Full Judgment Text
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PETITIONER:
SHRI M. P. SINGH, DY. TRANSPORT COMMISSIONER,M.P., GWALIOR
Vs.
RESPONDENT:
ANAND TRANSPORT CO.(P) LTD. ETC.
DATE OF JUDGMENT29/07/1971
BENCH:
GROVER, A.N.
BENCH:
GROVER, A.N.
HEGDE, K.S.
CITATION:
1971 AIR 2127 1971 SCR 984
ACT:
Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act,
1959--Section 7-Return filed accepted as correct-No order
quantifying amount of tax necessary before issuing demand
notice.
HEADNOTE:
Under the Madhya Pradesh Motor Vehicles (Taxation of
Passengers) Act, 1939, where returns have been accepted as
correct nothing more need be done except to recover the tax
due which has not been paid and no assessment order need be
passed in view of the express language of s. 7. It is only
when the returns have not been submitted or when returns
submitted are found to be incorrect and incomplete that the
tax officer has to make an enquiry and determine the sum
payable by the operator by way of tax. Simmilarly if there
has been escapement of tax, proceedings have to be taken
under s. 8 and an order has to be made after an enquiry.
The position would be the same if penalty is sought to be
levied under s. 9. [986F-H; 987A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1449 to
1454 of 1967.
Appeals by special leave from the judgments and orders dated
December 15, 1966 of the Madhya Pradesh High Court in Misc.
Petitions Nos. 303 of 1966 etc.
I. N. Shroff, for the appellants (in all the appeals).
M. N. Phadke, K. L. Hathi and P. C. Kapur, for the
respondents (in C.As. Nos. 1449, 1450 and 1452 of 1967).
V.S. Desai, K. L. Hathi and P. C. Kapur, for the
respondents (in C.As. Nos. 1453 and 1454 of 1967).
The Judgment of the Court was delivered by
Grover, J.-All these appeals arise out of writ petitions
that were filed in the High Court of Madhya Pradesh
challenging the notices of demand issued by the Deputy
Transport Commissioner for payment of the amount of
passenger tax said to be due under the Madhya Pradesh Motor
Vehicles (Taxation of Passengers) Act, 1959, hereinafter
referred to as the ’Act’. By a common judgment dated
November 8, 1966 the High Court allowed the petitions and
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quashed the demand notices. The appeals may be divided into
two categories. In C. As. 1449 and 1453 of 1967 returns had
been duly filed as contemplated by s. 5 of the Act but no
tax had been deposited as required by s. 6. Demand
9 85
notices were issued in respect of the tax payable pursuant
to the returns some years later. Proceedings were also
taken as no payment was made for recovery of the tax as
arrears of land revenue. In the other four appeals the
returns were never filed but it appears the authorities did
take certain proceedings under S. 7 of the Act and in some
cases accounts of the respondents were checked and their
liability determined. When demand notices were sent and
recoveries sought to be made the writ petitions were filed.
The High Court did not go in these matters fully ,and
treated all the petitions as if the facts were similar.
Section 3 of the Act which is the charging section provides
that there shall be levied and paid to the State Government
a tax on all passengers carried by stage carriages at a rate
equivalent to 15 % of the fare inclusive of the tax payable
to the operator of a stage carriage. The tax has to be
collected by the operator of a stage carriage and paid to
the State Government in accordance with the provisions of
the Act. Under S. 5 the operator must deliver to the tax
officer or to such prescribed officer as may be specified a
return in the prescribed form and manner either daily or at
such intervals as may be prescribed. Section 6 lays down
that the tax payable during any month in accordance with the
return submitted under S. 5 shall be paid into a Government
treasury by the operator and the receipt evidencing such
payment has to be forwarded to the Tax Officer. Sections 8,
9 and 10 are in the following terms
"(8) Fares escaping assessment.-If, for any
reason, the whole or any portion of the tax
leviable under this Act, for any month has
escaped assessment, the Tax Officer may, at
any time within, but not beyond, one year from
the expiry of that month, assess the tax which
has escaped assessment, after issuing a notice
to the operator and making such inquiry as
the officer may ,consider necessary.
