Subordinate legislation cannot impose taxes without explicit authority from the parent statute, and the 2023 Rules do not provide such authority under the 1988 Act.

JUDGMENT

[WP(C) Nos.26396/2024, 26607/2024, 26992/2024]

These writ petitions have been filed challenging the demand and collection of tax under the provisions of the Kerala Motor Vehicle Taxation Act , 1976 (hereinafter referred to as the 1976 Act) on tourist vehicles holding a permit in terms of the provisions contained in the All India Tourist Vehicles (Permit) Rules, 2023 (hereinafter referred to as the 2023 Rules) which were brought into force in supersession of All India Tourist Vehicles (Authorisation or Permit) Rules, 2021 (hereinafter referred to as the 2021 Rules).

2. It is the case of the petitioners that upon the tourist vehicles operating in more than one State obtaining a permit under the provisions of the 2023 Rules, no further 'authorisation fee/border tax' can be collected under the provisions of the 1976 Act. According to the petitioners, the 2021 Rules provided for the collection of authorisation fees/border tax by respective State Governments for plying of tourist vehicles having an All India Permit within the respective States and the quantum of such authorisation fee/border tax was also specified in the 2021 Rules. It is stated that, on 18.04.2023, the Union of India, in exercise of the powers conferred by sub-section (14) r/w. sub-section (9) of Section 88 of the Motor Vehicles Act , 1988 (hereinafter referred to as the 1988 Act) and in supersession of the 2021 Rules brought into force the 2023 Rules doing away with the provision for collection of authorisation fee/border tax by the various States Governments from tourist vehicle operators holding a valid All India Permit. It is submitted that, through an advisory, all State Governments and Transport Commissioners of all the States and Union Territories were advised not to levy any other kind of taxes or fees from tourist vehicles holding a valid permit issued under the 2023 Rules. It is stated that some of the petitioners had earlier approached the Supreme Court of India by filing a petition invoking Article 32 of the Constitution of India which was subsequently disposed of permitting the respective petitioners to approach the High Court. It is submitted that Ext.P11 order has been issued by the Transport Commissioner (Kerala), without the authority of law, requiring the collection of tax under the provisions of the 1976 Act even in respect of vehicles holding a permit in terms of the 2023 Rules.

3. Sri. P. Deepak, the learned Senior Counsel appearing for the petitioners on the instructions of Adv. Mahesh Sankarasubban Sahasranaman contends that the demand for payment of tax under the 1976 Act in respect of vehicles holding a valid permit issued under the 2023 Rules is clearly illegal and unsustainable in law. It is submitted that Entry 57 of List II of the VIIth Schedule to the Constitution of India which permits the State to make law for the levy of taxes on vehicles is expressly subject to the provisions of Entry 35 of List III which authorises making of law relating to mechanically propelled vehicles ‘including the principles on which taxes on such vehicles had been levied’. It is submitted that the 2023 Rules is a piece of legislation traceable to Entry 35 of List III. It is submitted that by virtue of the provisions contained in Article 254 of the Constitution of India, Union legislation in respect of subjects specified in List III, whether earlier to or later to the State legislation, will prevail and the State legislation will, to the extent of inconsistency, be inoperative. He submits that the judgment of the Supreme Court inState of Assam and others v. Labanya Probha Devi ; AIR 1967 SC 1575 has considered the two entries namely Entry 57 of List II and Entry 35 of List III and has held that the Entries deal with different matters, though the subjects appear to be allied ones. It is submitted that, while Entry 57 of List II deals with taxes on vehicles, Entry 35 of List III denotes rules of guidance in the matter of taxation. It is submitted that