Case Law Details
These writ petitions concern challenge to Finance Bill, 2014 by which taxi vehicles are also imposed with an obligation to pay one time tax for fifteen years. The main contention urged by the petitioners is that there is a different rate for payment of tax as far as taxi vehicles are concerned. The taxi vehicle can be used as a taxi vehicle in terms of Rule 82(2) of the Central Motor Vehicles Rules only for a period of nine years. However, while registering the aforesaid vehicles to be used as taxi, petitioners are called upon to remit tax @15% for a period of fifteen years. This, according to the petitioners, is arbitrary and illegal taking into account the nature of use of the vehicle.
2. Counter affidavit has been filed by the Government in WP (C) No. 13972/2014, inter alia supporting the stand taken in the matter. It is submitted that the State Legislature is competent to enact the law under Entry 57 of List II of the 7th Schedule by which tax can be levied on motor vehicles plying within the State. This position of law has been upheld by the Supreme Court in Travancore Tea Company Ltd. v. State of Kerala (AIR 1980 SC 1547) and a judgement of this Court in Reena v. State of Kerala (2015 KHC 181). It is therefore submitted that being a one time tax, all vehicles are liable to pay tax for 15 years.
3. Before proceeding further, it has to be considered whether the vehicles used for private use and vehicles used for taxi can be brought under the same classification. Apparently, the vehicles used as taxi can be utilised only for a period of nine years as per Central Motor Vehicles Rules whereas vehicles which are for own use can be used initially for a period of 15 years and thereafter it is possible for the said vehicles to get re-registration It is therefore apparent that the vehicles which are being purchased or used as taxies can have a separate classification with reference to the vehicles which are purchased for own use, and is apparent from the classification in Annexure 1 itself.
4. Now coming to the principle of taxation, there is no dispute about the legislative competence of the Government to impose tax. The right of the Government to impose one time tax has been upheld by this Court in Anas v. State of Kerala (1999 (3) KLT 147). But, while calling upon the vehicles which are used as taxi to pay 15 years tax or one time tax, whether it amounts to an arbitrariness on the part of the Government or not is the question. Annexure 1 of Finance Act, 2012 relates to one time tax to be payable under Section 3(1) of the Kerala Motor Vehicles Taxation Act. Item Nos.4 to 12 read as under:-
