# ALL KERALA DISTRIBUTORS ASSOCIATION, KOTTAYAM UNIT, REPRESENTED BY ITS SECRETARY v. THE STATE OF KERALA & ANR

- **Citation:** [2022] 17 S.C.R. 971
- **Court:** Supreme Court of India
- **Decided:** 2022-07-27
- **Case number:** Civil Appeal No. 4502 of 2009
- **Bench:** A. M. Khanwilkar, Abhay S. Oka, C. T. Ravikumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/all-kerala-distributors-association-kottayam-unit-represented-by-its-secretary-35765
- **Pages:** 41

## Headnote

Kerala Motor Vehicles Taxation Act, 1976 - ss.4(7) , 4(8), 15
- Kerala Motor Vehicles Taxation (Amendment) Act, 2005 - Kerala
Motor Transport Worker's Welfare Fund Act, 1985 - s.8A - Motor
Vehicles Act, 1988 - Challenge to constitutional validity of ss.4(7) ,
4(8), 15, 1976 Act and s.8A , 1985 Act - Held: The 1988 Act does
not cover the field of the manner of levy of vehicle tax and collection
thereof - The same is covered by the State legislations - Considering
the scheme of the State legislations, it is incomprehensible to
countenance the argument that the two provisions (of 1988 Act on
the one hand and of 1976 Act and 1985 Act on the other) are
inconsistent in any manner whatsoever - The State enactments are
complementary and can be given effect to without any disobedience
to the Central legislations - Neither the provisions of the 1985 Act
or the 1976 Act have the effect of interdicting the permit issued
under the 1988 Act - The real intent and purpose behind these
provisions is to restate the mandate stated in the 1988 Act that the
vehicle cannot be used on road without a valid permit and payment
of vehicle tax up to date - The provisions of the 1976 Act and the
1985 Act, enacted by the State Legislature are only intended to ensure
that the vehicle owner/permit-holder does not remain in arrears of
either the welfare fund contribution or the vehicle tax both payable
under the State enactments - These provisions are in no way in
conflict with the law made by the Parliament (1988 Act) - The State
enactments do not create any new liability or obligation in relation
to the permit issued under the 1988 Act (Central legislation), but it
provides for dispensation to ensure timely collection of the welfare
fund contribution as well as vehicle tax payable by the same vehicle
owner/permit-holder - The stand taken by the writ petitioners
regarding the validity of the amended provisions being repugnant
to the law made by the Parliament is negatived.
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
Constitution of India - Tests of repugnancy - Discussed.
Kerala Motor Transport Worker's Welfare Fund Act, 1985 -
Objective of - Discussed.
Dismissing the appeals, the Court
Held : 1.1 This Act had repealed the erstwhile Motor
Vehicles Act, 1939. The Parliament has obviously enacted the
1988 Act in reference to Entry 35 in List III - Concurrent List
which concerns the mechanically propelled vehicles including the
principles on which taxes on such vehicles are to be levied.
Notably, the 1988 Act provides for procedure of Regional
Transport Authority in considering application for stage carriage
permit as predicated in Section 71 of the 1988 Act. The Authority
while considering an application for grant of a stage carriage
permit is obliged to have regard to the objects of the 1988 Act
including about the satisfactory performance of the applicant as a
stage carriage operator and payment of tax [Section 71(3)(d)(ii)].
The other relevant provision for considering the subject-matter
of this appeal is Section 81 dealing with duration and renewal of
permits. It postulates that the permit issued by the Authority
under the Act shall be effective from the date of issuance or
renewal thereof for a period of five years. The proviso to subsection (1) envisages that where the permit is countersigned
under sub-section (1) of Section 88, such countersignature shall
remain effective without renewal for such period so as to
synchronise with the validity of the primary permit. This Court is
not concerned with the effect of the proviso in the present case.
The relevant sub-section dealing with the power of the Authority
to reject an application for the renewal of a permit is sub-section
(4) of Section 81. It provides for the grounds on which the renewal
of a permit can be rejected. The same includes plying any vehicle
without payment of tax due on such vehicle; and on any
unauthorised route. Besides these provisions, there is nothing
in the 1988 Act t

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 [2022] 17 S.C.R. 971
971
ALL KERALA DISTRIBUTORS ASSOCIATION, KOTTAYAM
UNIT, REPRESENTED BY ITS SECRETARY
v.
THE STATE OF KERALA & ANR.
