Vakiyath Koya Vs State of Kerala (Kerala High Court)
Facts- These writ petitions are preferred by owners of stage carriages as well as contract carriages, claiming the benefit of exemption from payment of tax for the period affected by the restrictions and regulations imposed due to Covid-19 pandemic.
Petitioners are seeking a writ of mandamus to the State Government to exempt stage carriage operators from payment of tax under the Act for certain periods.
Conclusion- In the decision in Mani Subrat Jain and Others v. State of Haryana and Others [(1977) 1 SCC 486], it was observed that to obtain a writ of mandamus, the petitioner must show that he has a legal and judicially enforceable right to the performance of a legal duty as distinguished from a discretion. Similarly, it was held in the decision in State of Bihar and Others v. Amrendra Kumar Mishra [(2006) 12 SCC 561], that a writ of mandamus cannot be issued on the basis of mere sympathy.
In view of the above, a writ of mandamus cannot be issued to the Government to grant tax exemption for the stage carriages or contract carriages as sought for by the petitioners.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The pestilence in the form of Covid-19 has created situations and consequences that are unprecedented. Apart from the health of individuals, every establishment including the Government, has been affected financially and otherwise. Manufacture, consumption and transportation had come to a halt or dwindled, creating ripples in the State economy. Measures introduced as part of national and statewide lockdowns affected the movement of people and goods. Public transportation had to be curtailed and regulated to prevent the spread of the virus. While the Government-run/supported, public transportation could withstand, to a large measure, the perils of the pandemic, the privately run public transportation system could not bear the economic brunt of the circumstances. The present batch of writ petitions brings to the fore, the woes of a certain category of owners of motor vehicles which cater to public transportation.
2. These writ petitions are preferred by owners of stage carriages as well as contract carriages, claiming the benefit of exemption from payment of tax for the period affected by the restrictions and regulations imposed due to Covid-19 pandemic. W.P.(C) No.2881 of 2022 is treated as the leading case and the facts in the said writ petition alone are narrated for the sake of brevity.
3. P.(C) No.2881 of 2022 is filed by owners of registered stage carriages who allege that due to the restrictions imposed on public transportation, petitioners were not allowed to operate their stage carriages during various periods. Apart from the periods of absolute prohibition in operating the stage carriages, there were other regulations even after lock-down was lifted, like restrictions on operation of vehicles during Saturdays and Sundays, restrictions on operating during certain days through the pattern of odd and even numbers, restrictions on permitting passengers from containment zones to travel, reduction in the number of trips permitted, etc. According to the petitioners, the Justice Ramachandran Commission, which constituted the Fare Revision Committee, had submitted a report to the Government advising the grant of exemption from payment of tax, and despite the above advice, Government exempted the stage carriage operators from payment of tax only minimally, that too for limited periods. Petitioners allege that the lock-down, which caused disruption of all businesses, had a catastrophic impact on stage carriage operators, and the same ought to have been reckoned while considering the question of exemption from tax due under the Kerala Motor Vehicles Taxation Act, 1976 (for short, ‘the Act’).
4. Petitioners further contend that despite the happening of force majeure conditions and despite the Supreme Court’s direction to extend maximum economic benefits to all sectors, the Government ignored the stage carriage operators. Faced with such a dilemma, petitioners submitted representations requesting exemption from payment of tax. However, Government failed to heed their requests and the benefit of tax exemption was declined to the petitioners for the period from 01.07.2021 till 31.03.2022. In the above circumstances, the petitioners have filed the writ petition seeking a direction to the first respondent to exempt private stage carriage operators from payment of tax for the period 01.07.2021 till 31.03.2022 by considering their request and also sought a direction to the first respondent to issue orders on Ext.P3 and Ext.P4 requests for considering the recommendations made by the Fare Revision Committee, a copy of which is produced as Ext.P2.
