Kerala High Court
P.V.Ali Mubarak vs The Transport Commissioner on 2 August, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
WEDNESDAY, THE 2ND DAY OF AUGUST 2023 / 11TH SRAVANA, 1945
WP(C) NO. 33235 OF 2017
PETITIONER/S:
PAULOSE K.V
AGED 74 YEARS
KODIYATTU, KARIKODE, MULANTHURUTHY, ERNAKULAM - 682 314.
BY ADVS.
SRI.K.SRIKUMAR (SR.)
SRI.P.R.AJITHKUMAR
SRI.K.MANOJ CHANDRAN
SRI.S.A.MANSOOR PATTANAM
SRI.P.V.THOMAS
RESPONDENT/S:
1 THE TRANSPORT COMMISSIONER
TRANSPORT COMMISSIONERATE, 2ND FLOOR, TRANS TOWERS,
VAZHUTHACAUD, THYCAUD P.O., THIRUVANANTHAPURAM, PIN - 695
014.
2 THE JOINT REGIONAL TRANSPORT OFFICER
MOTOR VEHICLES DEPARTMENT, TRIPUNITHURA - 682 031.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.08.2023, ALONG WITH WP(C).6910 & 21609/2019, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
WEDNESDAY, THE 2ND DAY OF AUGUST 2023 / 11TH SRAVANA, 1945
WP(C) NO. 6910 OF 2019
PETITIONER/S:
1 P.V.ALI MUBARAK
AGED 51 YEARS
DESIGNATED PARTNER OF BRIDGEWAY MOTORS LLP, PADIKUNNU,
NILAMBUR P.O., MALAPPURAM, KERALA.
2 M/S.BRIDGEWAY MOTORS LLP,
NH-17, KANNUR ROAD, WEST HILL P.O., KOZHIKODE- 673005,
REPRESENTED BY ITS CEO, SHAJI VAMADEVAN.
BY ADVS.
K.SRIKUMAR (SR.)
SRI.K.MANOJ CHANDRAN
SMT.AMMU CHARLES
RESPONDENT/S:
1 THE TRANSPORT COMMISSIONER,
TRANSPORT COMMISSIONERATE, 2ND FLOOR, TRANS TOWERS,
VAZHUTHACAUD, THYCAUD P.O., THIRUVANANTHAPURAM, PIN- 695014.
2 REGIONAL TRANSPORT OFFICER,
MOTOR VEHICLES DEPARTMENT, CIVIL STATION, KOZHIKODE- 673020.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.08.2023, ALONG WITH WP(C).33235/2017 & 21609/2019, THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
WEDNESDAY, THE 2ND DAY OF AUGUST 2023 / 11TH SRAVANA, 1945
WP(C) NO. 21609 OF 2019
PETITIONER/S:
C.C.VARGHESE,
AGED 75 YEARS
MAPPILASSERIL HOUSE, NEDUMPARA ESTATE, KAILASANADU.P.O.,
NEDUMKANDAM, IDUKKI DISTRICT-685 553
BY ADVS.
C.JOSEPH ANTONY
SHRI. JOHN MANJOORAN
RESPONDENT/S:
1 THE TRANSPORT COMMISSIONER,
TRANSPORT COMMISSIONERATE, 2ND FLOOR, TRANS TOWERS,
VAZUTHACAUD P.O., THIRUVANANTHAPURAM-695 033
2 THE JOINT REGIONAL TRANSPORT OFFICER,
MOTOR VEHICLE DEPARTMENT, UDUMPANCHOLA, IDUKKI DISTRICT-686
554
BY ADV GOVERNMENT PLEADER
OTHER PRESENT:
RESHMITA RAMACHANDRAN-GP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.08.2023, ALONG WITH WP(C).33235/2017 & 6910/2019, THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
4
JUDGMENT
[WP(C) Nos.33235/2017, 6910 & 21609 of 2019]
1. Heard Sri. K. Manoj Chandran and Sri.Joseph
Antony C., learned counsel for the petitioners and
Smt.Reshmita Ramachandran, learned Government Pleader.