(Civil Appeal No. 4502 of 2009)
JULY 27, 2022
[A. M. KHANWILKAR, ABHAY S. OKA AND
C. T. RAVIKUMAR, JJ.]
Kerala Motor Vehicles Taxation Act, 1976 - ss.4(7) , 4(8), 15
- Kerala Motor Vehicles Taxation (Amendment) Act, 2005 - Kerala
Motor Transport Worker's Welfare Fund Act, 1985 - s.8A - Motor
Vehicles Act, 1988 - Challenge to constitutional validity of ss.4(7) ,
4(8), 15, 1976 Act and s.8A , 1985 Act - Held: The 1988 Act does
not cover the field of the manner of levy of vehicle tax and collection
thereof - The same is covered by the State legislations - Considering
the scheme of the State legislations, it is incomprehensible to
countenance the argument that the two provisions (of 1988 Act on
the one hand and of 1976 Act and 1985 Act on the other) are
inconsistent in any manner whatsoever - The State enactments are
complementary and can be given effect to without any disobedience
to the Central legislations - Neither the provisions of the 1985 Act
or the 1976 Act have the effect of interdicting the permit issued
under the 1988 Act - The real intent and purpose behind these
provisions is to restate the mandate stated in the 1988 Act that the
vehicle cannot be used on road without a valid permit and payment
of vehicle tax up to date - The provisions of the 1976 Act and the
1985 Act, enacted by the State Legislature are only intended to ensure
that the vehicle owner/permit-holder does not remain in arrears of
either the welfare fund contribution or the vehicle tax both payable
under the State enactments - These provisions are in no way in
conflict with the law made by the Parliament (1988 Act) - The State
enactments do not create any new liability or obligation in relation
to the permit issued under the 1988 Act (Central legislation), but it
provides for dispensation to ensure timely collection of the welfare
fund contribution as well as vehicle tax payable by the same vehicle
owner/permit-holder - The stand taken by the writ petitioners
regarding the validity of the amended provisions being repugnant
to the law made by the Parliament is negatived.
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
Constitution of India - Tests of repugnancy - Discussed.
Kerala Motor Transport Worker's Welfare Fund Act, 1985 -
Objective of - Discussed.
Dismissing the appeals, the Court
Held : 1.1 This Act had repealed the erstwhile Motor
Vehicles Act, 1939. The Parliament has obviously enacted the
1988 Act in reference to Entry 35 in List III - Concurrent List
which concerns the mechanically propelled vehicles including the
principles on which taxes on such vehicles are to be levied.
Notably, the 1988 Act provides for procedure of Regional
Transport Authority in considering application for stage carriage
permit as predicated in Section 71 of the 1988 Act. The Authority
while considering an application for grant of a stage carriage
permit is obliged to have regard to the objects of the 1988 Act
including about the satisfactory performance of the applicant as a
stage carriage operator and payment of tax [Section 71(3)(d)(ii)].
The other relevant provision for considering the subject-matter
of this appeal is Section 81 dealing with duration and renewal of
permits. It postulates that the permit issued by the Authority
under the Act shall be effective from the date of issuance or
renewal thereof for a period of five years. The proviso to subsection (1) envisages that where the permit is countersigned
under sub-section (1) of Section 88, such countersignature shall
remain effective without renewal for such period so as to
synchronise with the validity of the primary permit. This Court is
not concerned with the effect of the proviso in the present case.
The relevant sub-section dealing with the power of the Authority
to reject an application for the renewal of a permit is sub-section
(4) of Section 81. It provides for the grounds on which the renewal
of a permit can be rejected. The same includes plying any vehicle
without payment of tax due on such vehicle; and on any
unauthorised route. Besides these provisions, there is nothing
in the 1988 Act to deal with the manner of levy of vehicle tax or
the collection thereof. In other words, the law made by the
Parliament does not occupy the field of manner of levy of vehicle
tax and collection thereof. If so, it is not possible to hold that
there is direct conflict between the two provisions, namely, in
the law made by the Parliament and by the State Legislature.
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Furthermore, on analysing the legislative intent and the efficacy
of the impugned provisions enacted by the State Legislature
concerning the manner of levy of vehicle tax and collection
thereof, it will be amply clear that obedience to each of the laws
(made by the Parliament and State Legislature) is possible without
disobeying the other. The Court shall elaborate on this aspect
while dealing with efficacy of the law made by the State Legislature
a little later. Suffice it to observe that the argument regarding
repugnancy is devoid of merit. [Para 34][1003-C-D; 1004-A-E;
1005-A]
1.2 As regards the 1976 Act enacted by the State
Legislature, the same is ascribable to Entries 56 and 57 of List
II - State List. Entry 56 deals with taxes on goods and passengers
carried by road or on inland waterways. Entry 57 deals with taxes
on vehicles, whether mechanically propelled or not, suitable for
use on roads, including tramcars subject to the provisions of Entry
35 of List III. In one sense, the law made by the State Legislature
is also ascribable to Entry 35 of List III under which the Parliament
has already enacted 1988 Act. However, as aforementioned, the
law made by the Parliament, being 1988 Act, does not touch upon
or deal with the field of manner of levy of vehicle tax and collection
thereof. Whereas, the 1976 Act enacted by the State Legislature
is to consolidate and amend the laws relating to the levy of tax on
motor vehicles and on passengers and goods carried by such
vehicles in the State of Kerala. The levy of tax is spelt out in
Section 3 of this Act. Section 4 deals with payment of tax and
issue of licence. The writ petitioners have challenged the
amendment made to this provision vide Act 24 of 2005 inserting
sub-sections (7) and (8) therein. By this amendment, it is provided
that every registered owner or person having possession or
control of a motor vehicle in respect of a motor transport
