The Kerala High Court in Vakiyath Koya & Ors. v State of Kerala case opined that the government had paid heed to the concerns of the petitioners as it had extended absolute exemption from payment of tax for a period of 12 months and partial exemption for 3 months, since 2020.
On Wednesday the Kerala High Court in Vakiyath Koya & Ors. v State of Kerala case dismissed a batch of petitions filed by private bus operators seeking an extension of the tax exemption that was granted to them during the COVID-19 pandemic in 2020-2021.
The bench comprising Justice Bechu Kurian Thomas opined that the government had paid heed to the concerns of the petitioners as it had extended absolute exemption from payment of tax for a period of 12 months and partial exemption for 3 months, since the pandemic took root in 2020.
“Since exemption from payment of tax was granted for reasonable periods, it cannot be said that despite the restrictions and regulations brought in due to Covid-19 pandemic, the Government had not considered the plight of the stage carriage operators and contract carriage operators,“.
Stated the Court order.
The Petitioner made another argument for the extension of tax exemption made on the basis of the doctrine of legitimate expectation. The Court also dismissed the contention
“Further, the concept of legitimate expectation cannot be extended or stretched to assume that as and when a restriction is brought in, the Government should immediately order tax exemption. The grant of tax exemption for one quarter or more than one quarter of a year, cannot also give rise to a legitimate expectation that for every quarter of the year or for periods beyond that, the exemption will be extended,“.
the court ordered
Petitioners filed a batch of petitions who are owners of stage carriages as well as contract carriages, claiming the benefit of exemption from payment of tax for the period affected by the restrictions and regulations imposed due to the Covid-19 pandemic, from July 1, 2021 to March 31, 2022.
The petitioners contend that the lack of government support for private stage carriage operators has caused their numbers to dwindle from 34,000 in 2016 to 12,000 in 2021.
The Court, at the outset, accepted that the privately run public transportation system could not bear the economic brunt of the circumstances while the government-run/supported, public transportation could to a large measure, withstand the perils of the pandemic,
The court said that even though unprecedented situations warrant extraordinary actions, in the matter of taxation, the court must go strictly by the letter of law, while interpreting a statute.
The Kerala High Court citing relevant provisions of the Kerala Motor Vehicles Taxation Act, 1976 and made the following observations,
- Section 3: The burden of tax under the Act is not necessarily on the use of the vehicle on the roads, but the liability falls even on vehicles kept ready for use on roads. Therefore, petitioners cannot claim any benefit for non-payment of tax merely on the ground of restrictions and regulations imposed due to the pandemic;
- Section 5: If previous intimation is given about the non-use of the vehicle for a minimum of one month in a quarter, it shall be deemed that the vehicle is not used or kept ready for use in the State. None of the petitioners claimed the benefit of section 5 for the periods in question;
- Section 22: The Government has the power, in public interest, to make an exemption or reduction in the rate of tax, either prospectively or retrospectively. Out of a period of 15 months within the pandemic, absolute or total exemption from tax was granted for 12 months. Therefore, it cannot be said that the Government had not considered the plight of the petitioners.
Accordingly, the Court held that the grant of exemption from tax is a matter to be decided based on policy.
“Even if circumstances existed similar to those for the period during which exemption was granted, that will not confer a right to obtain an exemption from tax for other periods. No semblance of arbitrariness or unreasonableness is reflected in the manner of grant or denial of tax exemption,”
the Court stated dismissing the petitions.
Petitioner Advocate
Advocates VK Gopinathan Nair, G Hariharan, OD Sivadas, and I Dinesh Menon
Advocate for impleading respondents supporting the petitioners’ cause.
Advocate Stalin P Davis
Advocate for respondents.
Senior Government Pleader Dr. Thushara James
Read Judgment
