Nippon Motor Corporation Pvt. Ltd. v. Regional Transport Officer Ernakulam, Deputy Transport Commissioner Central Zone, Transport Commissioner, State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE K.P.JYOTHINDRANATH** **FRIDAY, THE 9TH DAY OF JUNE 2017/19TH JYAISHTA, 1939** **WA.No. 978 of 2017 () IN WP(C).18413/2014** **------------------------------------------AGAINST THE ORDER/JUDGMENT IN WP(C) 18413/2014 of HIGH COURT OF KERALA DATED 18-10-2016** **APPELLANT(S)/PETITIONER:** **-----------------------** **NIPPON MOTOR CORPORATION PVT. LTD.** **KALAMASSERY, ERNAKULAM, PIN - 683 104, REPRESENTED BY M.A.M.BABU MOOPAN, CHAIRMAN AND MANAGING DIRECTOR.** **BY ADVS.SRI.VIJAYAN. K.U. SRI.K.V.VIMAL** **RESPONDENT(S)/RESPONDENTS::** **---------------------------** **1. THE REGIONAL TRANSPORT OFFICER ERNAKULAM, AT KAKKANAD, PIN - 682 030.** ## **2. DEPUTY TRANSPORT COMMISSIONER** **CENTRAL ZONE, ERNAKULAM - 682 030.** ## **3. TRANSPORT COMMISSIONER** **TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM, PIN - 695 014.** ## **4. STATE OF KERALA** **REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT, MOTOR VEHICLES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001.** **BY SENIOR GOVERNMENT PLEADER SRI. MUHAMMED RAFIQ** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09-06-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** SHG/ ## **ANTONY DOMINIC & K.P.JYOTHINDRANATH, JJ.** **- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A.No.978 of 2017** **- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 9[th] day of June, 2017** ## **JUDGMENT** ## _**Antony Dominic, J.**_ This appeal arises from the judgment of the learned Single Judge dismissing W.P.(C)No.18413/2014 filed by the appellant wherein the constitutional validity of Section 1 (2) (ii) of the Kerala Finance Act, 2014, giving retrospectivity to the amendment to Section 2 (3) of the Kerala Motor Vehicles Taxation Act, 1976 was upheld by this court. 2. We have heard the learned counsel appearing for the appellant and the learned Government Pleader appearing for the State. 3. The levy of motor vehicle tax in the State of Kerala is governed by the provisions of the Kerala Motor Vehicles Taxation Act, 1976. Section 2(e) of the Act defines 'purchase value'. Interpreting the provisions of the said Section one time tax was being levied with effect from 1.4.2007, including the tax paid on the value of the vehicles W.A.No.978 of 2017 2 as well. In the judgment of this court **Fathima Shirin v. Joint Regional Transport Officer, Kayamkulam and Others [2013 (3) KLT 945]** this court held that purchase value as defined under Section 2 (e) of the Act does not include the value added tax on the purchase value of the vehicle. 4. Immediately on the pronouncement of the judgment, the petitioner who had earlier imported a motor car from U.K. and paid Rs.56,10,600/- towards one time tax, made a request that he be refunded an amount of Rs.32,62,562/- being the excess amount collected. During the pendency of that request, in the Kerala Finance Act 2014, Section 2 (e) was amended, whereby the legislature clarified that for the purpose of determining the purchase value, value added tax, cess and customs/excise duty chargeable on vehicles would also be reckoned. In the said Act, the amendment was also given retrospective effect with effect from 1.4.2007. It was in these circumstances the writ petition was filed mainly challenging Section 1 (2) (ii) W.A.No.978 of 2017 3 of the Kerala Finance Act, 2014. By the judgment under appeal, the learned Single Jude upheld the provisions and dismissed the writ petition, following a Division Bench judgment of this court in **Nagendra Mani v. State of Kerala [2015 (4) KHC 313]** . It is in these circumstances the appeal is filed. 5. We heard the learned counsel for the appellant and the learned Government Pleader. 6. Relying on the judgments of the Hon'ble Apex Court in **Rai Ramakrishna and others v. State of Bihar [AIR 1963 SC 1667]** , **R.C. Tobacco (P) Ltd. & Anr. v. Union of India & Anr. [AIR 2005 SC 4203]** and **Vikram Cement and Another v. State of Madhya Pradesh and Ors. [(2015) 11 SCC 708]** , the learned counsel for the appellant contended that levy is unconstitutional and is offended by the various articles of the Constitution of India. Accordingly, the retrospective amendment to the Act is confiscatory in nature and is liable to be declared unconstitutional. W.A.No.978 of 2017 4 7. We have considered the submissions made. But we confess our inability to accept the contention. This is primarily for the reason that the validity of the amendment and its retrospectivity which is impugned by the appellant has already been considered and upheld by a Division Bench of this court in Nagendra Mani's case (supra). In that judgment, the Division Bench upheld the constitutional validity of the statute and the reasoning of the Division Bench, contained in paragraph 8 to 11 of the judgment reads thus: “8. In the above context, the learned counsel contended that the said amendment virtually nullified the decision in Fathima Shirin's case. Though, the appellants had not challenged the legality of the amendment retrospectively brought about to Section 2(e) of the MVT Act, in the writ petitions, the