undertaking liable to pay contribution under the 1985 Act shall,
before effecting payment of vehicle tax under the 1976 Act,
produce before the Taxation Officer the receipt of remittance of
the contribution towards welfare fund due upto the preceding
month and failure to do so, would entail in refusal to collect the
vehicle tax under the 1976 Act. In the context of this provision,
it has been urged that such a provision is in the nature of
bootstrapping of two different liabilities. Section 8 mandates
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA
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SUPREME COURT REPORTS
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production of certificate of insurance by every registered owner
or person having possession or control of a motor vehicle. Section
9 fastens liability to pay vehicle tax by person succeeding to the
ownership, possession or control of motor vehicles. Sections 10
and 11 are of some relevance. Concededly, the validity of these
two provisions have not been assailed by the writ petitioners
and, failure to do so, may have some bearing on the view that we
propose to take. From the scheme of the 1976 Act, it is amply
clear that it is specific to levy of tax on motor vehicle and
passengers and goods carried by such vehicle in the State of
Kerala. It is not a law regulating the issuance of a permit by the
Authority under the 1988 Act as such. Indisputably, the permit
issued by the Authority is hedged with conditions including the
condition of regular payment of vehicle tax. Section 15 provides
for the consequences for nonpayment of tax consistent with
Sections 10 and 11 of the 1976 Act. Thus understood, there is no
occasion for conflict between the two provisions much less
repugnancy. [Paras 35, 36][1005-B-F; 1006-A-G, 1007-C]
1.3 As regards the argument regarding bootstrapping of
liabilities of permit-holder under two different State legislations,
it is to say the least tenuous. It is open to the Legislature to
combine levies for other purposes, such as education cess, etc.,
for collection of tax due and payable by the same tax-payer. It is
one thing to say that the person is being compelled to discharge
liability under two different State enactments, although he is not
liable under one of the two. That is not the argument of these
writ petitioners. The petitioners are not disputing their liability
under both the State Enactments. The argument, however, is that
the writ petitioners may intend to invoke remedy of appeal and
revision in respect of liability fastened under the 1985 Act. This
argument has been rightly negatived by the High Court in
paragraph 18 of the impugned judgment by observing that
sufficient safeguard has been provided under the relevant
enactment to file appeal/revision by remitting 50 per cent of the
amount demanded. The High Court issued directions in that
regard in paragraph 19 of the impugned judgment. A circular has
been issued on 16.6.2007, clarifying that the aggrieved person,
who prefers appeal on payment of 50 per cent of the contribution
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under the Welfare Fund Act, is entitled to get a certificate to that
effect and on production of that certificate before the Taxing
Authorities, the vehicle tax could be received by the Authority
without payment of the entire Welfare Fund of contributions. The
High Court has already issued directions to extend similar benefit
even in cases where review petition is filed within the prescribed
time. The fact remains that no prejudice whatsoever is caused to
the permit-holder who intends to pursue remedy under the 1985
Act against the demand received by him relating to the
contribution of the Welfare Fund. [Paras 37][1007-D-H; 1008-A]
1.4 Reverting to the 1985 Act enacted by the State
Legislature, indisputably, it is a welfare legislation constituting a
fund to promote the welfare of motor transport workers in the
State of Kerala. This Act is ascribable to Entries 23 and 24 of
List III - Concurrent List. Entry 23 deals with social security
and social insurance; employment and unemployment and Entry
24 deals with welfare of labour including conditions of work,
provident funds, employers' liability, workmen's compensation,
invalidity and old age pensions and maternity benefits. Ostensibly,
it may appear that the liability arising from the obligations under
the 1985 Act have nothing to do with the subject of vehicle tax.
However, the 1985 Act has been enacted with the objects and
reasons noted. As a vast number of employees were being
engaged in Motor Transport Industry in the State in the private
sector, the Government thought it necessary to provide for the
constitution of a Fund to promote the welfare of such of the motor
transport workers in the private sector who are not covered by
the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952 and the Payment of Gratuity Act, 1972. In other words,
this Act came into being to ameliorate the difficulties encountered
by the motor transport workers in the State of Kerala. In due
course, it came to the notice of the Government that the system
of determination and assessment of contribution from employers
and adjudication of disputes, etc., as provided for in the 1985 Act
had certain loopholes resulting in loss of welfare fund contribution.
In that, the bus operators set forth a defence by creating bogus
partnerships and showing relatives as employees to evade
payment of contribution. Another device was to keep on changing
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA
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the employees frequently. Thus, to check this mischief, an
amendment was effected to the 1985 Act vide Act 23 of 2005
including to reduce the arbitrariness in fixing the contribution.
The activities of motor transport workers are directly linked to
the use and operation of the motor transport vehicles having
permit issued under the 1988 Act in that regard. Under the said
Act, the permitholder is obliged to ensure that the vehicle tax is
paid regularly. The law clearly provides for action to be taken
against the motor transport vehicle for failure to pay vehicle tax
including to reject renewal of the permit. The stipulation in the
1985 Act is in the nature of ensuring that the vehicle owner/permitholder discharges both the liabilities and does not commit default
in contributing to the welfare fund as also pay vehicle tax on time.
