Full Judgment
Ramachandran Nair, J.
1. The appellants purchased premium cars, one a BMW 320and other a Toyota Fortuner on the verge of closure of thefinancial year 2011-12, but got the registration done for thevehicles on 02/04/2012 when the rate of motor vehicles taxhad gone up. The dispute raised before the learned SingleJudge was whether the tax revised from 01/04/2012 wasrightly levied and collected from the appellants for the vehiclesregistered on 02/04/2012 or whether the tax payable by themwas only the pre-revised tax applicable in the precedingfinancial year because the vehicles were purchased andtemporarily registered on 26/03/2012.The learned SingleJudge referred to the 2nd proviso to the charging Section 3(1)of the Kerala Motor Vehicles Taxation Act, 1976 (hereinafterreferred to as the Taxation Act for short) and held that thoughthe date of commencement of liability is the date of purchaseof vehicle, the incident of tax falls on first registration of thevehicle, which is not the temporary registration, but theregular registration as contemplated under the Taxation Actand hence upheld levy of tax at the revised rate applicable ason the date of registration of the vehicles, against which thesewrit appeals are filed.
2.We have heard both the counsel appearing for theappellants in the two Writ Appeals and also learnedGovernment Pleader appearing for the respondents.
3.The facts leading to the controversy are thefollowing:-
Both the appellants purchased above mentioned premium carsfrom the authorised dealers from Kochi and Kozhikoderespectively, and obtained temporary registration on the dateof purchase, namely 26/03/2012. Since both the appellantsare not residing within the jurisdiction of the RTOs wherefromthe cars are purchased they took temporary registrations,remitted one time tax at the rate applicable as on the date ofpurchase and applied for fancy numbers with the RTOs inKollamandPerinthalmannarespectivelywithinwhosejurisdiction the appellants are residing and to whom theappellants applied for permanent registration of the cars.Under the Rules, for allotment of fancy numbers allapplications filed until the last day of the week should beconsidered together and as a result of this, reopening forallotment of fancy numbers is on the first day of the followingweek. There was no contest for the fancy numbers applied forby the appellants and therefore the numbers were allotted tothe appellants on 02/04/2012. However, when registrationwas proposed to be made tax applicable as on the date ofregistration was demanded from the appellants, against which WP(C)s were filed. The learned Single Judge held that the taxpayable is at the rate applicable as on the date of registration,which is not the date on which temporary registration wasgranted under Section 43 of the Motor Vehicles Act, 1988(hereinafter referred to as the Act for short) read with Rule 94of the Kerala Motor Vehicles Rules. The appellants' specificcase is that since tax is payable from the date of purchase ofthe vehicles as provided under the 2nd proviso to Section 3(1)of the Taxation Act, they remitted the tax when temporaryregistrations were granted pending allotment of fancynumbers. However, the learned Single Judge held that firstregistration referred to in Section 3 of the Taxation Act is nottemporary registration but permanent registration granted tonew vehicle and so much so, rate of tax applicable is the rateas on the date of regular registration of the vehicle and not therate as on the date of granting temporary registration.
