax for the maximum period of default for which additional tax is payable under Section 12 of the MVT Act and so much so, interest was rightly charged on appellant. We, therefore, do not find any merit in the challenge against the demand of interest under Section 6 of the RR Act. Accordingly Writ Appeal is disposed of directing the R.T.O. to verify the factual position in regard to period of" default and the recoveries and adjustments so far made and limit the interest liability due under Section 6 of the RR Act only for the period of delay in payment/recovery after the expiry of first six months of the period of default for which only additional tax could be recovered under Section 12 of the MVT Act. So far as the collection charge payable under Section 5 of the Revenue Recovery Rules is concerned, it should be limited to the amount recovered by sale of the vehicle and no collection charges should be demanded from the appellant for the voluntary payment made based on interim orders issued by this court. The Revenue Recovery Authority is directed to recompute liability for interest payable as on the date of full payment of arrears of tax made by the appellant. Appellant is granted time till 30.9.2012 to clear the balance arrears of interest due after setting off collection charges recovered on voluntary payment against interest liability on which no further interest should be charged, if appellant makes payment as above.