Non-payment of vehicle tax may entail in stopping of motor
vehicle by the Officers of Police or Motor Vehicles Department
in exercise of power under Section 10 of the 1976 Act including
to seize and detain the same pending production of proof
remittance of tax as predicated in Section 11 of the Act.
Additionally, the vehicle owner may have to suffer penalty under
Section 16 and face prosecution under Section 17, besides the
permit being rendered ineffective if tax is not paid by virtue of
Section 15. [Para 38][1008-B-H; 1009-A-B]
1.5 Considering the scheme of the State legislations, it is
incomprehensible to countenance the argument that the two
provisions (of 1988 Act on the one hand and of 1976 Act and
1985 Act on the other) are inconsistent in any manner whatsoever.
Whereas, the State enactments are complementary and can be
given effect to without any disobedience to the Central
legislations. As aforementioned, the 1988 Act does not cover
the field of the manner of levy of vehicle tax and collection thereof.
The same is covered by the State legislations. Concededly, the
appellants have not disputed their liability to pay the vehicle tax
levied under the 1976 Act as well as to pay contribution towards
the workers' welfare fund under the 1985 Act. So understood,
the real grievance in these appeals by the motor transport vehicle
owners/permit-holders is about compelling them to pay the
welfare contribution dues as a precondition for collection of vehicle
tax. We have no hesitation in taking the view that such
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dispensation cannot be construed as unconstitutional. Further,
such a plea cannot be countenanced at the instance of someone
who otherwise concedes liability to pay both the dues towards
welfare fund contribution and vehicle tax. It is beyond
comprehension that the vehicle owner/permit-holder can be heard
to argue that he would not pay the dues under the 1985 Act and,
yet, would continue with the business of motor transport as usual
in the State of Kerala by exploiting the workers on the specious
plea that the validity of the permit to operate transport vehicle
cannot be interdicted under a State legislation. The provision in
the form of Section 15 of the 1976 Act is in the nature of restating
the consequences flowing from Sections 10 and 11 of the same
Act to stop motor vehicle and to seize and detain the same if
being used or operated without payment of vehicle tax. When
action is taken by the competent authority under Sections 10 and
11 of the Act, inevitably, the transport vehicle in question for
which permit has been taken is rendered unusable due to nonpayment of vehicle tax. The liability of the vehicle owner/permitholder to pay welfare fund contribution as well as to pay vehicle
tax arises under the legislation enacted by the State Legislature.
As such, there is nothing wrong in State Legislature making it
compulsory to pay outstanding welfare fund contribution first
before accepting the vehicle tax which had become due and
payable. In this view of the matter, it would be unnecessary to
dilate on the argument regarding validity of Section 15 of the
1976 Act because of lack of Presidential assent after coming into
effect of the 1988 Act. [Paras 39, 40][1009-C; 1010-A-G]
1.6 This Court cannot be oblivious about the legislative
intent for enacting the 1985 Act and the amendment effected
thereto in 2005. The same is a beneficial legislation with avowed
objective to ensure strict compliance of payment of welfare fund
contribution to protect the workers of the commercial operations
undertaken by the vehicle owners/permit-holders pursuant to a
permit issued under the 1988 Act, and is to reach out to such
workers who are typically unorganised and a part of informal
workforce. Neither the provisions of the 1985 Act or the 1976
Act have the effect of interdicting the permit issued under the
1988 Act. The real intent and purpose behind these provisions is
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA
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to restate the mandate stated in the 1988 Act that the vehicle
cannot be used on road without a valid permit and payment of
vehicle tax up to date. A priori, we have no hesitation in concluding
that the provisions of the 1976 Act and the 1985 Act, enacted by
the State Legislature, are only intended to ensure that the vehicle
owner/permit-holder does not remain in arrears of either the
welfare fund contribution or the vehicle tax both payable under
the State enactments. These provisions are in no way in conflict
with the law made by the Parliament (1988 Act). The State
enactments do not create any new liability or obligation in relation
to the permit issued under the 1988 Act (Central legislation),
but it provides for dispensation to ensure timely collection of the
welfare fund contribution as well as vehicle tax payable by the
same vehicle owner/permit-holder. the writ petitioners through
their counsel had fairly accepted during oral argument that after
the 2005 amendment, for all these years they have been following
the dispensation provided under the State legislations without
exception. In that sense, the challenge has become academic.
Be that as it may, we have negatived the stand taken by the writ
petitioners regarding the validity of the amended provisions being
repugnant to the law made by the Parliament. [Paras 41, 42][1010H; 1011-A-D]
Deep Chand vs. The State of Uttar Pradesh & Ors.
[1959] Suppl. 2 SCR 8 - followed.
