Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3162/2006
TATA IRON & STEEL COMPANY LTD. APPELLANT(S)
VERSUS
DISTRICT TRANSPORT OFFICER & ORS. RESPONDENT(S)
J U D G M E N T
A.K.SIKRI,J.
In the instant appeal we are concerned with the issue as to
whether the appellant is liable to pay additional motor vehicles
tax in terms of sub-section(1A) of Section 6 of the Bihar and
Orissa Motor Vehicles Taxation Act, 1930 (hereinafter referred to
as ‘the Act’). Section 6 of the Act relates to imposition of tax
on the motor vehicles. Under sub-section(1) motor vehicles tax is
leviable on every motor vehicle. The rates of such tax are
specified in the Second Schedule of the Act. However, under
sub-section (1-A), certain kinds of motor vehicles are also liable
to pay additional motor vehicles tax at the rate specified in the
Third Schedule of the Act. Such vehicles have to fulfill the
description of “Public Service Motor Vehicle”. Section 2 contains
certain definitions for the aforesaid purposes. Relevant provisions
are Section 2(a) and (j), which read as under:
Signature Not Verified
Digitally signed by
ASHWANI KUMAR
Date: 2015.09.18
15:56:27 IST
Reason:
“2(a). “invalid carriage”, “motor cab”, “motor
cycle”, “motor vehicle”, “public place”, “public
service vehicle”, “trailer”, “transport vehicle”,
“unladen weight”,[“certificate of registration”,
“registering authority”, ”registered laded
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weight”, and “tractor”] shall have the meanings
respectively assigned to them in the Motor
Vehicles Act, 1939 (IV of 1939);
xxxx
xxxx
2(j) “Public Service Motor Vehicle” means any
motor vehicle used or adapted to be used for the
carriage of passengers and goods for hire or
reward and includes a motor cab, a stage
carriage, or a public carrier;”
As per Section 2(a) above mentioned, kinds of vehicles and
carriages etc., which include public service vehicles, are assigned
the same meaning as is given in the Motor Vehicles Act, 1939. In
any case, insofar as “Public Service Motor Vehicle“ is concerned,
it is specifically defined under Section 2(j) of the Act. Reading
of the aforesaid definition would show that a motor vehicle falling
under the definition of “Public Service Motor Vehicle“ has to
satisfy the following conditions:
1) It is used or adapted to be used for the carriage of
passengers and goods;
2. Such use has to be for ‘hire’ or ‘reward’.
If the aforesaid conditions are satisfied, then the motor
vehicle of ‘any’ description as mentioned in Section 2(a) would
become “Public Service Motor Vehicle“. The question is as to
whether the motor vehicles used by the appellant herein, for which
the respondent is demanding additional motor vehicle tax, fulfill
the aforesaid conditions. The vehicles with which we are concerned
are altogether 57 vehicles which include bus, truck, tipper, water
tanker,diesel tanker, explosive van, trailer, canteen van and
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school bus etc. School bus is used for carrying the children wards
of the employees of the appellant from and to educational
institutions purely as welfare measure. Tipping trucks/trucks are
used for handling of coal within the mining area for production
purposes. As far as explosive vans are concerned, these are used
for transfer of explosives from the appellant “Magazine to mines”.
Water tanker is used for sprinkling of water for dust suppression
for mining operations and diesel tanker is used for filling up
diesel to machinery within the mining area. As far as canteen vans
are concerned, they are used for welfare measures only. What
follows from the aforesaid use of various vehicles is that these
are used by the appellant for its own purposes viz. these are
capitively used. The appellant does not deny that these motor
vehicles in question are adapted to be used for carriage of
passengers and goods. However, it is contended that since the
vehicles are used capitively by the appellant for its own purposes,
these are not used for ‘hire' or 'reward' and, therefore, the
second requirement, as mentioned in the definition of “Public
Service Motor Vehicle,“ has not been fulfilled and, therefore, no
such additional motor vehicles tax is required to be paid.
