T P Trading Company Vs Transport Commissioner (Kerala State) (Kerala High Court)
In T P Trading Company v. Transport Commissioner (Kerala State), the Kerala High Court considered an intra-court appeal challenging a motor vehicle tax demand exceeding ₹15 lakh on a car registered in Puducherry but found to be used in Kerala. The appellant, engaged in the manufacture and distribution of plywood with branches across India, including Puducherry, had purchased the vehicle and obtained registration in Puducherry, relying on the registration certificate and GST compliance documents to assert permanent business presence there. A demand notice under the Kerala Motor Vehicles Taxation Act, 1976, was issued directing payment of tax, despite the appellant’s claim of no permanent use of the vehicle in Kerala. The proceedings progressed through several notices, including Ext.P6, Ext.P8 (tax demand of Rs. 15,37,660/-), and recovery notices (Ext.P10 and Ext.P11). The appellant initially challenged the proceedings in W.P(C) No.35997 of 2018, presenting the Puducherry tax invoice, Central and State GST registration, and GST returns as evidence of business operations in Puducherry. The Single Judge dismissed the writ petition on 18.03.2025, prompting the present appeal.
The principal issue on appeal was the validity of the tax demand under Ext.P8 issued by the Transport Commissioner of Kerala, focusing on whether the vehicle’s use in Kerala justified taxation. The appellant emphasized the Puducherry registration and GST compliance, including filing of returns, as evidence that the vehicle was permanently used there. However, the High Court noted that the GST returns filed were nil returns, reflecting only compliance rather than actual business activity. The Court observed that such documents could not substantiate the claim of permanent use in Puducherry, and therefore, the appellant’s request for remand for further inquiry was rejected.
