Full Judgment Text
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PETITIONER:
STATE OFGUJ’ARAT & ORS.
Vs.
RESPONDENT:
KAUSHIKBHAI K. PATEL & ANR.
DATE OF JUDGMENT: 09/05/2000
BENCH:
P. Bharucha, Shivaraj V.Patil
JUDGMENT:
May 09,2000.L.....I.........T.......T.......T.......T.......T.......T..J
JUDGMENT
SHIVARAJ V. PATIL, J.
In this appeal the judgment and order dated 23.4.1998
made by the High Court of Gujarat at Ahmedabad in Special
Civil Application No. 10356 of 1996 are impugned. The
Respondents herein filed the said Special Civil Application
in the High Court for setting aside the notice dated
29.3.1996 demanding payment of composite tax and penalty and
for declaration that Section 3-A(5) of the Bombay Motor
Vehicles Tax Act, 1958 as amended by the Bombay Motor
Vehicles
Tax (Glljarat Amendment) Act. 1992. is ultra vires
being violative of Articles 14 and 19 of the Constitution of
India.
2. The Respondent No. I is the owner of omnibus
bearing registration No. GRQ 8403. The said vehicle had
not been used or kept for use during the period from
1.7.1995 to 31.3.1996. He intimated the non-user of the
said omnibus to the Motor Vehicle Inspector. He claimed
refund of the tax for the said period. His claim for refund
was not allowed on the ground that the omnibus had been kept
in non-use for a period exceeding three months and he failed
to satisfy that such non-use was for the reasons, beyond his
control. Consequently, the appellant issued demand notice
dated 29.3.1996 demanding payment of composite tax of Rs.
14,000/- and penalty of Rs. 3,500/- from the Respondent No.
I. Under these circumstances, the Respondents filed the
aforementioned Special Civil Application.
3. Section 3 of Bombay Motor Vehicles Tax Act, 1958
(for short the "Act") authorises levy and collection of tax
on motor vehicles used or kept for use in the State. As per
sub-section 2 of Section 3, a motor vehicle shall be deemed
to have been used or kept for use in
the State during the currency of certificale of
registration except during the period for which the taxation
authority has certified that the vehicle was not used or
kept for use. Section 3-A of the Act provides for levy of
tax on omnibuses which are used or kept for use in the State
as contract carriages. The Act was amended by Gujarat State
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by the Bombay Motor Vehicles Tax (Gujarat Amendment) Act.
1992. Sub-section 5 of Section 3-A was substituted. The
said substituted sub-section 5 of Section 3-A to the extent
it is relevant reads as follows:-
"5(a) Where the registered owner or any person having
possession or control of a designated omnibus who has paid
tax under this section proves to the satisfaction of the
taxation authority that the designated omnibus in respect of
which a tax has been paid has not been used or kept for use
for a continuous period of not less than one month, he shall
be entitled to the refund of an amount equal to 1/12th of
the annual rate of tax paid in respect of such omnibus for
each complete month of the period for which the tax has been
paid so however that, except as otherwise provided inclause
(b) the total amount of a refund in a year shall not exceed
-
(b) Where a registered, owner or a person having
possession or control of a designated omnibus who has paid
tax under this section proves to the satisfaction of the
State Government or such officer not below the rank of the
Director of Transport, Gujarat State, as may be notification
in the Official Gazette be authorised in this behalf by the
State Government that the
designated omnibus in respect of which the tax has
been paid has/or reason’s beyond the control of such owner
or person not been used or kept for the use for a continuous
period of not less one month but exceeding three months in a
year, he shall be entitled to the refund of an amount equal
1/12th of the annual rate of the tax paid in respect of such
omnibus for each complete month of the period of which the
tax has been paid.
