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2025 Supreme(Online)(Ker) 16668
IN THE HIGH COURT OF KERALA AT ERNAKULAM
D. K. SINGH, J
MUHAMMAD RIYAS A – Appellant
Versus
UNION OF INDIA – Respondent
WP(C) 421/2024
GEORGE VARGHESE(PERUMPALLIKUTTIYIL), MANU SRINATH, NIMESH THOMAS, LIJO JOHN THAMPY, SAURAV VINOD
The Central Government can prescribe principles for vehicle taxation, but not the rates, which are exclusively within State jurisdiction.
Headnote:(A) Motor Vehicles Act, 1988 - Section 47 - Central Motor Vehicle (Twentieth Amendment) Rules 2021 and 2022 - Registration of vehicles under Bharat Series (BH series) - Petitioners, Central Government employees, sought registration of vehicles under BH series, which was denied by State authorities citing legislative competence issues - Court held that the Central Government has the authority to prescribe principles for vehicle registration and tax, but not the rates - Petitioners eligible for BH series registration, taxes to be charged as per Kerala Motor Vehicle Taxation Act, 1976. (Paras 2, 3, 6, 16, 17)
(B) Legislative Competence - Distribution of powers between Centre and State - Parliament can legislate on principles of taxation under Entry 35 of List III, but States retain exclusive power to levy taxes under Entry 57 of List II - Central rules prescribing tax rates are unenforceable. (Paras 10, 12, 15)
Facts of the case:
Petitioners, Central Government employees, challenged the refusal of State authorities to register their vehicles under BH series, arguing that the MV Act allows for such registration and that the Central Government has the authority to set principles for taxation.
Findings of Court:
Petitioners are eligible for BH series registration; the State must charge taxes according to its own legislation while adhering to the principles set by the Central Government.
Issues: Whether the Central Government can prescribe tax rates for vehicles registered under BH series and the legislative competence of the Centre versus the State regarding vehicle registration and taxation.
Ratio Decidendi: The court ruled that while the Central Government can set principles for taxation, it cannot dictate tax rates, which remain under State jurisdiction.
Result: The writ petitions stand allowed with directions for registration under BH series and tax assessment as per State law.
JUDGMENT
“C.R.”
[WP(C) Nos.7972/2024, 421/2024, 5010/2022, 12832/2022, 15698/2022, 15705/2022, 15891/2022, 17965/2022, 20644/2022, 24215/2021, 32249/2022, 32375/2022, 34988/2022, 35048/2022, 3187/2024, 35879/2022, 16833/2024]
Heard Mr George Varghese, Mr Jaykar K S, Mr Satyendra Kumar Jha (party-in-person), Mr S Muhammed Haneeff, Mr K Shaj, Mr Peeyus A Kottam, Mr K J Manu Raj, Mr Thomas T Varghese, Ms Ambily Premkumar, and Mr T R Vishnu learned Counsel for the petitioners; Ms T S Krishna learned DSG and Mr Muhammed Rafiq learned Special Government Pleader (Taxes).
Facts
2. The petitioners in these writ petitions are the Central Government employees and employees of the Central Government Undertakings, including the Banks. The petitioners are aggrieved by the non-registration of their new vehicles under the Bharat Series (BH series) in the State of Kerala by the Transport Authorities. Therefore, the petitioners have filed these writ petitions seeking a writ of mandamus directing the respondent State Authorities to register their vehicles under the BH Series.
3. The Central Government has taken a host of citizen-centric steps to facilitate mobility, including the introduction of a new registration mark for new vehicles, i.e., “Bharat Series (BH-series)”, to facilitate seamless transfer of vehicles. An IT-based solution for vehicle registration has been evolved to achieve the said purpose. However, to overcome the difficulty in the vehicles’ re-registration process while moving to another State, the vehicle owner is required to undergo some cumbersome process. Station relocation occurs with both Government and private sector employees. Such movements require a transfer of registration of their vehicles from the parent State to another State under Section 47 of the Motor Vehicles Act 1988 (for short, ‘MV Act’). Under of the MV Act, a person is allowed to keep the vehicle for not more than 12 months in any State other than the State (parent State) where the vehicle is registered, but a new registration with the new State’s registering authority has to be made within the stipulated time of 12 months.
3.1 For the fresh/new registration in another State on the employee’s movement, several steps are required, such as a No- Objection Certificate from the parent State for assignment of a new registration mark in another State, assignment of the new registration mark after the road tax on a pro-rata basis is paid in the new State, and application for refund of the road tax in the parent State on a pro-rata basis. The provision to get a refund from the parent State on a pro-rata basis is a very cumbersome process and varies from one State to another.
3.2 In order to facilitate seamless vehicle transfers, the Ministry of Road Transport and Highways (MoRTH), vide notification dated 26.08.2021, introduced a new registration mark for new vehicles, “Bharath Series (BH-series).” The vehicle bearing this registration mark shall not require the assignment of a new registration mark when the owner shifts from one State to another. This vehicle registration facility under the BH-series is available on a voluntary basis to Defense personnel, employees of the Central Government/ State Government/ Central or State Public Sector Undertakings and private sector companies/ organizations which have their offices in four or more State/Union territories. The motor vehicle tax will be levied for two years or in multiples of two. This Scheme is to facilitate the free movement of personal vehicles across States/UTs of India upon relocation to a new State/Union Territory. After completion of the fourteenth year, the motor vehicle tax shall be levied annually, which shall be half of the amount which was charged earlier for that vehicle as per notification No. GSR 594(E) 26.08.2021 - BH series registration mark Rules (MoRTH).
4. The Central Government, in the exercise of the powers conferred by clause (a), clause (d) and clause (p) of Section 64 of the MV Act, framed