(9)Penalty for non-payment of tax.-Where
the whole orany portion of the tax payable
to the State Government in respect of any
stage carriage for any month or portion
thereof in pursuance of ss. 6, 7 and 8 has not
been paid to it in time the Tax Officer may,
in his discretion, levy in addition to the tax
so payable, a penalty not exceeding 25 per
cent of the maximum tax which would have been
payable to the State Government if the stage
carriage had carried its full complement of
passengers during such month or portion
thereof. (10)Recovery of tax, etc,-(1
) In
the cases referred, to in sections 7, 8 and 9
the, Tax Officer shall serve on the operator a
notice of demand for the sums payable
9 86
to the State Government and the sums specified
in such notice may be recovered from the
operator as arrears of land revenue.
(2)The tax shall be a first charge on the
stage carriage in respect of which it is due
as also on its accessories and such stage and
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the accessories thereof may be attached and
sold for the recovery of the tax under the
appropriate law relating to the recovery of
arrears of land revenue."
Section 12 provides for an appeal against a notice of
demand’ served under S. 10.
The scheme of the above provisions apparently is that the
operator of a stage carriage has to submit a return in
accordance with S. 5 and pay tax into the Government
treasury every month as provided by S. 6. No question can
arise of any assessment order being made under S. 7 by the
Tax Officer where the returns are found to be correct and
complete. It is only where either no returns have been
submitted or where the return submitted appear to the Tax
Officer to be incorrect or incomplete that the Tax Officer
has to follow the procedure laid down in s. 7 and determine
the tax payable by the operator. The High Court was of the
view that even where returns had been filed and accepted as
correct the Tax Officer has to pass a proper assessment
order holding the operator liable for payment of tax in
accordance with the return submitted by him. In other words
no notice of demand can be issued until the Tax Officer
makes such an order quantifying the amount of tax.
We are unable to accede to the contention which prevailed’
with the High Court that even where returns had been submit-
ted but the tax has not been paid the Tax Officer is bound
to, make an order before serving a notice of demand even
though the demand is strictly in accordance with the returns
which have been submitted. Section 7 rules out any such
course to be followed by the Tax Officer. It is only when
the returns have not been submitted or when return submitted
are found to be incorrect and incomplete that the Tax
Officer has to make an inquiry, and determine the sum
payable by the operator by way of tax. Similarly if there
has been escapement of tax proceedings have, to be taken
under S. 8 and an order has to be made after an enquiry.
The position would be same if penalty is sought to be
levied, under S. 9. But where returns have been accepted as
correct nothing more need be done except to recover the tax
due which has not been paid and no asessment order need be
passed in view of the express language of S. 7.
987
We are satisfied that in the two appeals, i.e., C. As. 1449
and 1453/67 in which returns had been filed the Tax Officer
was not bound to make any order quantifying the amount of
tax before issuing the notice of demand. The amount sought
to be realized was quantified in the returns themselves vide
Form IV read with Rule 4(2)(c) of the M. P. Motor Vehicles
(Taxation of Passengers) Rules. It has not been shown that
any penalty was sought to be imposed in those two cases.
The order of the High Court, therefore, in these appeals
cannot be sustained and is hereby set aside and the writ
petitions are ordered to be dismissed.
As regards C. As. Nos. 1450, 1451, 1452 and 1454/67, it
appears, as has been stated earlier, that some proceedings
were held of the nature contemplated by S. 7 and the notices
of demand were issued after orders had been duly made by the
Tax Officer. But this is a matter which was not examined in
each case by the High Court and we would like to express no
opinion with regard to it. These appeals are also allowed
and the orders of the High Court are set aside. The High
Court will rehear and redecide the same in accordance with
law. There will be no order as to costs in all. the
appeals.
K. B. N, Appeals
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allowed.
988