The State of Bombay & Anr. vs. F.N. Balsara AIR 1951
SC 318 : [1951] SCR 682, M. Karunanidhi vs. Union
of India AIR 1979 SC 898 : [1979] 3 SCR 254, Hardev
Motor Transport vs. State of M.P. & Ors (2006) 8 SCC
613 : [2006] 7 Suppl. SCR 766, Zaverbhai Amaidas
vs. The State of Bombay [1995] 1 SCR 799, Ch. Tika
Ramji & Ors., etc. vs. The State of Uttar Pradesh &
Ors. [1956] SCR 393, Thirumuruga Kirupananda
Variyar Thavathiru Sundara Swamigal Medical
Educational & Charitable Trust vs. State of Tamil Nadu
& Ors. (1996) 3 SCC 15 : [1996] 2 SCR 422, Kulwant
Kaur & Ors. vs. Gurdial Singh Mann (Dead) by LRs. &
Ors. (2001) 4 SCC 262 : [2001] 2 SCR 525, Kaiser-IHind Pvt. Ltd. & Anr. vs. National Textile Corpn.
(Maharashtra North) Ltd. & Ors. (2002) 8 SCC 182:
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[2002] 2 Suppl. SCR 555, Hoechst Pharmaceuticals
Ltd. & Ors. vs. State of Bihar & Ors. (1983) 4 SCC 45
: [1983] 3 SCR 130, State of Kerala & Ors. vs. Mar
Appraem Kuri Company Limited & Anr. (2012) 7 SCC
106 : [2012] 4 SCR 448, Union of India & Ors. vs.
Mohanlal Likumal Punjabi & Ors. (2004) 3 SCC 628:
[2004] 2 SCR 468, Director of Elementary Education,
Odisha & Ors. vs. Pramod Kumar Sahoo (2019) 10 SCC
674, Association of Natural Gas & Ors. vs. Union of
India & Ors. (2004) 4 SCC 489 : [2004] 3 SCR 534,
Dharappa vs. Bijapur Coop. Milk Producers Societies
Union Ltd. (2007) 9 SCC 109 : [2007] 5 SCR 729,
Ashok Kumar alias Golu vs. Union of India & Ors.
(1991) 3 SCC 498 : [1991] 2 SCR 858, State of Tamil
Nadu & Ors. vs. K. Shyam Sunder & Ors. (2011) 8 SCC
737 : [2011] 11 SCR 1094, Ajay Hasia & Ors. vs. Khalid
Mujib Sehravardi & Ors. (1981) 1 SCC 722 : [1981] 2
SCR 79, The Collector of Customs, Madras vs. Nathella
Sampathu Chetty & Anr. AIR 1962 SC 316 : [1962]
 SCR 786, New Central Jute Mills Co. Ltd. vs. Assistant
Collector of Central Excise, Allahabad & Ors. (1970)
2 SCC 820 : [1971] 2 SCR 92 - referred to.
A.L.S.P.P.L. Subrahmanyan Chettiar vs. Muttuswami
Goundan AIR 1941 FC 47, Prafulla Kumar Mukherjee
& Ors. vs. Bank of Commerce Ltd., Khulna AIR (34)
1947 PC 60 - referred to.
Case Law Reference
[1951] SCR 682
referred to
Para 9
[1979] 3 SCR 254
referred to
Para 9
[2006] 7 Suppl. SCR 766
referred to
Para 11
[1959] Suppl. 2 SCR 8
followed
Para 32
[1995] 1 SCR 799
referred to
Para 12
[1956] SCR 393
referred to
Para 12
[1996] 2 SCR 422
referred to
Para 33
[2001] 2 SCR 525
referred to
Para 12
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA
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[2002] 2 Suppl. SCR 555
referred to
Para 13
[1983] 3 SCR 130
referred to
Para 13
[2012] 4 SCR 448
referred to
Para 13
[2004] 2 SCR 468
referred to
Para 14
[2004] 3 SCR 534
referred to
Para 17
[2007] 5 SCR 729
referred to
Para 17
[1991] 2 SCR 858
referred to
Para 18
[2011] 11 SCR 1094
referred to
Para 18
[1981] 2 SCR 79
referred to
Para 19
[1962] SCR 786
referred to
Para 27
[1971] 2 SCR 92
referred to
Para 27
CIVIL APPELLATE JURISDICTION : Civil Appeal No.4502
of 2009.
From the Judgment and Order dated 30.07.2007 of the High Court
of Kerala at Ernakulam in WP (C) No.9971 of 2006.
With
Civil Appeal Nos.878 And 879 of 2010.
K. Radhakrishnan, P.N. Ravindran, Sr. Advs., Abhisth Kumar, K.
Parameshwar, Alex Joseph, Linto K. B., Sonali S.S., Prasad Hegde, S.
Begurupriya, S. K. Bose, Ranjith K. C., Bikas Kar Gupta, Avijit
Bhattacharjee, Mrs. Debarati Sadhu, Abraham Mathews, Nishe Rajen
Shonker, Mrs. Anu K. Joy, Alim Anvar, P.S. Sudheer, Rishi Maheshwari,
Ms. Anne Mathew, Ms. Shruti Jose, Advs. for the appearing parties.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J.
