No Motor Vehicle Tax On Vehicle Rendered Unroadworthy After Accident, Even If Owner Failed To Intimate Authorities: Kerala High Court

The Kerala High Court has held that motor vehicle tax cannot be imposed for a period during which a vehicle was neither used nor kept for use on the road because it had become completely unroadworthy, even if the registered owner failed to submit the prescribed advance intimation in 'G Form' under Kerala Motor Taxation Rules. Justice Ziyad Rahman A.A., was delivering the judgment in a writ petition filed by a carriage owner whose vehicle became unfit to use in road pursuant to a road accident. The brief facts of the case is that the vehicle of the petitioner was involved in an accident with a KSRTC bus on September 16, 2017 and suffered damage so severe that it became completely unfit for road use.Despite the accident, the authorities subsequently demanded ₹10,93,150 towards motor vehicle tax arrears from April 1, 2018 onwards. Revenue recovery proceedings were also initiated in April 2025.The petitioner claimed that immediately after the accident, he had submitted a representation before the Regional Transport Officer, Thrissur, about the accident and also requesting for exemption from the tax. The State contended that the petitioner had not established that his representations seeking exemption had been received by the RTO. It was also argued that the petitioner had failed to comply with the requirement of submitting the prescribed 'G Form' in advance.The Court, noted that the FIR prima facie indicated that the vehicle had suffered serious damage and that the vehicle appeared to be in an abandoned condition. The Court went on to examine the liability to pay the tax under the Kerala Motor Taxation Act and noted that Section 3(1) of the Act contemplates that tax shall be levied on every motor vehicle used or kept for use in the State. The Court thus observed that in cases where it is possible for the registered owner of the vehicle to demonstrate that, the vehicle was completely unfit and beyond repair for using it on the road as on the date, consequent to an accident or for any other reasons, there cannot be any tax liability upon the said vehicle. It also took note of the fact that the tax demand for the period beginning in 2018 was raised only in April 2025. This delay, the Court said, contributed to the accumulation of the substantial arrears and deprived the owner of an earlier opportunity to address the alleged liability.While acknowledging that every registered owner has a statutory obligation to ensure timely payment of motor vehicle tax, the Court held that this obligation cannot be applied mechanically to a vehicle which, on evidence, was no longer capable of being used or kept for use.The State had also submitted that Rule 10 of the Kerala Motor Vehicle Taxation Rules, which contemplates advance intimation of non-use through 'G Form', deals with exemption from payment of tax for a temporary period. The Court added that this provision cannot be treated as creating a tax liability where the vehicle had become permanently unfit for use. “Considering the fact that, the liability to pay tax is on the use of the vehicle or for keeping the vehicle for use, the only conclusion possible is that, no tax liability could be imposed, in such cases where, the registered owner convincingly establishes before the authorities that, the vehicle was indeed not used or kept for use. The condition of the vehicle, in respect of which the tax becomes payable, is a fact which can be verified by the authorities concerned and in case the registered owner is able to demonstrate with proper documents and materials that, the vehicle sustained serious damage making it not roadworthy beyond repair, the tax need not be collected in respect of the period during which, the vehicle was remaining as not roadworthy.” Court observed. It was further observed that Rule 10 prescribed for submission of an intimation of non-use, which is an exemption from payment of tax for a temporary period, which is distinct from a situation where the vehicle has become unfit permanently due to serious damage. The Court was conscious that a registered owner has a statutory obligation to intimate the authorities about the unfit condition of a vehicle. However, it held that failure to comply with that procedural requirement cannot automatically result in tax being imposed on a vehicle which was otherwise not taxable because it was incapable of being used.The Court further noted that the nature of persons commonly affected by the stipulations are generally ordinary people who operate the vehicle on their own, for earning their livelihood and their priorities when a vehicle meets with an accident resulting in irretrievable damage is to ensure the source of livelihood is secured without any break and not the timely intimation of the condition of vehicle is given to the authorities. “While enforcing the law on the principles that, ignorance of law cannot be an excuse. Although, such persons cannot be granted exemptions as such, at least an opportunity can be ...

No Motor Vehicle Tax On Vehicle Rendered Unroadworthy After Accident, Even If Owner Failed To Intimate Authorities: Kerala High Court

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No Motor Vehicle Tax On Vehicle Rendered Unroadworthy After Accident, Even If Owner Failed To Intimate Authorities: Kerala High Court

Anamika MJ

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Anamika MJ

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