The Kerala High Court held that motor vehicle tax applicable to construction equipment vehicles can be levied on vehicles registered as good carriage vehicles fitted with construction equipment and used for construction purposes.
The petitioner with two vehicles approached the Kerala High Court impugning orders in and orders in respect of the demand of tax on those vehicles at the rate of 8% of the purchase value
under the Kerala Motor Vehicles Act,1976 and Rules made thereunder.
The counsel for the petitioner, Joji George Jacob, Baby Kuriakose, Raajesh S Subrahmanian and V R Rajesh submitted that the petitioner’s vehicles are registered as goods carriage vehicles and he has paid tax on those vehicles at the rates applicable to the goods carriage vehicles.
Now the demand has been raised for payment of tax at the rate prescribed for construction equipment of the vehicles.
Notably, the State legislature has enacted the Kerala Motor Vehicles Taxation Act, 1976 for levy of tax on the motor vehicles. Section 3 of the Kerala Motor Vehicles Taxation Act provides levy of tax on every motor vehicle used or kept for use in the State, at the rate specified for such vehicle.
The petitioner had approached the Court against the impugned orders and tax demand notices, directing the imposition of an 8 per cent tax on his vehicles under the Kerala Motor Vehicles Taxation Act,1976 which was the tax rate applicable on construction equipment vehicles.
The petitioner submitted that he had paid the tax applicable for goods carriage vehicles and was not liable to pay the higher tax that was prescribed for construction equipment vehicles.
On the contrary, the State representative Senior Government Pleader Thusara James alleged that the petitioner had installed a concrete mixer on the chassis of his vehicles and was using it for construction purposes.
The petitioner submitted that construction equipment vehicles were used only at construction sites and cannot ply on the road.
It was submitted that the vehicles of the petitioner were registered as goods carriage vehicles and cannot be imposed with motor vehicle tax at the rate prescribed for construction equipment vehicles.
Thushara James further submitted that it was irrelevant whether the vehicle was plying on the road or used in the construction sites.
It was argued that if the vehicle was used for construction purposes and not as a good carriage vehicle, then it has to be imposed with the tax rate applicable to construction equipment vehicles.
After considering the arguments presented, the Single Bench of Justice Dinesh Kumar Singh observed that, in accordance with clause 10(iii) of the Kerala Motor Vehicles Taxation Act’s schedule, vehicles equipped with construction machinery and exclusively employed for construction activities could be subjected to the tax applicable to construction equipment vehicles.
The Kerala High Court Single Bench highlighted that Annexure 1 of the Act outlined the tax imposition rate, set at 8 percent for construction equipment vehicles. Consequently, the writ petition was dismissed.
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