Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4
CASE NO.:
Appeal (civil) 7033 of 2003
PETITIONER:
Commissioner, Transport-cum-Chairman & Ors.
RESPONDENT:
Tapan Kumar Biswas
DATE OF JUDGMENT: 26/08/2004
BENCH:
S. N. Variava & G. P. Mathur
JUDGMENT:
J U D G M E N T
S. N. VARIAVA, J.
This Appeal is against the Judgment of the High Court of Orissa
dated 8th January, 2002.
Briefly stated the facts are as follows.
The Respondent is the owner of a Truck bearing No.WMK-7067.
In respect of this Truck, the registration and fitness certificate had
been issued and motor vehicle tax was being paid regularly. The said
vehicle met with an accident on 23rd January 1991. The Respondent
gave off-road intimation as required for the period January 1991 to
December 1991. He did not, however, submit any off-road intimation
for the period from January 1992 to December 1995. As the accident
was severe, the fitness certificate was cancelled by the Appellant on
24th January 1991.
The Taxing Officer-cum-Regional Transport Officer of the
Appellant by his letter dated 10th January 1996 called upon the
Respondent to pay a sum of Rs.27,750/- being the tax for the period
from January 1992 to December 1995. The Respondent preferred an
Appeal, against this demand, before the Chairman, Regional Transport
Authority. By an Order dated 23rd August 1996, the appellate
authority dismissed the Appeal. Revision filed by the Respondent,
before the Transport Commissioner, also stood dismissed.
The Taxing Officer also raised further demands for subsequent
periods. The Respondent thus filed a Writ Petition in the High Court.
The Writ Petition has been allowed by the impugned Judgment. It has
been held that the tax on motor vehicle can only be levied on vehicles
which are suitable for use on roads, kept in the State of Orissa. It is
held that under the Orissa Motor Vehicles Act unless a vehicle had both
a certificate of fitness as well as a valid certificate of registration, the
vehicle cannot be presumed to have been kept for use. It is held that
the demand was thus unsustainable in law and the notices of demand
were quashed.
We have heard the parties.
The relevant provisions of the Orissa Motor Vehicles Taxation
Act, 1975 read as follows:-
"3. Levy of tax\027(1) Subject to the other
provisions of this Act, there shall be levied on
every motor vehicle used or kept for use within
the State a tax at the rate specified in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4
Schedule-I;
(2) The State Government may by
notification, from time to time, increase the
rate of tax specified in Schedule-I:
Provided that such increase shall not
exceed fifty per cent of the rate specified in
Schedule-I.
(3) All references made in this Act to
[Schedule-I] shall be construed as references
to Schedule-I as for the time being amended in
exercise of the powers conferred by this
section.
Explanation\027An owner who keeps a transport
vehicle for which the certificate of fitness and
the certificate of registration are valid, or an
owner who keeps any other motor vehicle, of
which the certificate of registration is valid,
shall, for the purpose of this Act, be presumed
to keep such vehicle for use :
Provided that if the Taxing Officer finds a
motor vehicle having been used on any day
during the period for which the registration
certificate of a vehicle has been suspended or
cancelled under the relevant provisions of the
Motor Vehicles Act such vehicle shall be
deemed to have been kept for use for the
whole period without payment of tax.
.................................................................
.................................................................
10. Prior intimation of temporary
discontinuance of use of a vehicle\027(1)
Whenever any motor vehicle is intended not to
be used for any period, the registered owner or
person having possession or control thereof
shall on or before the date of expiry of the
term for which tax has been paid, deliver to
the Taxing Officer, an undertaking duly signed
and verified in the prescribed form and manner
specifying the period aforesaid and the place
where the motor vehicle is to be kept
alongwith such other particulars as may be
prescribed and the registration certificate,
fitness certificate, permit and tax token, then
current and shall from time to time by
delivering, further undertakings give prior
intimation to the concerned Taxing Officer of
the extension, if any, of the said period and
the changes, if any, of the place where the
motor vehicle shall be kept :
Provided that no such undertaking shall
relate to a period exceeding one year at a
time.
(2) If at any time during the period
covered by an undertaking as aforesaid the
motor vehicle is found being used or is kept at
a place in contravention of any such
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4
undertaking, such vehicle shall, for the
purposes of this Act, be deemed to have been
used throughout the said period without
payment of tax.
(3) In the absence of any undertaking
delivered under Sub-section (1) every motor
vehicle liable to tax under this Act shall be
deemed to have been used or kept for use
within the State."
Thus, under Section 3 tax has to be paid on every motor vehicle
used or kept for use within the State. If a transport vehicle has a
certificate of fitness as well as a valid certificate of registration then
that vehicle will be presumed to have been kept for use. However,
this does not mean that a vehicle which does not have a certificate of
fitness and/or a certificate of registration is not capable of being used
on the road. Merely because, legally, a vehicle cannot be plied on the
road without a certificate of fitness and/or the registration certificate
would not mean that all such vehicles are not capable of being used on
the road. Under the Act, the owner of the vehicle has to pay tax. That
is why Section 10 provides that whenever any motor vehicle is
intended not to be used on the road for any period, the registered
owner or person having possession or control thereof has to give an
undertaking duly signed and verified in the prescribed form and
manner and the taxing authority must be given intimation about the
period the vehicle is intended not to be used and the place where the
motor vehicle is going to be kept. The relevant documents including
the registration certificate, fitness certificate, permit and tax token,
etc. are to be delivered to the Taxing Officer. The undertaking
contemplated by Section 10 can only be for a period of one year at a
time. Thus, it is clear that such an intimation and undertaking has to
be given from year to year if the vehicle is intended not to be used on
the road for more than one year. If no intimation, as required under
Section 10 along with the undertaking, has been given then, by virtue
of proviso (3) to Section 10, it will be deemed that the vehicle had
been used or kept for use within the State.
In this case, admittedly, during the initial period the required
intimation and undertaking had been filed. But for the subsequent
periods the undertaking has not been filed and intimation not given.
The undertaking filed for the initial period would not operate beyond
the period of one year. As no subsequent undertaking was filed, it has
to be presumed that the vehicle had been used or kept for use within
the State. The High Court was not right in concluding that merely
because the certificate of fitness was cancelled, it could not be said
that the vehicle had not been kept for use in the State.
Our view is supported by a decision of this Court in Mahakoshal
Tourist, Napier Town & Ors. Vs. State of M.P. & Ors. reported in
(2002) 7 SCC 245. In this case, the vehicle had been registered in
Madhya Pradesh but was plying out of the State for a long period. Tax
was demanded on that vehicle by the State of Madhya Pradesh. A
submission that tax was not payable as the vehicle had not been used
in the State was negatived. It was held that mere non-use of the
vehicle was not sufficient. This Court held that in order to avoid tax
liability the fact of non-use of the vehicle had to be declared to the
concerned authority.
A similar view has also been taken in an unreported Judgment of
this Court dated 26th February 2004 in Civil Appeal No. 3599 of 1998.
In this case, the vehicle had not been used as a stage carriage permit
had not been granted. The submission that without the stage carriage
permit, the vehicle could not be used and, therefore, there was no
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4
liability to pay tax was not accepted. This Court held that under
Section 10 of the Orissa Motor Vehicles Taxation Act, in the absence of
any undertaking and intimation it had to be presumed that the vehicle
had been used or kept for use within the State.
In this view of the matter, the decision of the High Court cannot
be sustained. It is set aside. The Writ Petition filed by the Respondent
stands dismissed.
The Appeal is accordingly allowed. There will be no order as to
costs.