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1999 Supreme(Mad) 1169
High Court of Judicature at Madras
S. JAGADEESAN & E. PADMANABHAN
M. Krishnappan
Versus
The State of Tamil Nadu rep. by the Secretary to Government, Home (Transport) Department & Another
W.P. Nos.15139, 12296, 11815, 19240, 18953, 19120, 14176, 17859 of 1998 & 7073, and 5970 of 1999 and W.M.P. No. 18695 of 1998 & 8628 of 1999
Decided On :Decided On : 11-11-1999
For the Appearing Parties :K.M. Vijayan S.C for M/s La Law, M. Krishnappan, V.A. Sadagopan, M. Palani, Advocates, T.R. Rajagopalan S.C, Additional. Advocate General assisted by R. Thirugnanasambantham Additional. Government Pleader.
Headnote:
The levy of life tax for the new cars in the State of Tamil Nadu which are to be registered from the date of commencement of the Amending Act and in so far as it makes it compulsory the payment of life tax for the new cars, the impugned statutory provisions are illegal, ultra vires , offends Article 14 of the Constitution.
Fact of the Case:
The petitioner had purchased a new OPEL ASTRA car and when he approached the second respondent for registration of the said car, he was informed by the second respondent that pursuant to the amendment to the Motor Vehicles Taxation Act which came into effect from 26th June 1998, the petitioner has no option, but to pay except the life tax which works out to Rs. 16, 430/- for individuals and Rs. 32, 860/- for others in respect of the class of cars coming under Schedule III of the Act.
Finding of the Court:
The levy of motor vehicles tax is based on various factors such as dispensing with cumbersome methods, revenue to the Government and also to get rid of the difficulties in paying the tax by the vehicle owners. Section 4 of the Act empowers the Government to decide what mode of payment of tax is feasible to the vehicle owners. The State Legislatures have been empowered to levy different methods to levy Motor Vehicles tax. The once registered vehicles are the old vehicles which are using public road before the enactment of the amended Act. Hence, the retrospective effect of compulsory life time tax payment cannot be held as discriminatory.
Issues: Whether the provisions impugned are unconstitutional, ultra vires of the State Legislature and offend Art. 14 and Art. 19 (1) (g) of the Constitution?
Ratio Decidendi: The nature of levy of motor vehicles tax is compensatory and any levy which has no such apparent hearing and is not shown to be compensatory cannot be sustained. The levy is compensatory and any levy which has no such apparent hearing and is not shown to be compensatory cannot be sustained. The above are the tests which are to be followed while considering the validity of the Amending Act imposing life tax on new four wheelers and imposing different rates of tax depending upon the ownership of the vehicles as well as depending upon the make of the vehicle or whether it is an imported vehicle or locally made vehicle.
Final Decision: Section 4(1 -A) (a) and the III Schedule are declared as unconstitutional, violative of Art 14 & 19(1)(g) of the Constitution and they are beyond the legislative competency of the State Legislature, besides they cease to be a compensatory levy.
E. PADMANABHAN, J.
In this batch of writ petitions the petitioners have prayed for the issue of writ of declaration or any other appropriate writ or direction to declare Section 4(1-A)(a) read with Schedule 3 Part-I of the Tamil Nadu Motor Vehicles Taxation Act, 1974 as amended, as unconstitutional, violative of Article 14 of the Constitution of India and inconsistent with Scheme of Sec. 3 and 4 (1-A)(b) of the Tamil Nadu Motor Vehicles Taxation Act in so far as it imposes a compulsory demand of lifetax with differential tax structure for the petitioner in respect of new Motor Vehicles to be registered in the State of Tamil Nadu.
2. The relief prayed for in all the writ petitions are identical. In all the Writ Petitions, common contentions have been raised. Hence, these writ petitions were ordered to be consolidated.
3. Heard Mr. K.M. Vijayan, Senior Counsel, Mr. M. Krishnappan, Mr. V.A. Sadagopan, Mr. M. Palani, learned counsel appearing for the respective writ petitioners and Mr. T.R. Rajagopalan, Learned Additional Advocate General assisted by Mr. R. Thirugnanasambantham, learned Addl. Government Pleader for the respondents in all the writ petitions.
4. The main thrust of contentions in all the writ petitions being that the levy of life tax for the new cars in the State of Tamil Nadu which are to be registered from the date of commencement of the Amending Act and in so far as it makes it compulsory the payment of life tax for the new cars, the impugned statutory provisions are illegal, ultra vires , offends Article 14 of the Constitution.
I-Petitioners Case in W.P. No. 11815/98:
5. It would be sufficient to refer to the facts in one of the writ petitions. The petitioner had purchased a new OPEL ASTRA car and when he approached the second respondent for registration of the said car, he was informed by the second respondent that pursuant to the amendment to the Motor Vehicles Taxation Act which came into effect from 26th June 1998, the petitioner has no option, but to pay except the life tax which works out to Rs. 16, 430/- for individuals and Rs. 32, 860/- for others in respect of the class of cars coming under Schedule III of the Act. Hence, the petitioner is challenging the said provision by which life tax is sought to be levied and enforced even before the registration of the Motor Vehicles, namely new cars are concerned.
6. According to the petitioner, tax on motor vehicles is levied under Tamil Nadu Motor Vehicles Taxation Act. The Taxation Act falls under Entry 57 list II, Schedule VII of the Constitution. As per the scheme of the Tamil Nadu Motor Vehicles Taxation Act liability to pay tax arises under Section 3, which is the charging section even when the vehicle is used or kept for use in the State of Tamil Nadu at the rates specified for such vehicles in the first schedule or as the case may be in the second schedule. The impugned, Act amending Sec. 3 amends the last line of Section 3(1) as follows:—
“In the First Schedule, or in the Second Schedule, or in the Third Schedule as the case may be”
However, in contrast to charging section 4 relating to payment of tax particularly Section 4(1-A) (a) of the Act provides as follows:
“(1-A) Notwithstanding anything contained in sub-section. (a) in respect of Motor Vehicles in item (A) of the Second Schedule and in Part-I of the Third Schedule at the time of its registration, a life time tax shall be paid at the rates specified in item (A) of the Second Schedule or in Part-I of the Third Schedule as the case may be.”
7. According to the petitioner, if a motor vehicle is not purchased as a new vehicle and which is sought to be registered for the 2nd time in the state of Tamil Nadu, the option to pay the tax either annually or on the prorata life tax is-still available. According to the petitioner, the State Legislature had committed a grave blunder in amending Section 4(1-A)(a) of the Tamil Nadu Motor Vehicles Taxation Act by compelling the registered owners of motor vehi
