The Kerala High Court, has held that mere conversion of seats from push back to fixed would not be resulted in any tax deduction under the provisions of the Kerala Motor Vehicles Act, 1976.
The petitioner, in the instant case, is a contract carriage operator and the owner of a registered vehicle which is covered by a contract carriage permit. Initially the vehicle had push back seats and the petitioner used to pay a tax at the rate applicable to contract carriage fixed with push back seats. But after that he made some alterations to the vehicle such as conversion of seats from push back to fixed and requested to apply the rate of tax applicable for ordinary contract carriages fixed with push back seats of the same seating capacity.
After the inspection of the vehicle the taxation officer was allowed the alteration made by the petitioner subject to a condition that the petitioner continues to pay tax at the rate applicable for contract carriages fitted with push back seats.
Aggrieved by the order, the petitioner approached the High Court seeking a direction to the respondent to apply the rate of tax applicable to ordinary contract carriages with the same seating capacity, in lieu of the rate applicable for contract carriages fitted with push back seats of the same seating capacity.
As per section 3 of the Kerala Motor Vehicle Taxation Act, 1976, the levy of tax is to be in respect of every motor vehicle used or kept for use in the State at the rate specified for such vehicle in the schedule to the said Act.
Justice Jayasankar Nambiar noted that the amendment to the Act vide Finance Act, 2014 distinguishes an ordinary contract carriage and a contract carriage fitted with push back seats for the purpose of levy of tax.
The Court noted that “under the provisions of the Kerala Motor Vehicle Taxation Act and the schedule thereunder, the levy of tax is with regard to the seating capacity, and it is trite that the seating capacity is one that is indicated in the permit issued to the operator concerned for operating the contract carriage.”
The Court further observed that it is not in dispute that the seating capacity of the vehicle has not been altered and the alterations made are only in respect of the kind of seats, namely from push back seats to fixed seats. It was therefore, held that the alteration effected by the petitioner would necessitate a changed stand to be taken by the department, in respect of the tax payable under the Kerala Motor Vehicle Taxation Act.
The Court, therefore, ruled that there is no change in the seating capacity of the vehicle only a mere change in the type of seats will not cause any revenue loss to the petitioner on account of any reduced seating capacity. It is clear that the alteration does not result in reduction of the seating capacity and the alteration has made only in the kind of seats namely from push back to ordinary.
Hence the court has quashed to the limited extent that it directed to the petitioner to continue to pay tax at the rate applicable to contract carriages with push back seats.
Read the full text of the Judgment below.