1. These appeals involve challenge to the constitutional validity of
sub-sections (7) and (8) of Section 4 [introduced by way of the Kerala
Motor Vehicles Taxation (Amendment) Act, 20051 in the Kerala Motor
Vehicles Taxation Act, 19762], Section 15 of the 1976 Act and Section
8A of the Kerala Motor Transport Workers' Welfare Fund Act, 19853
inserted by Act 23 of 2005.
1 for short, "the Amendment Act"
2 for short, "the 1976 Act"
3 for short, "the 1985 Act"
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2. The thrust of the challenge is on the ground that the State
Legislature by way of stated amendments to the welfare legislation has
effectively bootstrapped the obligation to make contribution to the
workers' welfare fund with the obligation to pay tax for operating motor
vehicles. In other words, the welfare legislation is intertwined with the
compensatory legislation by the impugned Amendment Act of 2005 and
together they substantially encroach and override the relevant provisions
of the Central legislation i.e., the Motor Vehicles Act, 19884 to paralyse
the Stage and Goods Carriage Operation or to undermine the effectiveness
of the transport permit provided under the 1988 Act.
3. The 1976 Act was enacted by the State Legislature when the
erstwhile Motor Vehicles Act, 19395 was in force. It was so enacted
under Entry 56 (Taxes on goods and passengers carried by road or on
inland waterways) and Entry 57 (Taxes on vehicles, whether
mechanically propelled or not, suitable for use on roads, including
tramcars subject to the provisions of entry 35 of List III) of List II of the
Seventh Schedule to the Constitution. Section 15 of the 1976 Act
postulates that non-payment of tax due in respect of a transport vehicle
within the prescribed period would render the transport permit for such
vehicle ineffective from the date of expiry of the said period until such
time as the tax is actually paid. The State of Kerala had sought Presidential
assent for the 1976 Act and the same was granted on 25.3.1976.
However, in due course, the 1939 Act was repealed by the Parliament
and it was replaced by the 1988 Act, introducing a new regime to
consolidate and amend the law related to motor vehicles. This Act (the
1988 Act) was enacted by the Parliament under Entry 35 of List III
(Mechanically propelled vehicles including the principles on which taxes
on such vehicles are to be levied). Chapter V of the 1988 Act deals with
control of transport vehicles, including the procedure of Regional
Transport Authority in considering application for stage carriage permit
and the duration and renewal of permits. According to the appellants,
the 1988 Act exhaustively covered all aspects of grant, control and validity
of transport permits. Further, the State of Kerala did not seek Presidential
assent in respect of the State Act i.e., 1976 Act, after coming into force
of the Central Act, despite the repugnancy between the existing State
Act and the newly introduced the 1988 Act.
4 for short, "the 1988 Act" or "the Central Act", as the case may be
5 for short, "the 1939 Act"
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA [A. M. KHANWILKAR, J.]
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4. Furthermore, in the year 2005, the State of Kerala amended
the 1976 Act and the 1985 Act thereby introducing sub-sections (7) and
(8) of Section 46 in the 1976 Act and Section 8A7 in the 1985 Act. The
effect of these amendments is to mandate production of receipt of
6 4. Payment of tax and issue of license.-
(1) The Tax levied under Sub Section (1) of Section 3 shall be paid in advance
with such period and in such manner as may be prescribed, by the registered owner or
person having possession or control of the Motor Vehicle, for a quarter or year, at his
choice, upon a quarterly or annual licence to be taken out by him.
Provided that, in the case of fleet owner, the Government may direct that the
tax shall be paid in monthly instalments before such date, in such manner and subject to
such conditions, as may be specified in the direction:
Provided further that where the tax payable in respect of a motor vehicle other
than a motorcycle (including a motor scooter and cycle with attachment for propelling
the same by mechanical power) or a three wheeler as specified in items 1 and 2 of the
schedule or a motor car as specified in item 11 of the Schedule, for a year does not
exceed Rupees one thousand five hundred, the tax shall be paid yearly upon an annual
licence:
Provided also that the registered owner, or person having possession or control
of the motor vehicle may, at his /her choice, pay the yearly tax payable under the
second proviso in advance for any period upto 5 years, upon a licence for such period:
Provided also that the registered owner, or a person having possession or
control of a motor cycle (including motor scooters and cycles, with attachment for
propelling the same by mechanical power) specified in item 1 of the Schedule or three
wheelers (including tricycles and cycle rickshaws with attachment for propelling the
same by mechanical power) not used for transport of goods or passengers specified in
item 2 of the Schedule or a motor car specified in item 11 of the said Schedule shall pay
tax in respect of those vehicles in advance for a period of two years in lumpsum upon
a licence for such period.
Provided also that a registered owner or person liable to pay tax for a period of
two years in respect of motor vehicles specified in serial numbers 1 and 2 of the
schedule may at his choice pay tax in advance for any period exceeding two years at the
rates specified in the Schedule:
Provided also that the owner or a person liable to pay tax in respect of vehicles
specified in items 1,2,11 and 12 of the Schedule shall not be liable to pay any periodical
increase in tax for which he has paid tax for such vehicles.
