"No Repugnancy With Central Act" : Supreme Court Upholds Sections 4(7),4(8) & 15 Of Kerala Motor Vehicles Taxation Act, 1976

The Supreme Court upheld the constitutional validity of Sections 4(7), 4(8) and 15 of Motor Vehicles Taxation Act, 1976 and Section 8A of the Kerala Motor Transport Workers' Welfare Fund Act, 1985.

Dismissing the appeals against the Kerala High Court judgment, the bench of Justices AM Khanwilkar, Abhay S. Oka and CT Ravikumar observed that these provisions are in no way in conflict with the Motor Vehicles Act, 1988.

"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 bench observed.

The impugned provisions under 1976 Act provides that (1) 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. (2) 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.

The appellants before the Apex Court /writ petitioners before the High Court contended that the State Legislature by way of amendments to the welfare legislation [1985 Act] has effectively bootstrapped the obligation to make contribution to the workers' welfare fund with the obligation to pay tax for operating motor vehicles. It was further contended that these provisions substantially encroach and override the relevant provisions of the Central legislation i.e., the Motor Vehicles Act, 1988 to paralyse the Stage and Goods Carriage Operation or to undermine the effectiveness of the transport permit provided under the 1988 Act.

The bench noted that the 1976 Act is specific to levy of tax on motor vehicle and passengers and goods carried by such vehicle in the State of Kerala and 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", the court said.

As regards the argument regarding bootstrapping of liabilities of permit-holder under two different State legislations, the bench observed:

"The liability of the vehicle owner/permit-holder 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", the court said.

While upholding the High Court judgment, the bench observed:

42. 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.

Case details

All Kerala Distributors Association vs State of Kerala | 2022 LiveLaw (SC) 639 | CA 4502 OF 2009 | 27 July 2022 | Justices AM Khanwilkar, Abhay S. Oka and CT Ravikumar

Counsel : Adv K. Parameshwar and Sr Adv K. Radhakrishnan for appellants, Sr. Adv P.N. Ravindran for the Kerala Motor Transport Workers Welfare Fund Board, Adv Abraham Mathews for State.

Headnotes

Motor Vehicles Taxation Act, 1976 ; Section 4(7), 4(8), 15 - Kerala Motor Transport Workers' Welfare Fund Act, 1985 - Section 8A - Constitutional validity upheld -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 - These provisions are in no way in conflict with Motor Vehicles Act, 1988 - 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. (Para 40)

Constitution of India, 1950 ; Article 254 - Tests of repugnancy - (1) Whether there is direct conflict between the two provisions; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject-matter replacing the Act of the State Legislature; and (3) Whether the law made by Parliament and the law made by State Legislature occupy the same fieldRepugnancy may arise between two enactments even though obedience to each of them is possible without disobeying the other if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field - referred to Deep Chand vs. The State of Uttar Pradesh (1959) Supp. 2 SCR 8 and Thirumuruga Kirupananda Variyar Thavathiru Sundara Swamigal Medical Educational & Charitable Trust vs. State of Tamil Nadu & Ors. (1996) 3 SCC 15. (Para 32-33)

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