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DEVENDRA KUMAR GUPTA AND OTHERS versus STATE OF U.P. & OTHERS

High Court of Judicature at Allahabad

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Devendra Kumar Gupta And Others v. State Of U.P. & Others - WRIT TAX No. 532 of 2001 [2006] RD-AH 14463 (28 August 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Reserved

Civil Misc. Writ Petition No.532 of 2001

Devendra Kumar Gupta and others v.

State of U.P. and others

alongwith

Civil Misc. Writ Petition Nos.1157, 1158, 1211, 1250, 1279 of 2000; 10, 18, 19, 28, 49, 56, 57, 62, 65, 68, 69, 78, 79, 80, 81, 83, 84, 85, 92, 93, 94, 96, 98, 100, 104, 113, 114, 120, 126, 142, 151, 154, 192, 208, 229, 255, 258, 296, 313, 335, 374, 420, 427, 428, 429, 445, 456, 458, 482, 536, 577, 630, 661, 728, 952, 1193, 1249, of 2001 and 183 and 473 of 2002

Hon'ble R.K.Agrawal, J.

Hon'ble Vikram Nath, J.

(Delivered by R.K.Agrawal, J.)

In this batch of petitions filed under Article 226 of the Constitution of India, the petitioners have questioned the vires of Article II of PART "D" of the FIRST SCHEDULE of the U.P.Motor Vehicles Taxation Act, 1997 (hereinafter referred to as "the Taxation Act"). They have also sought quashing of the order dated 30.10.2000 passed by the Transport Commissioner, U.P., Lucknow, respondent no.2, and a direction in the nature of mandamus commanding the respondents to abide by the decision dated 20.4.1999.

It may be mentioned here that, in the meeting held on 20.4.1999, a decision was taken by the Transport Commissioner not to realise the additional tax at the rate of Rs.45/- per metric ton as provided in Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act. Vide order dated 30.10.2000, the Transport Commissioner had informed all his subordinate authorities that the aforesaid decision has since been revoked and tax in accordance with law be realised.

As in all the writ petitions similar issues have been raised, they have been heard together and are being decided by a common judgment.

For convenience, we treat Civil Misc. Writ Petition No.532 of 2001 as the leading writ petition and are giving its facts.

According to the petitioners, they are stage carriage operators. They own buses and operate them on the strength of the permanent stage carriage permits granted in their favour by the Regional Transport Authority. Prior to the commencement of the Taxation Act, taxes from transport operators were realised under the provision of different enactments, namely road tax was imposed under the provisions of the U.P.Motor Vehicles Taxation Act, 1935; tax on passenger was imposed by the U.P.Motor Gadi (Yatri Kar) Adhiniyam, 1962 and the goods tax was being realised from the public carrier under the provisions of the U.P. Motor Gadi (Mal Kar) Adhiniyam, 1963. The Taxation Act has replaced the aforementioned three Acts. It came into force on 9.11.1998. According to the petitioners, they have paid road tax under Section 4 of the U.P. Motor Vehicles Taxation Act, 1935 which has now been replaced by Section 4 of the Taxation Act. The petitioners have paid tax at the rate of Rs.2,015/- per quarter inclusive of Rs.45/- for the luggage of the passengers in respect of 55 seater vehicles. With the coming into force of the Taxation Act, the transport authorities started demanding additional tax at the rate of Rs.45/- for every metric ton of the gross vehicles weight of the vehicle or part thereof in terms of Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act. The petitioners and other transport operators of the State protested whereupon a decision was taken by the Transport Commissioner on 20.4.1999 and a direction was issued to the subordinate authorities in the State of U.P. to obtain affidavit from the stage carriage operators to the effect that they do not carry any goods in their vehicle except the personal luggage of the passenger and on filing such affidavit, the tax demanded under the new provision shall not be realised from them. It has been stated by the petitioners that the demand of tax under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act was challenged by some of the operators before the Lucknow Bench of this Court in which the Court had directed the operators to represent their case before the State Government for appropriate decision. It is not clear as to what decision has been taken by the State Government on the representation, if any, made by the transport operators. However, on 30.10.2000, the Transport Commissioner, U.P., Lucknow, respondent no.2, had informed that a decision has been taken to revoke the earlier decision dated 20.4.1999 and to realise the tax as per law. The order dated 30.10.2000 is under challenge in the present writ petition.

