M. Ramachandran, J.
1. Proceedings evidenced by exhibit P3 notice issued to the petitioner, by the third respondent-Sales Tax Officer, in exercise of the powers under the Kerala Tax on Entry of Goods into Local Areas Act, 1994 (for short, 'the Entry Tax Act') are in challenge. The petitioner has been called upon to pay entry tax in respect of his car, registered as PY-01-J/9273, The said vehicle was purchased from a dealer of Pondicherry and registered there on August 26, 1997. A proposal for imposition of penalty as well has been communicated by exhibit P2, by the Intelligence Officer. The petitioner, though has responded to the notices, nevertheless seeks to set aside the said proceedings on the plea that the proposal and demand is unwarranted and not authorised by law.
2. The petitioner, so far as his contentions show, has his business at Angamali, and has office at Pondicherry, and the car is used for his business, in both places. The law does not prohibit him to use the vehicle throughout the territory of India, and since he had not registered the vehicle in the State of Kerala, within 15 months from the date of its registration in Pondicherry, the demand and levy in April, 1999 is misconceived. It is further submitted that the vehicle was not normally kept or used in the State of Kerala continuously for more than 12 months and there was no change of address also and therefore requirement for endorsing a change in registration or change of residence had never arisen. It is also pointed out that as per Section 5 of the Entry Tax Act, the second respondent-Intelligence Officer was not a notified authority. The respondents have not disclosed the materials for pursuing the present steps, and it works against principles of fair play.
3. The Government Pleader, on the other hand, submits that the original petition is premature and not therefore maintainable. According to Mr. Sojan James, the proceedings have been initiated with properly invested jurisdiction, and the petitioner is given opportunity to make submissions and partake in the hearing proposed. Though the vehicle was purchased from outside the State, and registered, shortly thereafter, it has been brought down to Kerala, and it runs in the State attracting levy of entry tax. Reference was made to Sections 40, 46, 47 and 49 of the Motor Vehicles Act and Rule 59 of the Central Motor Vehicles Rules. He assures that explanation furnished to exhibits P2 and P3 will be duly taken notice of and all relevant facts collected could be disclosed. It is, however, suggested that the petitioner's attempt is to stall the proceedings without bona fides.
4. It is urged that proviso to Section 3 of the Entry Tax Act exempts a class of owners from payment of tax. The condition is that the purchase has to be prior to a period of fifteen months or more from the date on which such vehicle is registered in the State. The petitioner contends that a registration in the State has not been there in respect of the car or even contemplated in respect thereof. The liability for tax had never arisen therefore, and the suggestion is that only the owners who were foolish enough to re-register their vehicles before the fifteen months period, courted liability for payment on themselves.
5. For facilitating easy reference, the relevant portion of the section is extracted hereinbelow :
'3. Levy of tax.--(1) Subject to the provisions of this Act, there shall be levied and collected a tax on the entry of any goods into any local area for consumption, use or sale therein. The tax shall be at such rate or rates as may be fixed by the Government, by notification on the purchase value of the goods but not exceeding the rates specified for the goods (in the respective Schedule) to the General Sales Tax Act :
Provided that no tax shall be levied and collected in respect of any motor vehicle which was registered in any Union Territory or any other State under the provisions of the Motor Vehicles Act, 1988 (Central Act 59 of 1988), prior to a period of fifteen months or more from the date on which it is registered in the State.'
The petitioner's argument, in the first blush may appear to be attractive in view of the wordings of section. The question is whether there is tax liability for persons who are similarly situated like the petitioner.
6. The Act, authorises levy and collection of tax on the entry of any motor vehicle and goods into the local area for consumption, use or sale thereof. Entry and use of the motor vehicle in the State is admitted by the petitioner, in not so many words, but according to him, being a movable item, and as Motor Vehicles Act authorises, he brings the vehicle to take it back and as matters stand, the contingency spoken to by Section 49 or Rule 59 has not arisen. The use as above, according to him, is not the use contemplated in the section, and is thoroughly insufficient to attract the tax liability, presently proposed.
7. It is difficult to concur with the view point of the petitioner. The proviso to Section 3 of the Act had been incorporated, so as not to prejudice the interest of individuals who had clear and impeccable claims of domicile outside the State. The enactment had been brought so as to prevent the evasion of tax liabilities which otherwise an ordinary resident of the State had to suffer. In spite of the clear cut provisions in the Motor Vehicles Act and Rules, evasion of tax was widely prevalent eroding the tax revenue of the State and the tendency was attempted to be curbed. The lesser sales tax rate for example prevailing at Pondicherry made the Keralites to go over there, acquire the vehicle and drive back and use it in Kerala comfortably. This affected the Revenue of the State, and the enactment had been brought to discourage the practice, as the vehicle owner was compelled to pay the tax difference when the vehicle was brought to the State.