2. In all these three writ petitions, the question
involved is that whether tax collected at source (for short,
"TCS") by the dealer from the purchaser on the vehicles
having purchase value of more than Rs.10 lakhs, TCS
deducted at the rate of 1%, would be included within the
definition of purchase value as defined under Section 2(e) of
the Kerala Motor Vehicles Taxation Act, 1976.
3. Petitioners had purchased motor vehicles in the
year 2017 -18, having purchase value more than Rs.10 lakhs.
The respective learned counsel for the petitioners submit
that Section 206C(1) of the Income Tax Act, 1961
(hereinafter be referred to as 'I.T.Act, 1961), mandates the
seller of a motor vehicle of the value exceeding Rs.10 lakhs
to collect tax at the rate of 1% (before the amendment in the
year 2021) from the buyer of the purchase value of the
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
vehicle. The counsels therefore submit that sub-section (1) of
Section 206C of the Income Tax Act itself postulates the tax
collected at source at the rate of 1% to be over and above the
purchase value of motor vehicle. It is therefore, submitted
that when income tax itself differentiate between the
purchase value and the TCS @ 1% collected thereon,
inclusion of the TCS at the rate of 1% in the purchase value
for the purposes of levying motor vehicles tax under the
Kerala Motor Vehicles Taxation Act, 1976 would run contrary
to the proviso to Section 206C(1) of I.T. Act.
4. The further submission of the learned counsels for
the petitioners is that the legislature itself has amended
Kerala Motor Vehicles Taxation Act, 1976 by the Finance Act,
2020 whereby a proviso has been added in Section 2(e) of the
Kerala Motor Vehicles Taxation Act, 1976 wherein it has
been specifically provided that purchase value of the motor
vehicle would not include TCS amount, the proviso added in
Section 2(e) of the Kerala Motor Vehicles Taxation Act, 1976
is only clarificatory in nature and it could not be said that
before the amendment in the year 2020 Kerala Motor
Vehicles Taxation Act, 1976 provided for inclusion of TCS in
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
the purchase value of the motor vehicle.
5. On the other hand, Smt. Reshmita Ramachandran,
the learned Government Pleader has contended that the
amendment has come only with effect from 1st April, 2020
and, therefore, the proviso would have the prospective effect
and not the retrospective effect in respect of the vehicles
which had been purchased before 01.04.2020 having value of
more than Rs.10 lakhs. She submits that the Transport
Authority was justified in including the TCS amount in the
purchase value of the vehicles purchased by the petitioners.
6. I have considered the submissions of the counsel
representing the parties.
7. Section 206C(1F) of the I.T.Act, 1961 reads as
under:
(1F)Every person, being a seller, who receives
any amount as consideration for sale of a motor
vehicle of the value exceeding ten lakh rupees,
shall, at the time of receipt of such amount,
collect from the buyer, a sum equal to one per
cent of the sale consideration as income-tax.
8. The bare reading of sub-section (1) of Section 206C
of the I.T. Act, 1961 disclose the TCS is to be collected on the
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
purchase value. The said purchase value does not include the
TCS. It is 1% income tax, which is collected by the dealer
from the purchaser of the vehicle and the purpose of
providing the collection of TCS at 1% is to have track on the
high value transactions. At no stretch of imagination it can be
said that sub-section (1) of Section 206C of the I.T.Act
contemplates the inclusion of 1% TCS in the purchase value.
9. Section 2(e) of the Kerala Motor Vehicles Taxation
Act, 1976 defines the purchase value. Section 2(e) of the Act
reads as under:
"purchase value", means the value of the
vehicle as shown in the purchase invoice and
includes value added tax, [goods and services tax
or such other tax as may be levied by the Central
or State Government,] cess and customs/excise
duty chargeable on vehicles [or the sale amount
shown in the homologation uploaded by the
manufacturer in the Parivahan portal
administered by the Ministry of Transport and
Highways, which ever is higher.] Provided that
the discount or rebate given by the dealer to the
registered owner shall not be deducted from the
bill amount for computing the purchase value:
[Provided further that the tax collection at source
(TCS), which is a part of income tax payment,
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
specified if any, in the purchase invoice shall not
be included in the purchase value,] Provided
[also] that where the purchase value of any
vehicle including a vehicle imported from other
countries or a vehicle acquired or obtained
otherwise than by way of purchase is not
ascertainable on account of non availability of the
invoice, the purchase value shall be the value or
price of the vehicles of the same specifications
which are already registered or available with the
manufacturer or as fixed by the Customs and
Central Excise Department for the purpose of
levying customs duty and includes excise or
customs duty levied on the purchase of a motor
vehicle, as the case may be.]
