Kerala High Court Upholds Over ₹15 Lakh Motor Vehicle Tax Demand On Puducherry-Registered Car Found Used In Kerala

Justices A. Muhamed Mustaque and Harisankar V. Menon noted that the NIL returns do not reflect any business being carried out by the assessee from Puducherry.

The bench opined that the onus shifts to the assessee to show that the vehicle was not being used in Kerala to attract tax.

In the case at hand, the assessee/appellant engaged in the business of manufacturing and distribution of plywood and had branches across the country, including one at Kariakal, Puducherry.

The assessee had purchased a car and got it registered in Puducherry. A demand notice was issued by the Sub-Regional Transport Officer/2^nd respondent, directing payment of tax under the Kerala Motor Vehicles Taxation Act, 1976, even when there was no permanent use of the vehicle in Kerala.

In response to the notice, a reply was filed by the assessee, and pursuant to the directions of the Kerala High Court, the Sub-Regional Transport Officer considered the issue, directing payment of Rs. 15,37,660/- towards tax, followed by recovery notices.

The assessee challenged the demand by filing a writ petition and submitted that the car was purchased in Puducherry and the registration was obtained in Puducherry to show that the assessee had a permanent business interest there, on account of which the vehicle was being used there. The Single Judge dismissed the writ petition.

The counsel for the assessee placed reliance on the registration obtained by the assessee from Puducherry under the GST Scheme, and also relied on the returns filed under the afore-mentioned statute in Puducherry, which were only NIL returns.

The bench noted that such NIL returns do not reflect any business being carried out by the assessee from Puducherry. This can only be used to show that the assessee is in the habit of complying with the statutory provisions by filing periodical returns.

The bench opined that the onus shifts to the assessee to show that the vehicle was not being used in Kerala so as to attract tax under the Taxation statute.

The bench stated that Additional documents would also not help the assessee since, when there is no business carried out in Puducherry, why the vehicle was being “used there” is the moot question for which no plausible explanation has been offered by the assessee.

The bench found no valid reasons to interfere in the impugned judgment of the Single Judge.

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

Case Title: M/s T P Trading Company v. The Transport Commissioner (Kerala State)

Case Number: WA NO. 1403 OF 2025

Counsel for Appellant/Assessee: Manu Vyasan Peter and P.B. Subramanyan

Counsel for Respondent/Department: Dr. Thushara James

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