(Emphasis supplied)
4. As per this amended Section, a registered owner or
a person having possession or control of the designated
omnibus could claim refund of tax already paid upto a period
of three months for non-user of vehicle on proof to the
satisfaction of the taxation authority that the designated
omnibus in respect of which the tax has been paid has not
been used or keptforuse for acontinuous period of not less
than one month. In case the claim for refund exceeded three
months, the owner or person in possession or control of the
omnibus has to satisfy the State Government or the
authorised officer that such non-use of vehicle was for the
reasons beyond his control. Hence the controversy was
raised as to whether satisfaction as to the reasons beyond
the control of the owner or in possession or control of the
omnibus was justified and tenable when the refund was
claimed on the basis of non-user of the vehicle for a period
exceeding three
months within one year.
5. The High Court referred to and relied on the
pronouncements of this Court and held that under the Act the
tax imposed is regulator and compensator in nature for the
purpose of raising revenue to meet the expenditure for
making the roads, maintaining them and for regulation of
traffic. The Act does not provide for levy and collection
of tax on vehicles which do not use, or are kept for use of
the public roads in the State. The High Court also noticed
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that other measures and provisions are already available to
check the evasion of tax. The High Court concluded that
insistence to satify the State Government or authorised
officer as to the reasons beyond the control of the
registered owner or the person in possession for non- use of
the vehicle was beyond tile legislative competence of the
Slats. In this view, the words "for reasons beyond the
control of such owner or person" occurring in clause (by of
sub-section 5 of Section 3-A of the Act were struck down.
6. The learned senior counsel for the appellants
urged that the condition imposed in sub-section 5(b) of
Section 3-A of the Act was not to impose tax on those
vehicles which arc not running on the roads
for a period beyond three months but it was only to
check evasion o.r fax and to see that the refand is granted
only in genuine cases; for the initial period of three
months of non-use of vehicle in a financial year. refund of
tax is available on proof of non-use of the vehicle without
insisting for the reasons beyond the control of the
registered owner or a person in possession of a vehicle. He
pointed out to the inquiry report of the Inspector of Motor
Vehicles dated 2L10.1995 (Annexure P-4) and submitted that
the vehicle did not require any repair and as such the
reason given by the owner for non-user of the vehicle could
not be accepted. He also contended that ordinarily owners
having purchased the omnibus investing several lakhs of
rupees cannot keep vehicles off the road or put to non-use
for a period more than three months; hence requiring
satisfaction of the State Govt. or authorised officer as to
reasons beyond the control for non-use of a vehicle is
sustainable and justified particularly when such an
amendment was made with a view to prevent evasion of tax.
7. Per contra, the learned senior counsel for the
respondents while supporting the judgment and order under
challenge drew our attention to the Form NT (Annexure P/3).
He submitted as per the form place
where the vehicle was kept for non-use was shown and a
declaration was also made that he would not remove the said
vehicle from the place mentioned in the Form without the
previous permission of the taxation authority and that the
certificate of taxation in respect of the said vehicle was
also surrendered. This apart the authorities have got
powers to detect the use of the vehicle on the road which
otherwise was shown as in non-use and to impose penalty or
to prosecute for the contravention as the case may be.
8. We have considered submissions of the learned
counsel for the parties. The facts that are not in dispute
are; the Respondent No. I filed Form NT declaring non-use
of the vehicle in question for ths period 1.7.95 to 31.3.96;
the report submitted by the motor vehicle Inspector
regarding non-user of the vehicle for three months from I ^
July, 1995 to 30^ September, 1995 was accepted and refund of
tax was ordered. For the remaining period refund was not
granted as the Director of Transports was not satisfied of
the non-user of the vehicle for reasons beyond the control
of the respondents. It is well- settled in law that the tax
imposed on vehicle under the Act is compensatory in nature
for the purpose of raising revenue to meet the
expenditure for making and maintaining the roads and
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regulation of traffic. To put it differently, the taxes are
levied on the vehicies using tfac roads or in any way
forming the partofthe flow of traffic on the
roads which is required to be regulated and not on the
vehicles which
< do not use the roads at all. What is material and
relevant is use of
road by vehicles for levy of tax under the Act. The
reasons tor non- use of roads is immaterial and irrelevant
when the nature of the tax itself is compensatory for use of
roads. Jt follows from sub-section (2) Section 3 of the Act
that where a motor vehicle is not using the roads no tax is
levied thereon. If any tax has been paid in relation to
such vehicle then the fax for the period during which it was
not put on the road is refundable. In order to avoid
evasion of tax the State can compel the owner to pay tax in
advance. In fact sub-section 5(a)&(b) of Section 3-A speak
of refund of tax that had been collected earlier.