5. Though the State has not chosen to file a counter affidavit, the second respondent has filed a statement contending that several representations and requests were received by the Government including the advice/recommendation of the Fare Revision Committee, for granting exemption from tax for the stage carriages/contract carriages. The respondents stated that the ‘use of a vehicle’ is not the only criteria for imposing a tax on motor vehicles and that the incidence of tax under the Act falls even on a vehicle that is ‘kept ready for use’ and in case the owner of the vehicle does not intend to use the same, he is at liberty to file a G-Form with the concerned authority and seek exemption from payment of tax. According to the second respondent, the provision for levy of tax was carefully drafted, and if there was no intention to use the road, statutory benefits could have been claimed by intimating the authority concerned in the prescribed form. It was pointed out that the liability to pay tax falls on the owner or the person in possession of the motor vehicle and that the tax payable is to be paid in advance. It was further pleaded that stage carriages are specified in category 2(2) of the Act, which stipulated payment of tax in advance for every quarter and the tax had to be paid within 45 days of the commencement of the quarter. The respondents averred that every financial year is divided into four quarters comprising April to June, July to September, October to December and January to March of the succeeding year. According to the respondents, though Rules prescribed time-lines for payment of tax, the Government had given anxious consideration to the demands of the stage carriage operators and extended several benefits. The pleadings also referred to various exemptions granted which included full exemption and partial exemptions. On the aforesaid basis, the second respondent questioned the report of the Fare Revision Committee pleading that the said Committee was concerned only with the fare revision and not otherwise. It was also pleaded that the State Government had granted all possible benefits to stage carriage/contract carriage operators in the matter of payment of tax and that in the event of any grievance regarding the imposition of tax, the matter ought to have been taken up before the Appellate Authority.
6. A reply affidavit was filed by the first petitioner pointing out that the State Government had set apart about 1000 crores to meet the loss of Kerala State Road Transport Corporation and that while the Government is supporting the said Corporation, no such benefits are conferred upon private stage carriage operators, whose numbers in the State were 34000 in 2016, but declined to 12000 within five years. After asserting that the industry was facing acute difficulty and economic hardships, petitioners pleaded to allow the writ petitions.
7. I have heard the arguments of Sri. K.V. Gopinathan Nair, Sri. G. Hariharan, Sri. O.D. Sivadas, and Sri. I. Dinesh Menon, learned counsel for the petitioners as well as Dr. Thushara James, learned Senior Government Pleader on behalf of the respondents. I also heard Sri. Stalin P. Davis on behalf of the impleading respondents who supported the cause of the writ petitioners.
8. On a consideration of the rival contentions, it can be appreciated that the issue to be considered is whether this Court should direct the Government to grant exemption to the petitioners from the motor vehicle tax payable on stage carriages/contract carriages, due to the restrictions and regulations brought in on account of Covid-19 pandemic.
9. Though unprecedented situations warrant extraordinary actions, in the matter of taxation, certain fundamental canons of tax jurisprudence come to the forefront, which cannot be ignored. As is often noted, there is no equity in tax, and the court must go strictly by the letter of law, while interpreting a taxing statute. If the aforesaid principle is borne in mind, the issue that arises for consideration can be resolved effectively without much toil.
10. The Kerala Motor Vehicles Taxation Act, 1976 is an Act providing for the levy of tax on motor vehicles and on passengers and goods carried by such vehicles. The incidence of tax under section 3 of the Act falls on every motor vehicle used or kept for use in the State. Section 3, to the extent relevant, reads as below:
“S.3. Levy of Tax.- (1) Subject to the other provisions of this Act, on and from the date of commencement of this Act, a tax shall be levied on every motor vehicle used or kept for use in the State, at the rate specified for such vehicle in the Schedule:
xxx xxx xxx xxx
xxx xxx xxx xxx
(2) xxx
(3)The registered owner of, or any person having possession or control of a motor vehicle shall, for the purposes of this Act, be deemed to use or keep such vehicle for use in the State, except during any period for which no tax is payable on such motor vehicle under sub-section (1) of section 5.”
