'Mentally Retarded Persons' Also Eligible For Tax Exemption For Motor Cars Purchased Since April 1, 1998: Kerala High Court

The Kerala High Court on Wednesday ruled that 'mentally retarded persons' are also entitled to tax exemption in purchase of motor cars, on par with the physically handicapped persons under the notification issued by the state government in 1998 under Section 22 of the Kerala Motor Vehicles Taxation Act, 1976. 

Justice P.V. Kunhikrishnan said when both the Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and Rights of Persons With Disabilities Act, 2016 state that the person with disability includes 'mentally retarded persons' also, their exclusion from tax exemption and restricting the benefit to the physically handicapped persons - blinds, deaf and orthopedically handicapped persons, is discriminatory and is liable to be interfered by the court.

"This Court is of the considered opinion that the exclusion of mentally retarded persons from the explanation to Ext.P3 Government Order is discriminatory and violative of Article 14 of the Constitution of India," said the bench.

It took note of the fact that a subsequent Government Order has been issued on April 26, 2022, to exempt persons with autism or cerebral palsy or multiple disabilities or mental retardation from taxation, in purchase motor cars up to the value of Rs.7 lakhs. However, the court noted further, the same is only applicable to only those purchases made on and after March 1, 2022, thus excluding the petitioner from its ambit since he had purchased the car before March 01, 2022.

Ruling that the petitioner is also entitled to tax exemption, the court said, "If any mentally retarded person has purchased a car in their name for their personal use for the period starting from 01.04.1998 (the date of Ext.P3) to 01.04.2022 (effective date of the G.O.(P).No.13/2022/TRANS dated 26.04.2022), all those persons are entitled to tax exemption and if applications are filed by them, the Government should refund the tax remitted by them".

An 18-year-old, with 75% permanent mental retardation (moderate), had approached the court through his mother, seeking refund of the tax paid by him to the government. His parents had purchased a motor car for him for his own use, and in his name, as he is stated to be fond of travel, and travelling in public transport is difficult for him due to his physical disabilities.

As per the earlier Government notification, the payment of tax is exempted to - three wheelers, invalid carriages, motor cycles and motor cars which are owned by physically handicapped persons for their own use whether driven by the handicapped persons themselves or by others for the transport of such handicapped persons subject to the production of a certificate from the medical officer not below the rank of a civil surgeon that the owner of the vehicle is a physically handicapped person who suffers from more than at 40% at least. 

The petitioner told the court that the Transport Commissioner insisted on the payment of one-time tax to the vehicle and hence, he was forced to pay Rs.40,570/-. When the petitioner tried claiming refund of the same relying on the notification, the request was rejected by the Transport Commissioner stating that mentally retarded persons are not included in the explanation mentioned as physically handicapped persons in the said notification.

The petitioner contended that the rejection of the prayer for the refund of the tax amount paid by him is blatantly discriminatory and violates the fundamental right under Article 14 of the Constitution of India. He also placed reliance on another notification that gives a deduction in motor vehicles tax in case of charitable organization exclusively used "for the conveyance of mentally retarded/physically handicapped/deaf and ... children, inmates of orphanages and old age homes," to buttress his argument that he is also entitled to tax exemption. 

The petitioner pointed out that subsequent to the notification issued under Section 22 of the Act, 1976, the Government issued an Order in which tax is exempted for the motor cars having purchase value up to Rs.7,00,000/-, which are owned by persons with autism or cerebral palsy or multiple disability or mental retardation, subject to certain conditions.

The State contended that the petitioner would not be entitled to the exemption of tax since, as per the existing definition of the term 'physically handicapped', mental retardation is not considered as a physical handicap. It was also submitted that the Transport Commissioner would also be bound by the prevailing rules and laws, and cannot overrule the same.

It was submitted that the later G.O. was issued when the Government felt that the concession granted to physically handicapped persons should be enlarged further, and hence the tax exemption was granted to other categories with effect from March 1st, 2022.

"The petitioner purchased the car before 01.03.2022 and therefore, the petitioner is not entitled to the tax exemption," argued the State

Transport Commissioner argued that the matter requires serious legislative contemplation and without amendment of the law, no relief can be granted in this case.

It was also argued that the mentally challenged persons are a distinct category from the physically challenged persons, since the latter are capable of owning criminal and civil liabilities, and the former cannot. The welfare measures initiated by the Government are widely misused, and in many instances, the vehicles registered are registered in the name of physically handicapped persons just for evading taxes and the Department is also apprehensive about the extension of such benefits, the officer submitted.

Ruling in favour of the petitioner, the court directed the authorities to refund the one time tax paid by the petitioner within a period of three months from the date of receipt of a copy of the judgment,

The court further directed that if any mentally retarded persons purchased a motor car in their name during the period from 01.04.1998 till 01.03.2022 for their own use and paid tax, they would also be entitled to refund of the tax, if an application is filed to that effect. 

The petitioner in this case was represented by Advocates Varghese Parambil, Albert Joseph, P. Chandy Joseph, and T.K. Kunjumon. Government Pleader Reshmitha R. appeared on behalf of the respondents.

Case Title: Clint Johnson v. State of Kerala & Anr. 

Citation: 2023 LiveLaw (Ker) 45

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