9. Ln the Statement of Objects and Reasons appended
to the amending Act 3 of 1992, it is stated: "Having regard
to the commercial use of omnibuses exclusively used as
contract carriages in normal circumstances, it is generally
uneconomic for the registered.
owners of such omnibuses to put such omnibuses to
non-use fr-r a very long time. Cases have come to the
notice of the Government indicating that many a time such
omnibuses which purported to have been put to non-use were
operated clandestinely resuiting in evasion of the tax and
consequent loss of revenue to the Government. In order,
therefore to prevent evasion of tax, it was considered
necessary to make a provision to restrict the refund of the
tax to a total period of three months of non-use in a
financial year, in normal circumstances. However; in order
to meet with the genuine cases where such an omnibus may
have to be put to non-use for a pcri,od exceeding three
months on account of reasons beyond the control of the
registered owner, provision is made .for refund of tax for
non-use of the omnibus for a period exceeding three months"
Otherwise also various provisions and safeguards are
available in the Act. The authorities have enough powers to
check evasion of tax even without
insisting for the reasons beyond the control of
registered owner or person as to tlie reasons for non-use.
A registered owner or the person in possession in addition
to filing of Form NT, can be directed to surrender the
registration certificate, fitness certificate etc. for the
period of non-use. If the vehicles are clandestinely put to
use
without the certificate of registration., fitness
certificate or taxation certificate, it is open to the
authorities to take action against the owner in accordance
with law. Mere apprehension of clandestine use of a vehicle
cannot be a ground for imposing tax on omnibuses which are
not put on road or kept away from use. In form NT (Annexure
P-4) a declaration is made as to the place where the vehicle
is kept for non-use and further declaration is made that the
owner shall not remove the said vehicle from the said place
without the previous permission of the taxation authority.
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In the said Form it is also stated that the certificate of
taxation in respect of the said vehicle is also surrendered.
Motor Vehicle Inspectors could also check and verily about
the availability of the vehicle in place of "non-use". Any
clandestine operation or the absence of vehicle from the
declared place of non-use whenever and wherever detected
attracts heavy penalty to the extent of 25% of the tax due
and for repetition of such contraventions the amount of
penalty is coercively increased. Further claim for refund
of tax for the period of non-use of vehicleis allowed only
if the owner or any person having possession or control of a
designated omnibus proves to the satisfaction of the
tfiXation authorify that the bus in respect of which
the fax has been paid has not been used or kept tor
use for a particulai period. If the authorities are not
.satisfied as to the non-use of vehicle it is open to them
to deny claim for refund. There is sufficient authority and
machinery to the appellants to prevent evasion of tax in
this regard. Lookng to the Statement of Objects and Reasons
tor the amendment, it appears that the appellants do not
trust the owners of omnibuses or their own officers and
machinery. Mere apprehension of the appellants that
omnibuses will be clandestinely operated and claim would be
made for refund on the ground of their non-use, in our
opinion, cannot justify for the insistence of satisfaction
as to the reasons beyond the control of the owner or person
for non-use of a omnibus. This apart, there is no good
reason put forward as to why the omnibuses are singled out.
Even heavy goods transport vehicles are also purchased by
investing heavy amount. In other words, the condition that
for a period of non-use beyond three months, the owner or a
person in possession or control of vehicle should satisfy
the reasons beyond the control for non-use of vehicle is
attached to omnibuses and not to other vehicles. If the
appellants see any lifficulty in working of their officers
in the matter of checking vasion of tax. that itself is not
a good ground to uphold the validity
of the condition that an owner or possessor of a
vehicle should satisfy as to die non-use of omnibus for the
reasons beyond his control in order to claim refund of tax
for a period exceeding three months.
Thus. having regard to aJI aspects, we do not find
any good or valid reason to interfere with the judgment and
order under appeal. Consequently we dismiss it with costs.