Vehicles Registered As Goods Carriage Vehicles Can't Be Classified Under Different Head For Demanding One-Time Tax: Kerala High Court

The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. stated that “the department cannot alter their stand and classify the vehicles separately for the purposes of levy of one- time tax to the Kerala Motor Vehicles Taxation Act.”

In this case, the asseesee/appellant is the registered owner of four goods carriage vehicles. The vehicles were granted a registration certificate by classifying them as goods carriage vehicles and collecting tax under the Schedule to the Kerala Motor Vehicles Taxation Act, 1976, as applicable to 'goods carriage vehicles'.

The assessee was aggrieved by the demand made by the taxing authorities for payment of onetime tax in respect of the vehicles by classifying them as 'construction equipment vehicles'.

The assessee submitted that the requirement of consistency in taxation obliges the department to adopt a uniform approach in the matter of taxation, and therefore, so long as the department had accepted the classification of the vehicle as a goods carriage vehicle for the purposes of levy of motor vehicle tax under the Schedule to the Motor Vehicles Taxation Act, they could not change the classification for the purposes of levy of one-time tax.

The department submitted that the levy of one-time tax in respect of the vehicles was based on a circular issued by the Transport Commissioner, which clarifies that goods carriage vehicles, which are used as construction vehicles must pay one-time tax to the Kerala Motor Vehicles Taxation Act.

The bench agreed with the assessee that in matters of taxation, the revenue cannot take an inconsistent approach and must, as far as possible, maintain uniformity in classification for the purposes of tax.

The bench stated that it is significant that even in the Schedule to the Kerala Motor Vehicles Taxation Act, there is a separate entry that deals with construction equipment vehicles. If it had been the case of the department that the vehicles merited classification as construction equipment vehicles, then they should have demanded tax under the Schedule to the Motor Vehicles Taxation Act only as applicable to Construction Equipment Vehicles.

The department cannot alter their stand and classify the vehicles separately for the purposes of levy of one- time tax to the Kerala Motor Vehicles Taxation Act, added the bench.

In view of the above, the bench allowed the appeal.

Case Title: Managing Partner, Vee Tee Logistics v. Joint Regional Transport Officer

Case Number: WA NO. 2129 OF 2024

Citation: 2025 LiveLaw (Ker) 192

Counsel for Appellant/Assessee: K.V. Gopinathan Nair

Counsel for Respondent/Department: V.K. Shamsudheen

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