Provided also that a registered owner or a person liable to pay tax for a period
of two years under the preceding proviso may, at his choice, pay tax in advance for a
period of five years or ten years or fifteen years in lumpsum upon a licence for such
period.
Explanation:- (1) The tax for an annual licence shall not exceed four times tax
for two years licence shall not exceed eight times, tax for 5 years' licence shall not
exceed twenty times, tax for 10 years' licence shall not exceed forty times and tax for 15
years' licence shall not exceed sixty times, the tax for a quarterly licence.
(1A) Notwithstanding anything contained in any other provision of this Act,
'year' in relation to a motor vehicle in respect of which tax has to be paid yearly upon
an annual licence in pursuance of the second proviso to sub section (1), shall mean a
period of twelve months commencing on the first day of the quarter in which the
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remittance of welfare fund contribution at the time of making payment
of vehicle tax before the Taxation Officer. In this context, it is urged that
vehicle has been or is, first registered in the State and annual tax licence in respect of
such a vehicle shall be taken accordingly:
Provided that if the tax in respect of a motor vehicle for any portion of the year
so reckoned has already been paid, the tax payable for the remaining period of that year
shall be calculated at the rate of one-twelth of the annual tax for each calendar month or
part thereof.
Provided further that in the case of a motor vehicle in respect of which tax has
to be paid yearly upon an annual licence in pursuance of the second proviso to subsection (1), the tax for the period from the 1st day of April 1985, to the commencement
of the year in relation to such a vehicle shall be paid as if the Kerala Motor Vehicles
Taxation (Amendment) Act, 1986 had not been enacted.
(2) In the case of licence for a year or more, such rebate in respect of the tax, as
may be prescribed, shall be granted.
(3) When any person pays the amount of tax in respect of a motor vehicle used
or kept for use in the State of the vehicle by the Regional Transport Officer concerned
that no tax is payable in respect of such vehicle, the Taxation Officer shall-
(a) grant to such person a licence in the prescribed form: and
(b) record that the tax has been paid for the specified period, or that no tax is
payable in respect of that vehicle, as the case may be.
Provided that no licence shall be granted in respect of a motor vehicle, which is
exempt from payment of tax under sub-section (1) of Section 5.
(4) No motor vehicle liable to tax under Section 3 shall be kept for use in the
State unless the registered owner or the person having possession or control of such
vehicle has obtained a tax licence under sub-section (3) in respect of that vehicle.
(5) No motor vehicle liable to tax under Section 3 shall be used in the State
unless a valid tax licence obtained under sub section (3) is displayed on the vehicle in
the prescribed manner.
(6) Notwithstanding anything contained in sub-section (1), no person shall be
liable to tax during any period on account of any taxable motor vehicle, the tax due in
respect of which for the same period has already been paid by some other person.
(7) Notwithstanding anything contained in any other provision of this Act,
every registered owner or person having possession or control of a motor vehicle in
respect of a motor transport undertaking liable to pay contribution under the Kerala
Motor Transport Worker's Welfare Fund Act, 1985 (21 of 1985) shall, before effecting
payment of tax produce before the Taxation Officer the receipt of remittance of the
contribution towards welfare fund due upto the preceding month.
(8.) No tax under this Act shall be collected unless the receipt of remittance of
contribution towards welfare fund mentioned in sub-section (7) is produced.
7 8A. Production of receipt of remittance of welfare fund contribution.-
Notwithstanding anything contained in any other law for the time being in force every
registered owner or person having possession or control of a motor vehicle in respect of
a motor transport undertaking liable to pay contribution (other than autorickshaws
covered under the provisions the Kerala Autorickshaw Workers' Welfare Fund Scheme,
1991) shall, at the time of making payment of the tax under the Kerala Motor Vehicles
Taxation Act, 1976 (19 of 1976) produce before the Taxation Officer the receipt of
remittance of the contribution to the fund upto the preceding month.
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA [A. M. KHANWILKAR, J.]
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the amendment of 2005 effected by the State legislation has effectively
bootstrapped the obligation to make contribution to the workers' welfare
fund with the obligation to pay tax for operating motor vehicles, which
are otherwise governed by the permit issued under the 1988 Act. In the
process, it undermined the effectiveness of the permit so issued by the
competent authority.
5. It is urged that the amendments to the 1976 Act as also to the
1985 Act, including Section 15 of the 1976 Act, are unconstitutional as
the entire field is already occupied by the Central Act of 1988, with
respect to permits to be issued for operating transport vehicles. Thus,
the provisions of the State Act(s) referred to above are repugnant to the
Central Act and that no Presidential assent had been obtained by the
State of Kerala despite the repugnancy with the Central Act. Further,
even if there is no direct conflict, the impugned provisions in the State
Act(s) are ultra vires for want of legislative competence.
