All Kerala Distributors Association, Kottayam Unit, Represented by Its Secretary vs The State of Kerala & Anr.

Held : 1.1 This Act had repealed the erstwhile Motor Vehicles Act, 1939. The Parliament has obviously enacted the 1988 Act in reference to Entry 35 in List III – Concurrent List which concerns the mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied. Notably, the 1988 Act provides for procedure of Regional Transport Authority in considering application for stage carriage permit as predicated in Section 71 of the 1988 Act. The Authority while considering an application for grant of a stage carriage permit is obliged to have regard to the objects of the 1988 Act including about the satisfactory performance of the applicant as a stage carriage operator and payment of tax [Section 71(3)(d)(ii)]. The other relevant provision for considering the subject-matter of this appeal is Section 81 dealing with duration and renewal of permits. It postulates that the permit issued by the Authority under the Act shall be effective from the date of issuance or renewal thereof for a period of five years. The proviso to subsection (1) envisages that where the permit is countersigned under sub-section (1) of Section 88, such countersignature shall remain effective without renewal for such period so as to synchronise with the validity of the primary permit. This Court is not concerned with the effect of the proviso in the present case. The relevant sub-section dealing with the power of the Authority to reject an application for the renewal of a permit is sub-section

(4) of Section 81. It provides for the grounds on which the renewal of a permit can be rejected. The same includes plying any vehicle without payment of tax due on such vehicle; and on any unauthorised route. Besides these provisions, there is nothing in the 1988 Act to deal with the manner of levy of vehicle tax or the collection thereof. In other words, the law made by the Parliament does not occupy the field of manner of levy of vehicle tax and collection thereof. If so, it is not possible to hold that there is direct conflict between the two provisions, namely, in the law made by the Parliament and by the State Legislature. Furthermore, on analysing the legislative intent and the efficacy of the impugned provisions enacted by the State Legislature concerning the manner of levy of vehicle tax and collection thereof, it will be amply clear that obedience to each of the laws (made by the Parliament and State Legislature) is possible without disobeying the other. The Court shall elaborate on this aspect while dealing with efficacy of the law made by the State Legislature a little later. Suffice it to observe that the argument regarding repugnancy is devoid of merit. [Para 34][1003-C-D; 1004-A-E; 1005-A]

1.2 As regards the 1976 Act enacted by the State Legislature, the same is ascribable to Entries 56 and 57 of List II – State List. Entry 56 deals with taxes on goods and passengers carried by road or on inland waterways. Entry 57 deals with taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of Entry

35 of List III. In one sense, the law made by the State Legislature is also ascribable to Entry 35 of List III under which the Parliament has already enacted 1988 Act. However, as aforementioned, the law made by the Parliament, being 1988 Act, does not touch upon or deal with the field of manner of levy of vehicle tax and collection thereof. Whereas, the 1976 Act enacted by the State Legislature is to consolidate and amend the laws relating to the levy of tax on motor vehicles and on passengers and goods carried by such vehicles in the State of Kerala. The levy of tax is spelt out in Section 3 of this Act. Section 4 deals with payment of tax and issue of licence. The writ petitioners have challenged the amendment made to this provision vide Act 24 of 2005 inserting sub-sections (7) and (8) therein. By this amendment, it is provided that 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 1985 Act shall, before effecting payment of vehicle tax under the 1976 Act, produce before the Taxation Officer the receipt of remittance of the contribution towards welfare fund due upto the preceding month and failure to do so, would entail in refusal to collect the vehicle tax under the 1976 Act. In the context of this provision, it has been urged that such a provision is in the nature of bootstrapping of two different liabilities. Section 8 mandates production of certificate of insurance by every registered owner or person having possession or control of a motor vehicle. Section

9 fastens liability to pay vehicle tax by person succeeding to the ownership, possession or control of motor vehicles. Sections 10 and 11 are of some relevance. Concededly, the validity of these two provisions have not been assailed by the writ petitioners and, failure to do so, may have some bearing on the view that we propose to take. From the scheme of the 1976 Act, it is amply clear that it is specific to levy of tax on motor vehicle and passengers and goods carried by such vehicle in the State of Kerala. 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. [Paras 35, 36][1005-B-F; 1006-A-G, 1007-C]