This very contention was taken before the Adjudicating
Authority as well. However, the said Authority, namely the District
Transport Officer, Hazaribagh, rejected the argument on the ground
that the vehicles are used for ‘reward’. For this purpose, the
Adjudicating Authority referred to the Oxford dictionary meaning
for the word ‘reward’ which means “recompense for service or merit,
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given or obtained in return for work of service”. In the opinion
of the Adjudicating Authority, it would mean that ‘reward’ is
something which is not necessarily only given by somebody but it
would also recompense the situation where one gives to itself
something in return for the work or service. On that basis, the
Adjudicating Authority stated that the requirement of ‘hire’ or
‘reward’ was also fulfilled and, therefore, additional motor
vehicles tax was liable to be paid. This order was challenged by
filing writ petition in the High Court of Jharkhand at Ranchi. To
the aforesaid reasons given by the Adjudicating Authority, which
was the foundation of the order of the Adjudicating Authority, the
plea of the appellant was that the expression ‘hire’ or ‘reward’
clearly postulated that the vehicle must be run for the benefit of
another, either for higher charge, or for some reward received from
the user and this was not a case where the vehicle was being used
in such a manner. It was, thus, argued that no reward was received
for use of the vehicles for its own use or for carrying its
employees to work or the children of the employees to educational
institutions and back and, therefore, the ingredients of the
definition of “Public Service Motor Vehicle “ were not satisfied.
The said writ petition of the appellant has also been dismissed by
th
the impugned judgment dated 20 August, 2004, out of which the
present appeal arises.
After perusing the impugned judgment it would be seen that the
aforesaid contention of the appellant challenging the order of the
Adjudicating Authority has not been dealt with or answered at all
though it is specifically taken note of in para 4 of the said
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judgment. On the other hand, the entire basis of the impugned
judgment rests on the discussion on the explanation for “adapted”
which occurs in the definition and which is the first requirement
of the definition as mentioned above. Referring to some judgments
of Kerala High Court as well as of this Court in M/s. Central
Coalfields Ltd. vs. State of Orissa [AIR 1992 SC 1371 = (1992)
Supp.3 SCC 133 ], the High Court has held that the expression
‘adapted’ has to be given its full meaning and when the vehicle was
capable of being used for carrying of passengers and goods, it
would be treated as “Public Service Motor Vehicle.“ This approach
is clearly faulty. There was no dispute about the first
requirement. As mentioned above, the appellant had rested its case
on the submission that the second requirement namely ‘hire’ or
‘reward’ had not been fulfilled. That argument has not been
answered and instead the High Court went astray in basing its
judgment on altogether different aspects which were not even in
dispute.
In the aforesaid backdrop, when the High Court has failed to
answer the contention of the appellant on the basis of which the
order of the Adjudicating Authority was challenged, we have to
decide as to whether the Adjudicating Authority was correct in
holding that the use of vehicles in the manner mentioned above
amounts to using for ‘reward’. We do not think it to be so.
Mr. D.A. Dave, learned senior counsel appearing for the
appellant, was right in his submission that the expression ‘hire’
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or ‘reward’ would mean that the vehicle must be run for the benefit
of another. Obviously, the appellant is the owner, if the vehicle
is given on ‘hire’ to a third person and charges are received
therefrom, it would amount to using the vehicle for ‘hire’.
Likewise, when the owner of the vehicle uses the vehicle
himself but for the benefit of another person i.e. third person and
receives some charges for the said use, that may fulfill the
requirement of ‘reward’. Insofar as the present case is concerned,
the vehicles are not used for the third party at all.
Most of the vehicles are used for business purposes. Some
vehicles are used for carrying the children of the employees from
their residence to schools and back. That would not be treated as
using the vehicle for public or third party as held by this Court
in M/s. Tata Engineering Locomotive Co. Ltd. V. The Sales Tax
Officer Poona and Anr. [(1979) 1 SCC 208] . We may also usefully
refer the judgment of this court in Hindustan Aeronautics Ltd. Vs.