11. It is thus explicit from a reading of the above-extracted provision that the burden of tax under the Act is not necessarily on the use of the vehicle on the roads, but the liability falls, even on vehicles kept ready for use on roads. No manner of interpretation is required to come to the conclusion that even if a vehicle is not actually used on the roads, the tax liability will be incurred, the moment it is kept ready for use on roads. When it comes to stage carriages and contract carriages, the liability to pay tax is divided into separate periods of a year, identified as ‘a quarter’. Each stage carriage/contract carriage is bound to pay the tax due on the motor vehicle in instalments. The benefit of quarterly payment or instalment payment is granted not due to an absence of liability but only by a measure of deferment of the dates of payment. The liability to pay tax accrues when the vehicle is kept ready for use on a road, but the collection of tax is deferred, giving the benefit of instalment payments. Therefore, by virtue of reference to section 3 of the Act, petitioners cannot claim any benefit for non-payment of tax merely on the ground of restrictions and regulations imposed due to Covid-19 pandemic.
12. However, section 5 of the Act provides for exemption from tax, and the provision reads as follows:
“S.5. Exemption From Tax. (1) In the case of a motor vehicle which is not intended to be used or kept for use during any calendar month of a quarter or two successive calendar months of a quarter, or the whole of a quarter or a year beginning with the 1st day of a quarter, as the case may be, the Registered Owner or the person having possession or control of such vehicle shall give previous intimation in such form, manner and fee, as may be prescribed, in this behalf, to the Regional Transport Officer or the Joint Regional Transport Officer concerned under whose jurisdiction the vehicle is registered or endorsement of tax has been obtained, that such vehicle will not be used for such period and thereupon, the Registered Owner or the person having possession or control of the vehicle shall not be deemed to have used or kept for use the vehicle for such period, and no tax shall be payable in respect of such vehicles for such period.
(2) Notwithstanding anything contained in sub-section(1), twice the amount of tax shall be levied from the Registered Owner or the person having possession or control of the vehicle if on verification it is found that the vehicle has been used during any such period of non-use without remitting tax.
(3) Notwithstanding anything contained in sub-section (1), in an appeal under section 23 or a revision under section 24, the burden of proving that a motor vehicle has not been used during any period shall be on the registered owner or the person having possession or control of the motor vehicle, as the case may be.”
13. The mandate of section 5 of the Act is that if previous intimation is given about the non-use of the vehicle for a minimum of one month in a quarter, it shall be deemed that the vehicle is not used or kept ready for use in the State. Thus, statute contemplates situations where the tax liability can be excluded in respect of each quarter of a year. None of the petitioners claimed the benefit of section 5 of the Act for the periods in question.
14. Further, the statute through section 22 of the Act confers power upon the Government in public interest to make an exemption or reduction in the rate of tax or other modifications either prospectively or retrospectively in regard to the tax payable under the Act by any person or class of persons or in respect of any motor vehicle or class of motor vehicles etc. The statutory provision is extracted as below:
“S.22. Exemption from or reduction of tax.– The Government may, if they are satisfied that it is necessary in the public interest so to do, by notification in the Gazette make an exemption or reduction in the rate or other modification either prospectively or retrospectively; in regard to the tax payable under this Act or under the Kerala Motor Vehicles Taxation Act, 1963 (24 of 1963) or the Kerala Motor Vehicles (Taxation of Passengers and Goods) Act, 1963 (25 of 1963) (i) by any person or class of persons; or (ii) in respect of any motor vehicle or class of motor vehicles; or (iii) in respect of any motor vehicle or class of motor vehicles using a specified route, subject to such terms and conditions as they may deem fit.”
15. The Statute thus vests the power upon the Government to exempt the tax payable by any person or motor vehicle or even motor vehicles using a specified route. In exercise of the powers under section 22 of the Act, the Government had granted the benefit of exemption for different periods during the pandemic. Full exemption from tax liability of the stage carriages and contract carriages was given for the period from 01.04.2020 to 30.09.2020 and again from 01.01.2021 to 30.06.2021, apart from granting a further benefit of 50% tax exemption for the period from 01.10.2020 to 31.12.2020. The benefit of tax exemption/relaxation granted under the Act for the periods during the pandemic is given in a tabular column as below:
