Kerala High Court
Sebastian K.A vs State Of Kerala on 8 November, 2022
WP(C) No.35014/2022 1/9
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
Tuesday, the 8th day of November 2022 / 17th Karthika, 1944
WP(C) NO. 35014 OF 2022
PETITIONERS:
1. SEBASTIAN K.A AGED 73 YEARS S/O. ANTONY, A G ROAD , KOHIMA,
NAGALAND(REGISTERED OWNER AND PERMIT HOLDER OF NL-01/B 1157, NL-OIRE
1695, NI-OIRE 1696, NL-OIRE 1920, NL-OIRE 1921, NLOIRE 1660, NL-OIRE
1661, NL-OIRE 1277, NL-OIRE 1397, PIN - 790001
2. SURENDRAN.V AGED 71 YEARS S/O. VELAYUDHAN, NEAR NST STAND, KOHIMA,
NAGALAND(REGISTERED OWNER AND PERMIT HOLDER OF NL-01 /8 1922, NL-
OIRE 1926, NL-OIRE 1 156, NL-OIRE 1398, PIN - 790001
3. LINJU SUMESH AGED 38 YEARS W/O. SUMESH , NO: 18, JAIL ROAD, KOHIMA,
NAGALAND @EGISTERED OWNER AND PERMIT HOLDER OF NL-01 /8 2171, NL-
OIRE 1 148, NL-OIRE 1 147, NL-OIRE 1633, NL-OIRE 1664), PIN - 790001
RESPONDENTS:
1. STATE OF KERALA REPRESENTED BY THE SECRETARY, TRANSPORT DEPARTMENT
(B), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
2. THE TRANSPORT COMMISSIONER TRANS TOWER, VAZHUTHACAUD, THYCAUD P.O.,
THIRUVANANTHAPURAM, PIN - 695014
3. THE SECRETARY TO THE GOVERNMENT MINISTRY OF ROAD TRANSPORT AND
HIGHWAYS, UDYOG MANDAL, MORTH, TRANSPORT BHAWAN, NEW DELHI, PIN -
110001
Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to stay the operation and all proceedings pursuant to Exhibit.P6,
so far as the petitioners' vehicles which are covered by the All India
Tourist Permits issued as per the provisions of Exhibit.P4 Rules, pending
disposal of the Writ Petition (Civil), in the interest of justice.
This petition coming on for orders upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
M/S.G.HARIKUMAR (GOPINATHAN NAIR), K.V.GOPINATHAN NAIR, ANUMOD B.NAIR &
G.CHITRA, Advocates for the petitioners, the court passed the following:
WP(C) No.35014/2022 2/9
GOPINATH P., J
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W.P(C) Nos.34572, 34708, 34803, 34817,
34923, 35014 and 35589 0f 2022
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Dated this the 8th Day of November, 2022
ORDER
These writ petitions have been filed challenging a circular dated 19-
10-2022, issued by the Transport Commissioner, Kerala, essentially
withdrawing an earlier circular dated 03-04-2021 and stating that tourist
buses which have obtained permits in terms of the All India Tourist Vehicles
(Authorisation or Permit) Rules, 2021, (hereinafter referred to as 'All India
Rules') have to pay tax in terms of the provisions contained in the Kerala
Motor Vehicles Taxation Act, notwithstanding the fact that the provisions of
the All India Rules do not contemplate or envisage the collection of tax
under the law providing for levy of tax on motor vehicles in respective
States. The jurisdiction and authority of the Transport Commissioner to
issue a circular of the nature referred to above has also been called into
question in these writ petitions.
2. Advocates G.Hariharan, G.Harikumar and P.A. Abhilash for the
petitioners in these cases, would contend that the Transport Commissioner
has absolutely no jurisdiction or authority to issue a circular of the nature
referred to above. Reference is made to the provisions contained in the All
India Rules and in particular to the definition of 'authorisation' and 'permit'
contained in Rules 2 (1) (b) and (d). It is pointed out that when a vehicle is
issued with a permit as defined in Rule 2 (1) (d), no further tax can be
WP(C) No.35014/2022 3/9
W.P(C) Nos.34572, 34708, 34803,
collected from the said vehicle under the Kerala Motor Vehicles Taxation
Act. It is also pointed out that the Rules contemplate the sharing of revenue
between the States and reference is made in this regard to Rule 6. It is also
pointed out with reference to Ext.P13 in W.P.(C)No.34708/2022 that there
has been a sharing of revenue collected for the issuance of permits by the
Central Government with the States, including the State of Kerala. It is
pointed out that in the month of September 2022, an amount of nearly
Rupees One Crore was paid to the State Government by the Central
Government as a share of the fee collected for the issuance of permits in
terms of the All India Rules. The provisions of Section 88 A of the Motor
Vehicles Act, 1988 and the provisions of Rule 86 of the Central Motor
Vehicles Rules, 1989, are referred to point out that the All India Rules are
valid and the Transport Commissioner has no jurisdiction or authority to
issue a circular contrary to the provisions contained in statutory rules issued
by the Union of India in the exercise of rule making power under the
provisions of the Motor Vehicles Act, 1988. It is also pointed out that this
Court in the judgment dated 16-09-2022 in W.P (C) 30724 of 2021, has
taken a view in favour of the petitioners in almost identical circumstances.
3. The learned Special Government Pleader Adv. Mohammed
Rafeeque and learned Senior Government Pleader Adv. Thusara James
appearing for the State of Kerala would submit that the provisions of the
Motor Vehicles Act, 1988, do not authorise the Central Government to issue
Rules in the nature of the All India Rules. It is submitted that the
WP(C) No.35014/2022 4/9
W.P(C) Nos.34572, 34708, 34803,
provisions of Section 88 of the Motor Vehicles Act, 1988, (which deal with
the validation of permits for use outside the region in which they are
granted) make it clear that the Rules made by the Central Government
cannot exempt Motor Vehicles from taxation under the State Laws, while
they could authorise the issuance of a permit for operation outside the State
from which such permit is issued. It is also submitted that the Kerala
Motor Vehicles Taxation Act is a piece of legislation that can be traced to
Entry 57 of List II of the 7th Schedule of the Constitution of India. It is
submitted that while Entry 35 of List III of the 7 th Schedule read along with
Entry 57 of List II contemplates that there could be legislation by the Union
Parliament regarding the taxation of Motor Vehicles, in the absence of such
law, the Central Government cannot prohibit the collection of tax under the
State legislation. It is submitted with reference to the judgment of the
Supreme Court in Kerala Samsthana Chethu Thozhilali Union v.
State of Kerala and others; (2006) 4 SCC 327 that every subordinate
legislation must answer not only to the plenary legislation under which it is
framed but must also answer to every other plenary legislation. It is
submitted that the provisions of the All India Rules cannot run counter to
the provisions of the Kerala Motor Vehicles Taxation Act, which is a valid
piece of legislation traceable to the legislative power of the State legislature
under Entry 57 of List II. Reference is also made to the fact that the High
Court of Madras has considered this issue in P.Tamilselvi v. The Union
of India (judgment dated 08-10-2021 in W.P.No.19203/2021). It is
WP(C) No.35014/2022 5/9
W.P(C) Nos.34572, 34708, 34803,
pointed out that the High Court of Madras has taken the view that there is
absolutely no illegality in the State demanding taxes even in respect of
vehicles issued with a permit in terms of the All India Rules.
4. The learned counsel for the petitioners, in reply, would contend
that the Madurai Bench of the Madras High Court has taken a contrary
view. Reference in this regard is made to the judgments in R. Bhavani v.
Union of India and others, (judgment dated 17-08-2021 in W.P (MD)
No.14641/2021) and also to the judgment in M/s.Hamad Transport v.
Union of India and others, (judgment dated 09-09-2021 in W.P (MD)
No.16385/2021) where the learned Judge has taken the view that on a
permit being issued under the All India Rules, a further collection of the tax
under the particular State Taxation Act is not warranted.
5. Having heard the learned counsel appearing for the petitioners
and the learned Special Government Pleader appearing for the respondents,
I am of the firm view that the petitioners are not entitled to any interim
relief. The reasons that compel me to take such a view against the
petitioners are the following: -
(1) It is clear from a reading of Entry 57 of List II of the 7 th schedule to
the Constitution of India and Entry 35 of List-III of that schedule that
subject to any legislation being made under Entry 35 of List III, the
State legislature enjoys the power to impose a tax on motor vehicles.
There is, admittedly, no law referable to Entry 35 of list-III by the
WP(C) No.35014/2022 6/9
W.P(C) Nos.34572, 34708, 34803,
Union Parliament. I cannot read the provisions of All India Rules in
isolation and without reference to the constitutional scheme of
legislation. The Constitution of India is the "grundnorm" [Kelsen -
The Pure Theory of Law]. In Govt. of A.P. and others v. P.
Laxmi Devi, (2008) 4 SCC 720 it was held:-
32. According to Kelsen, in every country there is a hierarchy
of legal norms, headed by what he calls as the 'Grundnorm'
(The Basic Norm). If a legal norm in a higher layer of this
hierarchy conflicts with a legal norm in a lower layer the
former will prevail (see Kelsen's 'The General Theory of Law
and State').
33. In India the Grundnorm is the Indian Constitution, and
the hierarchy is as follows:
(i) The Constitution of India;
(ii) Statutory law, which may be either law made by
Parliament or by the State Legislature;
(iii) Delegated legislation, which may be in the form of Rules
made under the Statute, Regulations made under the Statute,
etc.;
(iv) Purely executive orders not made under any statute.
34. If a law (norm) in a higher layer in the above hierarchy
clashes with a law in a lower layer, the former will prevail.
Hence a constitutional provision will prevail over all other
laws, whether in a statute or in delegated legislation or in an
executive order. The Constitution is the highest law of the land,
and no law which is in conflict with it can survive. Since the
law made by the legislature is in the second layer of the
hierarchy, obviously it will be invalid if it is in conflict with a
provision in the Constitution (except the Directive Principles
which, by Article 37, have been expressly made non-
enforceable)."
WP(C) No.35014/2022 7/9
W.P(C) Nos.34572, 34708, 34803,
Therefore, the provisions of the All India Rules will have to be
interpreted only in terms of legislative power, and I am convinced
that in the absence of legislation by the Union Parliament, prima
facie, the petitioners are not entitled to interim relief;
(2) The provisions of Sections 88 & 88A of the Motor Vehicles Act,
1988 clearly indicate that they do not cover the subject of taxation.
Therefore, the All India Rules appear to be ultra vires the
provisions of the Motor Vehicles Act, 1988;
(3) The rule-making power of the Central Government under the
provisions of the Motor Vehicles Act, 1988 does not extend to the
prohibition of collection of tax under State legislation. Kerala
Samsthana Chethu Thozhilali Union (supra) is the authority
for the proposition that all subordinate legislation (here the All
India Rules) must answer not only to the plenary legislation under
which they are framed (here the Motor Vehicles Act, 1988) but also
to all other plenary legislation (here the Kerala Motor Vehicles
Taxation Act);
(4) The Judgment of this Court dated 16-09-2022 in W.P (C) 30724 of
2021 was rendered in different factual circumstances. There the
impugned demand was on account of the expiry of an authorisation.
The question raised and considered was not regarding a demand for
WP(C) No.35014/2022 8/9
W.P(C) Nos.34572, 34708, 34803,
tax payment under the Kerala Motor Vehicles Taxation Act
notwithstanding the issuance of an All India authorisation/permit.
The demand impugned in that case arose on account of the alleged
expiry of the authorisation. A judgment is not to be read like a
statute and cannot be applied completely divorced from the factual
circumstances under which it was rendered;
(5) The fact that the permit fee collected in terms of the All India Rules
is being shared with the State Government is no reason to hold that
the demand for payment of tax under the Kerala Motor Vehicles
Taxation Act is bad.
For all these reasons, I refuse interim relief in these writ petitions.
The writ petitions are admitted. Learned Special Government Pleader
accepts notice for official respondents of the State of Kerala in these writ
petitions. ASGI accepts notice for official respondents of the Central
Government in these writ petitions. Post these Writ Petitions for final
hearing/disposal on 05-12-2022.
Sd/-
GOPINATH P.
JUDGE
ats
WP(C) No.35014/2022 9/9
APPENDIX OF WP(C) 35014/2022
Exhibit P4 TRUE COPY OF THE G.S.R. NO: 166E DATED 10.3.2021
Exhibit P6 TRUE COPY OF THE CIRCULAR ISSUED BY THE 2ND RESPONDENT
DATED 19.10.2022
