ANAS Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE Writ Petitions are filed by the purchasers of new vehicles challenging the newly introduced provisions for the payment of "one time tax" applicable to the newly purchased vehicles. The petitioners are owners of newly purchased vehicles of different brands. According to the petitioners they had purchased different models and a temporary registration certificate was given to them. After the purchase of the vehicle it has to be produced before the registering authority for permanent registration. When the vehicle is registered the tax endorsement will be given for payment of tax in respect of the vehicles and now the tax endorsement will be at the rates prescribed as per the new amendment made-to the Kerala Motor vehicles Taxation Act as per the Kerala Finance Bill 1998 as one time tax. As per the Kerala Finance Bill, 1998 and replaced by the Kerala Finance Act, 1998, the amendment has been made to S. 3 (1) of the Kerala Motor Vehicles Taxation act, 1976 by introducing a proviso thereto and annexure in the Act where a new type of tax named as one time tax to the new motor vehicle is imposed. As per the said annexure for vehicle weighing not more than 750 kgs. of unladen weight, tax has to be paid to the tune of Rs. 14,000/ -. The Kerala Finance bill, 1998 together with the settlement of objects and reasons, the financial memorandum in the memorandum regarding delegated legislation was published under R. 69 of the Rules of Procedure and Conduct of Business in the Kerala legislative Assembly. The Kerala Finance Bill, 1998 with Annexure dated 20th march, 1998 is reproduced hereunder: "government of Kerala. reg. no. kl/tv (n)12 KERALA GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY Volxlffl Thiruvananthapuram 20th March 1998 525 7th chaithra 1920 SECRETARIAT OF THE KERALA LEGISLATURE NOTIFICATION No. 269/ Legn-1/98/ Leg. Dated, Thiruvananthapuram, 28th march, 1998 The Kerala Finance Bill, 1998 together with the settlement of Object and Reasons, the Financial Memorandum in the Memorandum regarding Delegated Legislation was published under R. 69 of the Rules of procedure and Conduct of Business in the Kerala Legislative Assembly. R. Rajendra Babu. Secretary, Legislative Assembly PRINTED AND PUBLISHED BY THE B. G. P. AT THE GOVERNMENT press, THIRUVANANTHAPURAM, 1998 33/1278/98/mc. 18) in the second Schedule, for serial No. 4 and the entries against it, the following shall be substituted, namely: 4 (i) Raw hides and skins a) Purchases within the State: At the point of last purchase in the State by a dealer liable to tax under S. S. b) brought from outside the State: At the point of first sale in the State by a dealer liable to tax under S. 5. ii) Dressed hides and skins : At the point of first sale in the State by a dealer liable to tax under Section 5. 19) in the Third Schedule the words "crushed metals produced otherwise than the mechanised crushing" occurring in item 33 shall be omitted. 4. Amendment of Act 19 of 1976- In the Kerala Motor vehicles Taxation Act, 1976 (19 of 1976) 1) in S. 3 to sub-s. (1) the following further proviso shall be added, namely: Provided further that in respect of a new Motor Vehicle of any of the classes specified in item Nos. 1, 2 and 11 of the Schedule to this act there shall be levied from the date of purchase of the vehicles "one time tax at the rates specified in the Annexure. at the time of first registration of the vehicle, and thereafter tax shall be levied at the time of renewal of registration of such vehicle at the rate specified in the Schedule as per the fourth proviso to sub-s. (1) of S. 4". 2) In the schedule in item 11, for sub item " (1)Motor cars" and the entries thereunder, the following shall be substituted, namely: 1) Motor Cars. a) weighing not more than 750 Kgs. unladen b) weighing more than 750 Kgs. but not more than 1500 kgs. unladen. c) weighing more than 1500 Kgs. unladen 3) after the Schedule the following Annexure shall be inserted namely: ANNEXURE One Time Tax (See Proviso to S. 3 (1)) New Motor Cycles (including Motor Scooters and Cycles with attachment for propelling the same by mechanical power) and three wheelers (including tri-cycles and Cyclerickshaws with attachment for propelling the same by mechanical power) not used for transport of goods or passengers and motor Cars. S1. No. Class of Vehicle Rate of one time tax (in rupees ) (1) (2) (3) 1. Motor cycles (including motor scooters and cycles with attachment for propelling the same by mechanical power (a) bi-cycles not exceeding 7500 1500 (b) Bi-cycles exceeding 7500 with or without side car or drawing a trailer 2000

(2.) THREE wheelers (including tri-cycles and cycle rickshaws with attachment for propelling the same by mechanical power) not used for transport of goods or passengers (a) Tri-cycles/ Cycle rickshaws 1500 (b) THREE wheelers 2000

(3.) MR. Gopalakrishna Menon submitted the following proposition: S. 3 (1) of the Act gives power to levy tax on every motor vehicle used or kept for use in the State at the rates specified for such vehicles in the Schedule. S. 3 (2) gives power to the State Government to increase the rate of tax specified in the schedule from time to time by notification in the official gazette. But the said section contains a proviso to the effect that such increase shall not in the aggregate exceed 50% of such rate. As per the amendment made to the Schedule on the last occasion the rate of tax prescribed for vehicles newly registered is the rate of tax prescribed for two years and now in order to circumvent the proviso to S. 3 (2) the State government has made amendment to S. 3 (1) as per the Kerala Finance Bill 1998 to the effect that one time tax can be levied on motor vehicles registered as a new vehicle and by virtue of the amendment if a person takes the vehicle outside the State he will have to pay tax again in the other State. Therefore, the levy of one time tax is highly arbitrary and harsh and the petitioner is put to very heavy financial loss and hardship. According to MR. Menon, the new amendment introduced traverses the scope, object and ambit of the Finance Bill and that the amendment thus brought out is not a law as understood and permitted by Art. 265 of the Constitution of India. The levy of tax is therefore, unconstitutional and ultravires.