6. Notably, in the writ petitions filed before the High Court of
Kerala, challenging the stated provisions in the State enactments, no
relief or declaration was sought in respect of Section 8A of the 1985
Act. Moreover, the Division Bench of the High Court in the impugned
judgment noted that the counsel for the petitioner(s) had given up the
challenge to the validity of Section 15 of the 1976 Act. Being conscious
of this indisputable position, it is urged that there can be no estoppel on
legal questions or the concessions made by the counsel on the question
of law before the High Court. That cannot come in the way of the
appellants to pursue the challenge to the impugned provisions before this
Court.
7. Be that as it may, the Division Bench of the High Court
exhaustively considered the arguments canvassed on behalf of the parties
and on thorough scrutiny thereof, it negatived the challenge vide impugned
judgment dated 30.7.2007. The High Court opined that the combined
effect of sub-sections (7) and (8) of Section 4 and Section 15 of the
1976 Act, is that if a clearance certificate is not obtained from the
Assessing Officer under the 1985 Act, the motor vehicle tax would not
be received by the Taxation Officer in connection with the permit. As a
consequence of which, the permit would be rendered ineffective,
disentitling the owner of a stage carriage from operating his vehicle
under such permit for the relevant period.
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8. The High Court further noted that the 1988 Act had been enacted
by the Parliament on subjects falling under Entry 35 of List III which,
however, did not cover the field concerningimposition and the manner of
recovery of vehicle tax. Section 81(1)8 of the 1988 Act envisages that a
permit other than a temporary permit issued under Section 879 or a special
permit issued under sub-section (8)10 of Section 88 shall be effective
from the date of issuance or renewal thereof for a period of five years.
8 81. Duration and renewal of permits.-(1) A permit other than a temporary permit
issued under section 87 or a special permit issued under sub-section (8) of section 88
shall be effective from the date of issuance or renewal thereof for a period of five years:
Provided that where the permit is countersigned under sub-section (1) of section
88, such counter-signature shall remain effective without renewal for such period so as
to synchronise with the validity of the primary permit.
.....
9 87. Temporary permits.-(1) A Regional Transport Authority and the State Transport
Authority may without following the procedure laid down in section 80, grant permits
to be effective for a limited period which shall, not in any case exceed four months, to
authorise the use of a transport vehicle temporarily-
(a) for the conveyance of passengers on special occasions such as to and from
fairs and religious gatherings, or
(b) for the purposes of a seasonal business, or
(c) to meet a particular temporary need, or
(d) pending decision on an application for the renewal of a permit,
and may attach to any such permit such condition as it may think fit:
Provided that a Regional Transport Authority or, as the case may be, State
Transport Authority may, in the case of goods carriages, under the circumstances of an
exceptional nature, and for reasons to be recorded in writing, grant a permit for a period
exceeding four months, but not exceeding one year.
(2) Notwithstanding anything contained in sub-section (1), a temporary permit may be
granted thereunder in respect of any route or area where-
(i) no permit could be issued under section 72 or section 74 or section 76 or section 79
in respect of that route or area by reason of an order of a Court or other competent
authority restraining the issue of the same, for a period not exceeding the period for
which the issue of the permit has been so restrained; or
(ii) as a result of the suspension by a Court or other competent authority of the permit
of any vehicle in respect of that route or area, there is no transport vehicle of the same
class with a valid permit in respect of that route or area, or there is no adequate number
of such vehicles in respect of that route or area, for a period not exceeding the period of
such suspension:
Provided that the number of transport vehicles in respect of which temporary
permits are so granted shall not exceed the number of vehicles in respect of which the
issue of the permits have been restrained or, as the case may be, the permit has been
suspended.
10 88. Validation of permits for use outside region in which granted.-
.....
ALL KERALA DISTRIBUTORS ASSN., KOTTAYAM UNIT, REP. BY
ITS SECY. v. THE STATE OF KERALA [A. M. KHANWILKAR, J.]
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Whereas, the State Act i.e., the 1976 Act, came to be enacted under
Entry 57 of List II of the Seventh Schedule to the Constitution, which is
solely concerned with tax on vehicles whether mechanically propelled
or not. Whilst, the 1985 Act is also a State legislation covered under
Entries 23 and 24 of List III for promoting the welfare of motor transport
workers.
9. Dealing with the challenge to the validity of the stated provisions
in the State enactments, the Division Bench of the High Court plainly
opined that there was no lack of legislative competence in the State
Legislature and that the 1976 Act as well as the 1985 Act, fall substantially
within the powers expressly conferred upon the State Legislature which
had enacted both the legislations, including the Amendment Act of 2005.
It further held that merely because the 1976 Act had also dealt with a
subject which falls under Entries 23 and 24 of List III of the Concurrent
List, it cannot be held that the provisions of the 1976 Act are bad in law.
To buttress the view taken by it, the High Court relied upon the exposition
in A.L.S.P.P.L. Subrahmanyan Chettiar vs. Muttuswami Goundan11;
Prafulla Kumar Mukherjee & Ors. vs. Bank of Commerce Ltd.,
Khulna12; TheState of Bombay & Anr. vs. F.N. Balsara13; and M.
Karunanidhi vs.