Full Judgment Text
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PETITIONER:
THE REGIONAL TRANSPORT OFFICER-CUM-TAXING AUTHORITY, ROURKEL
Vs.
RESPONDENT:
STEEL AUTHORITY OF INDIA LTD.
DATE OF JUDGMENT09/11/1995
BENCH:
PUNCHHI, M.M.
BENCH:
PUNCHHI, M.M.
MANOHAR SUJATA V. (J)
CITATION:
1996 AIR 536 1995 SCC Supl. (4) 165
JT 1995 (8) 105 1995 SCALE (6)298
ACT:
HEADNOTE:
JUDGMENT:
O R D E R
The Steel Authority of India, the sole respondent
herein, employs a fleet of buses meant to carry its
employees from its township to its factory at Rourkela. This
has been so for over three decades. For some inexplicable
reasons, the Steel Authority of India Ltd. was all along
being made to pay tax under Item 3 of the Schedule to the
Orissa Motor Vehicles Taxation Act, 1975 on buses kept by it
on the footing of being goods carriers. As is the case of
both sides, Item 3 was hardly applicable and yet tax was
kept asked and paid. With effect from 19-12-1990, the
appellant herein, i.e., State of Orissa and its officers,
put to change the head of taxation and required the
respondent to pay higher tax under Item 4 of the Schedule,
whereunder rates of tax are prescribed for motor vehicles
plying for hire and used for conveyance of passengers,
including motor cabs. Challenging such step the respondent -
Steel Authority of India, moved the High Court of Orissa in
a writ petition under Article 226 of the Constitution.
Right at the outset, the High Court in dealing with the
controversy fell into a factual error in assuming that the
change effected was from Item No. 6 to Item No. 4 of the
Schedule. Item No. 6, however, is a residuary item and
covers up the cases of motor vehicles other than those
liable to tax under the earlier provisions of the Schedule.
Since the case of the respondent - Steel Authority of India
Ltd. is that the vehicles kept by it are for use of its
employees for the purpose stated above, without obligating
them to pay hire charges, it was a facility extended to the
employees, and thus per se, would not attract exigibility
under Item No. 4 but may fall under Item No.6, subject to
the right of the respondent to claim relief under Sections
10 and 15 of the aforesaid Act. The High Court, in these
circumstances, pronounced on certain legal aspects of the
matter on the supposition that the respondent - Steel
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Authority of India Ltd. had to prove its facts to claim that
it was not liable to pay tax at all on the vehicles in
question and thereby effected a remand of a sort. That
aspect apparently was in the area where relief could be
sought under sections 10 and/or 15 of the Act. As we have
been able to examine the judgment, the question whether the
Steel Authority of India Ltd. - the respondent herein, was
liable to pay tax under Item 6 or Item 4 of the Schedule was
not gone into.
Having heard learned counsel for the parties in detail,
we do not feel inclined to pronounce upon the correctness or
otherwise, of the judgment of the High Court, when it is
conceded by learned counsel for the Steel Authority of India
Ltd. that an inquiry may be held on the footing that the tax
is exigible from the Authority for keeping its fleet of
vehicles. And further, the change effected straightaway from
rates under Item No. 3 to Item No.4 was uncalled for without
there being a categorical finding by the taxing authorities
that those vehicles were being run for hire. The appellant
on the other hand, has demonstrably not been able to justify
before us how straightaway that jump in the rate could be
made without the necessary fact establishment. So we go
through a limited area of consensus to say that till reliefs
(if due) can successfully be sought by the Steel Authority
of India Ltd. under sections 10 and/or 15 of the Act, it is
exigible to tax and the corrective measure presently can be
for changing the rates of tax under Item No.3 to Item No.6,
reserving the right to the appellant-State to come to a
different conclusion after a fact finding inquiry, in which
of course, the respondent would be associated. The State
cannot be permitted to act arbitrarily in choosing the Item
of taxation and leave it to the subject to disprove
liability. It is the State which has to examine the facts
and then apply the charging Item on the plain language of
the provision obviating any unjust imposition. Till such
stage is arrived at, there is no occasion for the appellant-
State to demand tax over and above which in any event is due
to it under Item No.6 Nonetheless, we make it clear, that
this opinion of ours is only embedded in that area of
consensus and shall not be taken to be a pronouncement on
the applicability of Item No.6, in the facts and
circumstances of the case.
The appeal stands disposed of accordingly. No costs.