Registering Authority and Ors.[(1999)8 SCC 169], where the
expressions 'hire' or 'reward' are explained in the following
manner:
“9. Although the circular is captioned Revision
of charges to be levied for private use of
Company's Vehicles, it is made clear that the
policy of the company is to discourage private
use of company's transport or vehicles but
wherever it is considered necessary to permit
such use in unavoidable cases, the officer
concerned will intimate the employees of the
revised rates before forwarding the requests to
the General Manager for approval. Thus the rates
specified are not by way of an offer to the
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general public but to regulate the use of the
vehicles in a particular manner. Thus the buses
are not plied for hire or reward. And, in
addition to that, the vehicles are used mainly
for their employees and their children as part
of the welfare measure of the employees. If the
members of the family of the employees, like the
spouses or children, are allowed to travel in
those buses, it should not be treated as the
vehicle being plied for hire or reward. In such
circumstances, we do not think that the
authorities were justified in treating the
vehicles as being plied for hire or reward. They
have lost sight of the fact that the requirement
to attract the charge under Entry 4 of the
Schedule to the Act was plying of motor vehicles
for hire and not mere user. Therefore, we do not
think that either the High Court or authorities
under the Act were justified in either imposing
the higher rate of tax under Entry 4 of the
Schedule to the Act or upholding the same when
challenged.”
Mr. Sinha, learned senior counsel who appeared for the
respondent, submitted that the case is covered by two judgments of
this Court, which are: (1) State of Mysore vs. Syed Ibrahim
[(1967) 2 SCR 361 and (2) M/s. Central Coal Fields Ltd. Vs. State
of Orissa [(1992) Supp.3 SCC 133 . In State of Mysore(supra) where
the question arose as to whether vehicle in question used would be
covered by the definition of “Public Service Motor Vehicle“ and
public service vehicle contained in Section 42(1) read with Section
2(18) of the Act. The question was answered in the affirmative.
However, the issue which was to be determined was as to whether
carrying of passengers would make the vehicle as “Public Service
Motor Vehicle“. There was no dispute that the said vehicle was
used for 'hire' or 'reward' and, therefore, this aspect, with which
we are directly concerned in the present case, was not in issue at
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all. The judgment therefore, shall be no help to the respondent.
Same is the position in M/s. Central Coal Fields Ltd.(supra) as
well wherein again the question that fell for consideration was as
to whether a particular vehicle was adapted for use upon roads to
attract tax liability. Here again the issue pertaining to the
meaning that is to be assigned to 'hire' or 'reward' had not arisen
for consideration.
In view of our aforesaid discussion, we are of the opinion
that the judgment of the High Court is unsustainable. The same is,
accordingly, set aside and the present appeal is allowed.
No order as to costs.
......................J.
[A.K. SIKRI]
......................J.
[ROHINTON FALI NARIMAN]
NEW DELHI;
SEPTEMBER 08, 2015.
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ITEM NO.102 COURT NO.14 SECTION IIIA
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 3162/2006
TATA IRON & STEEL COMPANY LTD. Appellant(s)
VERSUS
DISTRICT TRANSPORT OFFICER & ORS. Respondent(s)
Date : 08/09/2015 This appeal was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN
For Appellant(s) Mr. D.A. Dave, Sr. Adv.
Mr. Gopal Jain, Sr. Adv.
Mr. R.N. Karanjawala, Adv.
Ms. Nandini Gore, Adv.
Mr. Kartik Bhatnagar, Adv.
Ms. Tahira Karanjawala, Adv.
Ms. Neha Khandelwal, Adv.
Ms. Manik Karanjawala, Adv.
For Respondent(s) Mr. Ajit Kumar Sinha, Sr. Adv.
Mr. Gopal Prasad, Adv.
Mr. Jayesh Gaurav, Adv.
UPON hearing the counsel the Court made the following
O R D E R
The appeal is allowed with no order as to costs in terms
of the signed reportable judgment.
(Ashwani Thakur) (Renu Diwan)
COURT MASTER COURT MASTER
(Signed reportable judgment is placed on the file)