4. Duringhearing, learnedGovernmentPleadersubmitted that there is no provision in the Taxation Act to levytax on temporary registration which is granted only for 30days to facilitate transport of the vehicle to the place ofresidence of the purchaser for him to apply for and obtainregular registration. We find force in the contention of thelearned Government Pleader because there is no provision inSection 3 or in any other provision in the Taxation Act forcollection of tax for the short period during which temporaryregistration is granted to a new vehicle, which is only tofacilitate transport of vehicle on road to be taken to theregular residence of the purchaser to get the vehicle registeredby following the procedure prescribed under the Act and theRules.Even though Section 3(5) of the Taxation Act talksabout temporary licence and payment of tax for periods up to7 days and beyond 7 days up to 30 days, we feel the saidprovision is applied to register the vehicles brought fromoutside State for short term use within the State. As a matterof practice, every vehicle purchased by a person other thanone regularly residing within the jurisdiction of the RTOwherefrom the vehicle is purchased applies for temporaryregistration for transport to his place of residence or businessfor getting registration done within the period of validity of thetemporary registration. Tax endorsement under Taxation Actis made only after regular registration which is done only onproducing certificate of insurance for the vehicle, proof ofresidence, identity etc. of the purchaser as required under theAct and the Rules.Section 3 of the Taxation Act, whichprovides for levy of tax from motor vehicles, is as follows:-
"3. Levy of tax .- (1) Subject to the provisions ofthis Act, on and from the date of commencement ofthis Act, a tax shall be levied on every motor vehicle used or kept for use in the State, at the ratespecified for such vehicle in the Schedule:
Providedthat no such tax shall be levied on amotor vehiclekept by a dealer in, or a manufacturerof, such vehicle, for the purpose of trade and usedunder the authorisation of a trade certificategranted by the registering authority:
Provided further that in respect of a new motorvehicle of any of the classes specified in itemnumbers 1, 2, 6, 10(iii) and 11 of the Schedule tothis Act, there shall be levied from the date ofpurchase of the vehicle one-time tax at the ratespecified in Annexure I, at the time of firstregistration of the vehicle and thereafter tax shallbe levied at the time of renewal of such vehicle atthe rate specified in the Schedule as per fourthproviso to sub-section (1) of Section 4.
Provided further that in respect of new motorvehicle of any of the descriptions specified in itemNo.1(a) of the Schedule to this Act, there shall belevied from the date of purchase of the vehicle a taxin advance for a period of five years at the ratespecified in the Schedule, at the time of firstregistration of the vehicle, and thereafter tax shallbe levied at the rate specified in the Schedule inaccordance with the fourth proviso to sub-section(1) to Section 4: (emphasis supplied)
The 2nd proviso to Section 3(1) of the Taxation Act, whichprovides for levy of tax on new vehicles, clearly states thatlevy of tax on new vehicles is to be made at the time of "firstregistration" of the vehicle. Even though it is stated that fornew vehicles one time tax at the rate specified in Annexure I ofthe Schedule to the Act is payable from the date of purchase ofthe vehicle, the rate of tax applicable is as on the date of firstregistration of the vehicle, which in these two cases is02/04/2012. As already stated, there is no provision in theTaxation Act to levy tax during the period a new vehicle isgranted temporary registration.So much so, the firstregistration referred to the 2nd proviso to Section 3(1) cannotbe a temporary registration granted under Section 43 of theAct read with Rule 94 of the Kerala Motor Vehicles Rules, butcan only be the permanent registration granted under Section40 of the Act. In this case, what happened is that the date ofincrease of tax was known to the appellants and therefore theyremitted the tax in advance at the time of granting temporaryregistration, which they were not required to pay at that time.We do not think the payment of tax in advance before regularregistration is granted affects the liability for tax which has tobe considered with reference to the charging provision of theTaxation Act. In our view, the learned Single Judge rightly heldthat the rate of tax applicable is the rate in force as on thedate of granting regular registration.
Learned counsel for both the appellants submitted thatthe appellants were willing to give up their claim for fancynumbers for registration of the vehicle before 31/03/2012, sothat the payment of higher rate of tax for the vehicles could beavoided on account of delay in regular registration. However,learned Government Pleader submitted that once fancynumbers are applied for after remitting the required fees, theDepartment is bound to follow the Rules, i.e. to open tendersand if required to conduct auction, only on the first day of thefollowing week, which in this case happened to be02/04/2012.Reference is also invited to Annexure A2produced in W.A.No.838/2012, wherein it is stated that thosewho have applied for fancy numbers and waiting forregistration on the closure of the financial year could withdrawthe applications and go for registration with the ordinarynumbers allotted to them. Even though appellants have a casethat they were willing to forgo their claim for fancy numbers,we do not think we can at this distance of time cancel theallotments given to them and to order registration withretrospective date with other numbers, which would havealready been allotted to other vehicles. We therefore do notfind any scope for ordering cancellation of registrationsalready granted and to direct fresh registrations with runningnumbers retrospectively.
Consequently, these Writ Appeals fail and we dismiss thesame.