1.3 As regards the argument regarding bootstrapping of liabilities of permit-holder under two different State legislations, it is to say the least tenuous. It is open to the Legislature to combine levies for other purposes, such as education cess, etc., for collection of tax due and payable by the same tax-payer. It is one thing to say that the person is being compelled to discharge liability under two different State enactments, although he is not liable under one of the two. That is not the argument of these writ petitioners. The petitioners are not disputing their liability under both the State Enactments. The argument, however, is that the writ petitioners may intend to invoke remedy of appeal and revision in respect of liability fastened under the 1985 Act. This argument has been rightly negatived by the High Court in paragraph 18 of the impugned judgment by observing that sufficient safeguard has been provided under the relevant enactment to file appeal/revision by remitting 50 per cent of the amount demanded. The High Court issued directions in that regard in paragraph 19 of the impugned judgment. A circular has been issued on 16.6.2007, clarifying that the aggrieved person, who prefers appeal on payment of 50 per cent of the contribution under the Welfare Fund Act, is entitled to get a certificate to that effect and on production of that certificate before the Taxing Authorities, the vehicle tax could be received by the Authority without payment of the entire Welfare Fund of contributions. The High Court has already issued directions to extend similar benefit even in cases where review petition is filed within the prescribed time. The fact remains that no prejudice whatsoever is caused to the permit-holder who intends to pursue remedy under the 1985 Act against the demand received by him relating to the contribution of the Welfare Fund. [Paras 37][1007-D-H; 1008-A]

1.4 Reverting to the 1985 Act enacted by the State Legislature, indisputably, it is a welfare legislation constituting a fund to promote the welfare of motor transport workers in the State of Kerala. This Act is ascribable to Entries 23 and 24 of List III – Concurrent List. Entry 23 deals with social security and social insurance; employment and unemployment and Entry

24 deals with welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits. Ostensibly, it may appear that the liability arising from the obligations under the 1985 Act have nothing to do with the subject of vehicle tax. However, the 1985 Act has been enacted with the objects and reasons noted. As a vast number of employees were being engaged in Motor Transport Industry in the State in the private sector, the Government thought it necessary to provide for the constitution of a Fund to promote the welfare of such of the motor transport workers in the private sector who are not covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972. In other words, this Act came into being to ameliorate the difficulties encountered by the motor transport workers in the State of Kerala. In due course, it came to the notice of the Government that the system of determination and assessment of contribution from employers and adjudication of disputes, etc., as provided for in the 1985 Act had certain loopholes resulting in loss of welfare fund contribution. In that, the bus operators set forth a defence by creating bogus partnerships and showing relatives as employees to evade payment of contribution. Another device was to keep on changing the employees frequently. Thus, to check this mischief, an amendment was effected to the 1985 Act vide Act 23 of 2005 including to reduce the arbitrariness in fixing the contribution. The activities of motor transport workers are directly linked to the use and operation of the motor transport vehicles having permit issued under the 1988 Act in that regard. Under the said Act, the permitholder is obliged to ensure that the vehicle tax is paid regularly. The law clearly provides for action to be taken against the motor transport vehicle for failure to pay vehicle tax including to reject renewal of the permit. The stipulation in the 1985 Act is in the nature of ensuring that the vehicle owner/permitholder discharges both the liabilities and does not commit default in contributing to the welfare fund as also pay vehicle tax on time. Non-payment of vehicle tax may entail in stopping of motor vehicle by the Officers of Police or Motor Vehicles Department in exercise of power under Section 10 of the 1976 Act including to seize and detain the same pending production of proof remittance of tax as predicated in Section 11 of the Act. Additionally, the vehicle owner may have to suffer penalty under Section 16 and face prosecution under Section 17, besides the permit being rendered ineffective if tax is not paid by virtue of Section 15. [Para 38][1008-B-H; 1009-A-B]

1.5 Considering the scheme of the State legislations, it is incomprehensible to countenance the argument that the two provisions (of 1988 Act on the one hand and of 1976 Act and 1985 Act on the other) are inconsistent in any manner whatsoever. Whereas, the State enactments are complementary and can be given effect to without any disobedience to the Central legislations. As aforementioned, the 1988 Act does not cover the field of the manner of levy of vehicle tax and collection thereof. The same is covered by the State legislations. Concededly, the appellants have not disputed their liability to pay the vehicle tax levied under the 1976 Act as well as to pay contribution towards the workers’ welfare fund under the 1985 Act. So understood, the real grievance in these appeals by the motor transport vehicle owners/permit-holders is about compelling them to pay the welfare contribution dues as a precondition for collection of vehicle tax. We have no hesitation in taking the view that such dispensation cannot be construed as unconstitutional. Further, such a plea cannot be countenanced at the instance of someone who otherwise concedes liability to pay both the dues towards welfare fund contribution and vehicle tax. It is beyond comprehension that the vehicle owner/permit-holder can be heard to argue that he would not pay the dues under the 1985 Act and, yet, would continue with the business of motor transport as usual in the State of Kerala by exploiting the workers on the specious plea that the validity of the permit to operate transport vehicle cannot be interdicted under a State legislation. The provision in the form of Section 15 of the 1976 Act is in the nature of restating the consequences flowing from Sections 10 and 11 of the same Act to stop motor vehicle and to seize and detain the same if being used or operated without payment of vehicle tax. When action is taken by the competent authority under Sections 10 and