learned Single Judge elaborately considered the same and positively affirmed the legal validity of the amendment. What is the legal effect and consequential impact thereon caused by the decision in Fathima Shirin's case? The learned counsel reiterated his contention, which was rejected by the learned Single Judge, that the verdict passed by this Court in Fathima Shirin's case is a 'declaratory judgment' and thereby the benefit under the said judgment is liable to be extended to all concerned. On an analysis of the decision in Fathima Shirin's case, it is pertinent to note that none of the provisions under the MVT Act was declared ultra vires or illegal. Since the introduction of 'one-time tax' with effect from 01/04/2007, purchase value was being reckoned including various components such as excise/customs duty, W.A.No.978 of 2017 5 value added tax etc., and tax was being collected accordingly till the laying of decision, restricting the meaning of 'purchase value' by excluding those components, in Fathima Shirin's case. This previous practice shows that what was really intended by the legislature, while defining 'purchase value' under Section 2 (e) and the charging provision under Section 3 of the MVT Act, was to realise tax on total purchase price, including various components such as excise/customs duty, value added tax etc. Thus, the decision in Fathima Shirin's case caused a situation which necessitated to make a clarification, by way of amendment, specifically describing all the components constituting the purchase value with retrospective effect from the date of introduction of 'onetime tax'. We are also endorsing the views of the learned Single Judge that amendment brought about to the term 'purchase value' under Section 2(e) of the MVT Act as per the Kerala Finance Act 2014 is only 'clarificatory in nature', as nothing new was introduced or declared or declared illegal or invalid. As rightly held by the learned single Judge, there was no attempt to nullify the decision in Fathima Shirin's case and the clarification was made to make clear the intent of the legislation, which was brought into force from 01/04/2007. 9. The scope and extent of the power of legislature to amend the existing law with retrospective effect affecting or wiping out the decision rendered earlier by the court was considered by the Constitution Bench of the Apex Court in Sri. Prithvi Cotton Mills Ltd. etc. v. Broach Borough Municipality and others [(1969) 2 SCC 283 = AIR 1970 SC 192) and affirmed the wide power of legislature unambiguously. Again, relying on the above decision, the Apex Court reiterated the power of legislature to enact validating Acts in Bhuvaneshwar Singh and another v. Union of India and others [1994 (6) SCC 77]. 10. The proposition which culled out from the above decisions can be summarised as follows: If the legislature has legislative competency, they can legislate on the subject either prospectively or retrospectively and such power cannot be questioned, provided that such legislation shall not be made in violation of the provisions of the W.A.No.978 of 2017 6 Constitution. The legislature has power to validate action taken under a particular enactment by removing defect in the original statute retrospectively because of which the statute or the part of it had been declared ultra vires. The legislature can, at any time, make a valid law and make it retrospectively so as to bind the past transactions. The validation of tax, which was declared illegal by the court of law is legal and permissible if the grounds of illegality or invalidity are capable of being removed and are, in fact, removed and tax thus made legal. The legislature has power to give its own meaning and interpretation of law and also to give a new meaning binding on courts. The exercise of rendering ineffective judgments or orders of competent courts by changing the very basis by legislation is a wellknown device of validating legislation. Sometimes, the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat makes the new meaning binding upon courts. A valid and proper legislation may neutralise or render earlier decision ineffective after change of law by way of amendment. 11. In the light of the above decision, the learned single Judge is justified in rejecting the contention that the amendment to Section 2(e) of the MVT Act with retrospective effect as per the Finance Act, 2014 is intended to defeat the judgment passed in Fathima Shirin's case and thereby it is illegal and unsustainable.” 8. The judgment in Nagendra Mani's case (supra) being that of a Division Bench is binding on this court. Even if it is assumed that some other contentions which are now urged by the learned counsel were not considered by the Division Bench, that does not in any manner dilute the binding nature of the judgment in Nagendra Mani's case (supra). This is evident from the principles laid down by W.A.No.978 of 2017 7 this court in its judgment in **Mayilvahanam Marketing, Shoranur and Ors. v. Addl. Sales Tax Officer, Ottappalam and Ors. [2007 (3) KHC 360]** . In such circumstances, we do not find any merit in this appeal. Hence, the appeal is dismissed. Sd/- **ANTONY DOMINIC JUDGE** Sd/- **K.P.JYOTHINDRANATH JUDGE** //True copy// P.A. TO JUDGE shg/