The Hindu Business Line : Tax meter that kept ticking for a vehicle in time warp

KSFC is short for Karnataka State Financial Corporation. Its homepage http://ksfc.kar.nic.in announces itself as "One of the fast-track term-lending financial institutions in the country." You'd also learn that "With assistance to more than 1,54,000 units amounting to nearly Rs 7,426 crore over the last 46 years in the State of Karnataka, KSFC is one of the robust, and professionally managed State Financial Corporations."

Yet, the corporation presented a sorry spectacle before Justice D. V. Shylendra Kumar of Karnataka High Court, when weakly arguing a case against the Regional Transport Officer and Taxation Authority.

The story that emerges from the text of the judgment dated January 6 begins with KSFC advancing monies to a borrower for the purchase of a motor vehicle. The loan turned bad, when the borrower didn't repay the loan. So, the corporation seized the vehicle. But, that was twelve years ago, on March 24, 1994.

The vehicle was parked in the factory premises of another unit, which too had been seized by the corporation. More than five years passed by. On August 16, 1999, the corporation filed `non-user report' under the Karnataka Motor Vehicles Taxation Act, 1957, after paying the arrears of tax in respect of the vehicle prior to the seizure.

About five years later, KSFC received a demand from the Regional Transport Officer (RTO) for Rs 1,35,374, "being the tax payable in respect of the vehicle, as if it were on road for the period from September 1, 1999 to April 30, 2004."

According to the RTO, the demand was raised "based on a report submitted by the Motor Vehicles Inspector," who in turn had visited "the place where the vehicle had been intimated to have been parked" to verify if the vehicle was there. Lo, "it was not found there." Therefore, the exemption from the payment of tax could not be continued in favour of the vehicle, opined the transport officials. "On the premise that if the vehicle was used on road during such period, it is inevitable the petitioner, being the financier in possession/custody of the vehicle, has to pay the tax," reasoned the RTO.

Is parking such a major issue? Yes, it seems. For instance, Newt Gingrich advises that the primary purpose of a political leader is to build a majority thus: "If voters care about parking lots, then talk about parking lots." And Ronald Reagan had said: "It's silly talking about how many years we will have to spend in the jungles of Vietnam when we could pave the whole country and put parking stripes on it and still be home by Christmas."

Okay, what did KSFC do? It approached the Appellate Authority, the Deputy Commissioner for Transport, Gulbarga. In December 2004, however, he dismissed the appeal. The authority said that the Motor Vehicles Inspector's version had to be accepted, since it was "by a public officer in the normal course of his functions and duties," as against KSFC's version that the vehicle was "at the same place".

Aggrieved, the corporation took up the issue before the High Court. For, as Bill Bradley says, "Ambition is the path to success. Persistence is the vehicle you arrive in." At the court, D. S. Joshi argued for KSFC. He said that the authorities had not made `a proper verification' and that the version of the Motor Vehicles Inspector was not correct. The vehicle had remained in the same place and `it continues to remain even as on today', said Joshi, to reason why the tax exemption should not be withdrawn.

Joshi contended that KSFC officials too are public servants (within the meaning of this expression as it occurs in Section 21 of the Indian Penal Code, 1860), and so the Appellate Authority was not justified in giving weightage only to the version of the Motor Vehicles Inspector as against the say of KSFC's officials.

One other argument of Joshi was that KSFC had seized the vehicle using statutory powers. Accordingly, the corporation's officials could not be `mulcted with tax liability', said Joshi. For the defendant, it was Niloufer Akbar, Additional Government Advocate, who argued.

Parked even now!

After hearing rival contentions, the court said, "Whether the vehicle was available in the place where it had been parked or not is a pure question of fact." Referring to Joshi's assertion that the vehicle was available at the place, and that it could be verified `even as of now also', Justice Kumar said, "I do not find it is a proper exercise of the power by this court for embarking on such enquiry."

Writ jurisdiction is neither an appellate jurisdiction, nor one to correct the questions of fact, said the judge. Any interference is possible only if it is shown that authorities/officers who passed the orders acted in a totally arbitrary manner or abused their powers.

The corporation had brought upon itself "certain unwanted and avoidable liabilities," opined the judge. The case in question only showed `the negligence and the careless manner of the functioning of the officers' of KSFC, said the court, because "the vehicle which was seized in the year 1994 has continued to remain in the same place where it had been parked in even in the year 2006."

Justice Kumar added: "It only shows the inefficiency of the officers, as undoubtedly the vehicle is not now productive nor would keeping it in a garage for such a long period enhance its value but on the other hand it can only be of junk value as of now."

Again, on the other argument of Joshi — that KSFC officials had only used statutory powers to seize the vehicle — the judge pointed out that the Karnataka Motor Vehicles Taxation Act, 1957 does not give any such immunity as prayed for by the corporation.

"If the officers are exercising such statutory powers, they should act in a more diligent and responsible manner than to leave the seized vehicle to rot and wither away after seizure rather than to realise the dues of the public sector financial corporation which is only a drain on its resources and detriment to the public at large," noted the judge.

To wrap, here's a snatch of Tim Allen's wisdom: "My mom said the only reason men are alive is for lawn care and vehicle maintenance." And, for better health, this, from Lewis Mumford: "Restore human legs as a means of travel. Pedestrians rely on food for fuel and need no special parking facilities."

Tailpiece

"At this speed of Budget-making... "

"They should make more money than now?"

"Not only that, they should be able to draw the Budget for the next few years during the spare time!"

Detaxification@TheHindu.co.in

D. Murali

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