10. If TCS to be included in the purchase value, as
contended by learned Government Pleader, Smt.Reshmita
Ramachandran, then the provisions of Section 2(e) would run
contrary to the sub-section (1) of Section 206C of the I.T.Act.
The Court has to give harmonious construction between the
Central Act and State enactment. The Legislature to avoid
this anomaly in the definition clause of the purchase value
under Section 2(e) of the Kerala Motor Vehicles Taxation
Act, 1976 by way of Amendment by Finance Act, 2020, added
proviso in Section 2 (e) of the Kerala Act, specifically
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
providing that TCS collected by the dealer would not include
the purchase value of the vehicle. This Court is therefore, of
the view that proviso has to be treated as clarificatory.
11. In view thereof, present writ petitions are allowed,
and the inclusion of 1% TCS on the purchase value is set
aside. The petitioners are required to pay the motor vehicle
tax on the purchase value excluding the TCS collected by the
dealer. The demand notices, Exts.P3 and P4 in
W.P.(C)No.6910/2019 and Ext.P4 in W.P.(C)No.21609/2019
are set aside. The Assessing Authority may redetermine the
tax, if it so required, in the light of the observations made
hereinabove.
Sd/-
DINESH KUMAR SINGH
JUDGE
Shg
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
APPENDIX OF WP(C) 33235/2017
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE INVOICE DATED 16.09.2017.
EXHIBIT P2 TRUE COPY OF THE CIRCULAR NO. 22/2016 DATED 08.06.2016.
EXHIBIT P3 TRUE COPY OF THE TCS CONFIRMATION LETTER 15.09.2017.
EXHIBIT P4 TRUE COPY OF THE APPLICATION FOR REGISTRATION OF THE
VEHICLE DATED 16.09.2017.
EXHIBIT P4(A) TRUE COPY OF THE RECEIPT EVIDENCING PAYMENT OF TAX
AMOUNT OF RS.2,98,635-00.
EXHIBIT P5 TRUE COPY OF THE LETTER DATED 28.09.2017.
EXHIBIT P6 TRUE COPY OF THE TEMPORARY REGISTRATION CERTIFICATE
DATED 16.09.2017.
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
APPENDIX OF WP(C) 6910/2019
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE INVOICE NO.BW011718RIN00114
DATED 25.07.2017.
EXHIBIT P1(a) TRUE COPY OF THE INVOICE NO.BW011718RIN00413
DATED 16.02.2018.
EXHIBIT P2 TRUE COPY OF THE TAX RECEIPT DATED 15.10.2018 FOR
AN AMOUNT OF RS.13,32,993/-
EXHIBIT P2(a) TRUE COPY OF THE TAX RECEIPT DATED 15.10.2018 FOR
AN AMOUNT OF RS.9,37,381/-
EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 05.09.2018
DEMANDING AN AMOUNT OF RS.13,330-00.
EXHIBIT P4 TRUE COPY OF THE NOTICE DATED 05.09.2018
DEMANDING AN AMOUNT OF RS.9,374-00
EXHIBIT P5 TRUE COPY OF THE CIRCULAR NO.22/2016 DATED
08.06.2018.
EXHIBIT P6 TRUE COPY OF THE INTERIM ORDER IN WP(C)
33235/2017.
WP(C) Nos.33235/2017, 6910 & 21609 of 2019
APPENDIX OF WP(C) 21609/2019
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE INVOICE NO.VSC/17-18/579 DATED
15.03.2018
EXHIBIT P2 TRUE COPY OF THE CIRCULAR NO.22/2016 DATED 08.06.2016
EXHIBIT P3 A TRUE COPY OF THE REGISTRATION DATED 03.04.2018
EXHIBIT P4 TRUE COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT
DATED 10.07.2019