11 of the Act, inevitably, the transport vehicle in question for which permit has been taken is rendered unusable due to nonpayment of vehicle tax. The liability of the vehicle owner/permitholder 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. In this view of the matter, it would be unnecessary to dilate on the argument regarding validity of Section 15 of the 1976 Act because of lack of Presidential assent after coming into effect of the 1988 Act. [Paras 39, 40][1009-C; 1010-A-G]

1.6 This Court cannot be oblivious about the legislative intent for enacting the 1985 Act and the amendment effected thereto in 2005. The same is a beneficial legislation with avowed objective to ensure strict compliance of payment of welfare fund contribution to protect the workers of the commercial operations undertaken by the vehicle owners/permit-holders pursuant to a permit issued under the 1988 Act, and is to reach out to such workers who are typically unorganised and a part of informal workforce. Neither the provisions of the 1985 Act or the 1976 Act have the effect of interdicting the permit issued under the 1988 Act. 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. 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. the writ petitioners through their counsel had fairly accepted during oral argument that after the 2005 amendment, for all these years they have been following the dispensation provided under the State legislations without exception. In that sense, the challenge has become academic. Be that as it may, we have negatived the stand taken by the writ petitioners regarding the validity of the amended provisions being repugnant to the law made by the Parliament. [Paras 41, 42][1010H; 1011-A-D] Deep Chand vs. The State of Uttar Pradesh & Ors. [1959] Suppl. 2 SCR 8 – followed.

The State of Bombay & Anr. vs. F.N. Balsara AIR 1951 SC 318 : [1951] SCR 682, M. Karunanidhi vs. Union of India AIR 1979 SC 898 : [1979] 3 SCR 254, Hardev Motor Transport vs. State of M.P. & Ors (2006) 8 SCC

613 : [2006] 7 Suppl. SCR 766, Zaverbhai Amaidas vs. The State of Bombay [1995] 1 SCR 799, Ch. Tika Ramji & Ors., etc. vs. The State of Uttar Pradesh & Ors. [1956] SCR 393, Thirumuruga Kirupananda

Variyar Thavathiru Sundara Swamigal Medical

Educational & Charitable Trust vs. State of Tamil Nadu & Ors. (1996) 3 SCC 15 : [1996] 2 SCR 422, Kulwant Kaur & Ors. vs. Gurdial Singh Mann (Dead) by LRs. & Ors. (2001) 4 SCC 262 : [2001] 2 SCR 525, Kaiser-IHind Pvt. Ltd. & Anr. vs. National Textile Corpn. (Maharashtra North) Ltd. & Ors. (2002) 8 SCC 182: [2002] 2 Suppl. SCR 555, Hoechst Pharmaceuticals Ltd. & Ors. vs. State of Bihar & Ors. (1983) 4 SCC 45 : [1983] 3 SCR 130, State of Kerala & Ors. vs. Mar Appraem Kuri Company Limited & Anr. (2012) 7 SCC

106 : [2012] 4 SCR 448, Union of India & Ors. vs. Mohanlal Likumal Punjabi & Ors. (2004) 3 SCC 628: [2004] 2 SCR 468, Director of Elementary Education, Odisha & Ors. vs. Pramod Kumar Sahoo (2019) 10 SCC 674, Association of Natural Gas & Ors. vs. Union of India & Ors. (2004) 4 SCC 489 : [2004] 3 SCR 534, Dharappa vs. Bijapur Coop. Milk Producers Societies Union Ltd. (2007) 9 SCC 109 : [2007] 5 SCR 729, Ashok Kumar alias Golu vs. Union of India & Ors. (1991) 3 SCC 498 : [1991] 2 SCR 858, State of Tamil Nadu & Ors. vs. K. Shyam Sunder & Ors. (2011) 8 SCC

737 : [2011] 11 SCR 1094, Ajay Hasia & Ors. vs. Khalid Mujib Sehravardi & Ors. (1981) 1 SCC 722 : [1981] 2 SCR 79, The Collector of Customs, Madras vs. Nathella Sampathu Chetty & Anr. AIR 1962 SC 316 : [1962] SCR 786, New Central Jute Mills Co. Ltd. vs. Assistant Collector of Central Excise, Allahabad & Ors. (1970)

2 SCC 820 : [1971] 2 SCR 92 – referred to.

A.L.S.P.P.L. Subrahmanyan Chettiar vs. Muttuswami Goundan AIR 1941 FC 47, Prafulla Kumar Mukherjee & Ors. vs. Bank of Commerce Ltd., Khulna AIR (34) 1947 PC 60 – referred to.