8. So as to safeguard genuine cases a protective measure was also provided. A citizen has the right to reside anywhere in the territory of. India, and in such cases, a reasonable period of 15 months was prescribed by the Entry Tax Act as sufficient to take care of their interests by the proviso referred to above. The respondent has averred that communications addressed to the petitioner came back unserved, and this tallied with the other circumstances to show that the address shown in the registration certificate of the petitioner was unreliable. The statute requires a person to declare his permanent address at the time of purchase of motor vehicle. The petitioner's claim in exhibit P1 about his permanent address was also not in conformity with his statements in the original petition. That the registration certificate has not been changed so far, by itself cannot automatically lead to a presumption that the vehicle has not attracted tax liability. It has to satisfy the real acid test. Taxability and re-registration are two entirely different concepts, and a misuse by adopting a hyper technical contention is impermissible.
9. For understanding the scope of the provision, we may conceive a few situations. For the time being, we may ignore the issue of 'permanent residence status' of the individual. Assume that a car was purchased and registered at Pondicherry on January 1, 1998. And the vehicle was brought down to Cochin forthwith. It was ever thereafter used in Cochin, and the owner re-registered it on February 1, 1998. Especially in view of Section 18, it definitely attracts tax liability.
10. In a second case, consider that the vehicle was purchased and registered on January 1, 1998 and brought to Kerala on the following day. It is used in Kerala and was re-registered on May 1, 1999, that is, after fifteen months of its initial registration. Though the owner, theoretically can claim the benefit of the proviso to Section 3, it necessarily has to be examined as to whether an exemption will be admissible because of the use of the vehicle in the State, since as from February 1, 1998 it had been in use in Kerala. He may not be entitled to an automatic exemption, as it will be basically violating the purpose of the enactment. Of course if claim for exemption is made, enquiry and assessment has to be there. Perhaps in view of the claim, it cannot be insisted that he files a return in form 2, as required by Rule 4(2). But on adjudication, if the use is found, he may be liable for payment of tax. Penalty proceedings may also be justified, depending on the facts of the case.
11. Another case can arise in the following situation. After purchase and registration on January 1, 1998, the car is brought to Kerala on the day following and was in use in the State. The owner did not bother to re-register the vehicle or record change of address, as according to him, the vehicle is taken outside the State frequently. Presume that it was intercepted on February 1, 1999 within Kerala. The owner can dispute the liability by putting up an objection that the vehicle had come to the State casually, and no liability of entry tax is there. But for successfully urging the abovesaid contention, the proof has to be furnished by him as in the previous case. That will be the case even if it is intercepted on an earlier day, for example March 1, 1998. Notwithstanding the permanent address declared, the real address will assume much significance in the aforesaid context.
12. These positions go to indicate that the tax is on the entry of vehicle into the local area for use and the factum of re-registration has not much significance if it was in use in the State before completing 15 months of its original registration. A private vehicle has no restrictions in the matter of inter-State travel, and there may be logic in the submission that a tourist who visits the State may not be liable for levy of entry tax. But the expression use in Section 3 of the Entry Tax Act does have a definite connotation. As in the case of the petitioner here, he has his establishment at Angamali, and in connection with his business he undertakes travel by the car inside the State and occasionally outside the State. Such activities come well within the word 'use' and by such use taxability arises. It is not as if everything is free when once the vehicle completes the period of fifteen months for the purpose of assessment. As pointed out above, the liability springs from the point of entry in most cases. It may be that Rule 4(2) might be misleading to certain extent, but then also, there is no indication that tax is not payable. In the aforesaid circumstances the contention of the petitioner that he has not so far re-registered his vehicle, and has no liability of tax cannot be countenanced. The fallacy of the contention arises because of the mixing up of the issue of registration, with that of entry and use. It may be stated that de hors the registration if use is there in the local area, tax liability arises.
13. The word 'use' is given the meaning in Black's Law Dictionary (7th Edition) as following :
'The application or employment of something esp. a long continued possession and employment of a thing for the purpose for which it is adopted as distinguished from the possession and employment that is merely temporary or occasional.'
Whether there is use, i.e., animus manendi, or only bona fide casual entry could be assessed only by enquiry, with reference to records maintained in respect of the vehicle and the burden is on the assessee. If it can be substantiated that the entry to Kerala was casual, then only the claim for taxation can be successfully met.
14. When a statute is enacted and the charging section specifies the situation to be remedied, while interpreting it, the substantive provisions have to be given due weight. A proviso scoops out specified contingency and can have only a restrictive operation. The Act was intended to curb a specific mischief and this by itself merits a purposive construction, in its application, A liberal or technical approach, as suggested by the counsel for the petitioner, without giving thought to the consequences is not called for. It will end only in defeating the underlying statutory intention. The conduct of the petitioner is proximate to evasion rather than avoidance. The powers now conferred on authorised officers by Section 9A can be understood as an expression of anxiety of the State to get round the mass evasion practised.
15. The original petition is therefore dismissed. The petitioner should be afforded effective opportunity to partake in the adjudication proceedings for substantiating his stand. There will be no order as to costs.
Order on C.M.P. No. 29843 of 1999 in O.P. No. 18197 of 1999-N dismissed.