SANITHJAN S. Vs. UNION OF INDIA

JUDGEMENT

(1.) These writ petitions have been filed challenging the demand and collection of tax under the provisions of the Kerala Motor Vehicle Taxation Act, 1976 (hereinafter referred to as the 1976 Act) on tourist vehicles holding a permit in terms of the provisions contained in the All India Tourist Vehicles (Permit) Rules, 2023 (hereinafter referred to as the 2023 Rules) which were brought into force in supersession of All India Tourist Vehicles (Authorisation or Permit) Rules, 2021 (hereinafter referred to as the 2021 Rules).

(2.) It is the case of the petitioners that upon the tourist vehicles operating in more than one State obtaining a permit under the provisions of the 2023 Rules, no further 'authorisation fee/border tax' can be collected under the provisions of the 1976 Act. According to the petitioners, the 2021 Rules provided for the collection of authorisation fees/border tax by respective State Governments for plying of tourist vehicles having an All India Permit within the respective States and the quantum of such authorisation fee/border tax was also specified in the 2021 Rules. It is stated that, on 18/4/2023, the Union of India, in exercise of the powers conferred by sub-sec. (14) r/w. sub-sec. (9) of Sec. 88 of the Motor Vehicles Act, 1988 (hereinafter referred to as the 1988 Act) and in supersession of the 2021 Rules brought into force the 2023 Rules doing away with the provision for collection of authorisation fee/border tax by the various States Governments from tourist vehicle operators holding a valid All India Permit. It is submitted that, through an advisory, all State Governments and Transport Commissioners of all the States and Union Territories were advised not to levy any other kind of taxes or fees from tourist vehicles holding a valid permit issued under the 2023 Rules. It is stated that some of the petitioners had earlier approached the Supreme Court of India by filing a petition invoking Article 32 of the Constitution of India which was subsequently disposed of permitting the respective petitioners to approach the High Court. It is submitted that Ext.P11 order has been issued by the Transport Commissioner (Kerala), without the authority of law, requiring the collection of tax under the provisions of the 1976 Act even in respect of vehicles holding a permit in terms of the 2023 Rules.

(3.) Sri. P. Deepak, the learned Senior Counsel appearing for the petitioners on the instructions of Adv. Mahesh Sankarasubban Sahasranaman contends that the demand for payment of tax under the 1976 Act in respect of vehicles holding a valid permit issued under the 2023 Rules is clearly illegal and unsustainable in law. It is submitted that Entry 57 of List II of the VIIth Schedule to the Constitution of India which permits the State to make law for the levy of taxes on vehicles is expressly subject to the provisions of Entry 35 of List III which authorises making of law relating to mechanically propelled vehicles 'including the principles on which taxes on such vehicles had been levied'. It is submitted that the 2023 Rules is a piece of legislation traceable to Entry 35 of List III. It is submitted that by virtue of the provisions contained in Article 254 of the Constitution of India, Union legislation in respect of subjects specified in List III, whether earlier to or later to the State legislation, will prevail and the State legislation will, to the extent of inconsistency, be inoperative. He submits that the judgment of the Supreme Court in State of Assam and others v. Labanya Probha Devi; AIR 1967 SC 1575 has considered the two entries namely Entry 57 of List II and Entry 35 of List III and has held that the Entries deal with different matters, though the subjects appear to be allied ones. It is submitted that, while Entry 57 of List II deals with taxes on vehicles, Entry 35 of List III denotes rules of guidance in the matter of taxation. It is submitted that the 1976 Act does not contain any provision laying down any principles of taxation and therefore, it cannot be said that the 1976 Act is a 'ragbag' legislation drawing sustenance from both Entry 57 of List II and Entry 35 of List III. It is submitted that though the 1988 Act (a legislation relatable to Entry 35 of List III) contains no provision laying down any principle of taxation it is open to the delegate under that legislation (the Union Government) to make rules laying down 'principles of taxation' and if it chooses to do so, the provisions of the 1976 Act would be subject to the same. It is submitted that the expression 'law made by Parliament/Legislature of a State' in Art.246 of the Constitution of India includes not only plenary legislation but also subordinate legislation and that subordinate legislation also answers to the definition of 'law'. The learned counsel placed reliance on the judgments of the Supreme Court in Edward Mills Company Ltd., Beawar and others v. State of Ajmer and another; AIR 1955 SC 25 and Jayantilal Amratlal Shodhan v. F.N. Rana and others; AIR 1964 SC 648 in support of this contention. He relied on the decisions of the Supreme Court in Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and another v. Union of India and others; AIR 1960 SC 554, Uttar Pradesh Power Corporation Ltd. v. National Thermal Power Corporation Ltd; (2009) 6 SCC 235, Udai Singh Dagar and others v. Union of India and others; (2007) 10 SCC 306, State of Rajasthan and others v. Basant Nahata; (2005) 12 SCC 77 and St. Johns Teachers Training Institute v. Regional Director, NCTE and another; (2003) 3 SCC 321 to establish the status of a delegated legislation. He referred to the provisions of the 2023 Rules and the provisions of Ss. 88(9), 88(14) and 212 of the 1988 Act and attempted to establish that the 2023 Rules is 'law' relatable to Entry 35 of List III. It is submitted that, if the 2023 Rules qualify as a law under Entry 35 of List III, any law made by the State Legislature under Entry 57 of List II will be subject to the provisions of the 2023 Rules. It is submitted that the view taken by this Court while considering a similar plea on the basis of 2021 Rules in the interim order dtd. 8/11/2022 in W.P.(C)No.34572/2022 and connected cases is not the correct view in law and also that the principles culled out in that order from the decisions of the Supreme Court in Government of Andhra Pradesh and others v. P. Laxmi Devi (Smt); (2008) 4 SCC 720 and Kerala Samsthana Chethu Thozhilali Union v. State of Kerala and others; (2006) 4 SCC 327 have no application to the facts of the present case. Lastly, he again referred to the provisions of Sec. 212 of the 1988 Act and to the effect of laying Rules before Parliament. He thus contends that the petitioners in these cases are entitled to the reliefs sought for in the respective writ petitions.