We have heard Sri Navin Sinha, learned senior counsel, assisted by Sri H.P.Dubey, Sri C.P.Ghildyal , Sri S.N.Jaiswal, Sri A.D.Saunders, Sri A.K.Dubey and Sri A.K.Singh, Advocates, on behalf of the petitioners, and Sri S.P.Kesarwani, learned Standing Counsel, on behalf of the respondents.  

At the outset, we may mention here that even though in the petition the petitioners have challenged the vires of Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act, yet during the hearing of the petition, the petitioners have confined their plea relating to the applicability of the said provision alone.

Sri Sinha who led the arguments, submitted that, under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act, additional tax at the rate of Rs.45/- per metric ton of the gross vehicle weight of the vehicle or part thereof is payable only in case where the vehicle plying for hire/transport limited quantity of passenger goods. According to him, "goods" have not been defined under the Taxation Act and, therefore, in view of the specific provision of sub-section (o) of Section 2 of the Taxation Act, recourse to the definition given in the Motor Vehicles Act, 1988 (hereinafter referred to as "the Act") has to be taken. Under the said Act, "goods" have been defined under sub-section (13) of Section 2 of the Act, as not including the personal luggage of the passenger travelling in the vehicle. He further submitted that none of the petitioners are carrying any goods of the passenger except the personal luggage and, therefore, the provisions of Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act are not attracted. He referred to the definition given to the words "additional tax" in sub-section (a), "goods carriage" in sub-section (d), "limited quantity of load" in sub-section (e), and "tax" in sub-section (l) of Section 2 of the Taxation Act and "goods" as given in sub-section (13) of Section 2 of the Act and submitted that from the reading thereof, it is absolutely clear that the additional tax under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act is applicable only where the petitioners carry the goods of the passenger other than the personal luggage. He also invited the attention of the Court to the provisions of Section 72 of the Act and submitted that the stage carriage permit granted by the Regional Transport Authority stipulates conditions in terms of Clauses (vii), (viii) and (ix) regarding the maximum number of passenger and the maximum weight of the luggage free of charge and the rate of charge that may be levied for the passenger's luggage in excess of free allowance, which goes to show that the additional tax under the aforesaid provision of the Taxation Act can be levied only where the passenger's luggage, in excess of free allowance, is transported or carried.

Sri A.K.Singh and Sri C.P.Ghildyal, Advocates, while adopting the arguments of Sri Sinha, have submitted that sub-rule (v)(a) of Rule 68 of the U.P.Motor Vehicles Rules, 1998 (hereinafter referred to as "the Rules") provides for the permits issued for stage carriages to contain special conditions relating to weight of the passengers' luggage which can be carried free of charge and which are to be charged separately. According to him, as the petitioners are not carrying any other goods of the passenger except their luggage, and are, therefore, not liable to pay tax under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act. They further submitted that, under Rule 78 of the Rules, conditions have been prescribed for carriage of goods in a stage or contract carriage. Referring to sub-rule (viii) of Rule 78 of the Rules, they further submitted that there is a prohibition from carrying any goods in excess of the gross vehicle weight of the vehicle after taking into consideration the unladen weight of the vehicle, the weight of passengers calculated in kilograms multiplying the number of passengers plus two, i.e., Driver and Conductor, which the vehicle is permitted to carry, by 59. According to them, there is no scope for carrying any passenger's goods nor, in fact, they have carried in their stage carriage and, therefore, they are not liable to pay any tax under the aforesaid Article.

Sri S.P.Kesarwani, learned Standing Counsel, on the other hand, submitted that under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act, additional tax at the rate of Rs.45/- per metric ton of the gross vehicle weight of the vehicle or part thereof is payable where vehicle is plying for hire and for the conveyance of limited number of passenger and the transport of a limited quantity of passenger goods. The gross vehicle weight has not been defined under the Taxation Act. However, under sub-section (15) of Section 2 of the Act the words "gross vehicle weight" has been defined to mean in respect of any vehicle the total weight of the vehicle and the load certified and registered by the registering authority as permissible for that vehicle. According to him, Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act would come into play where the vehicles which are plying for hire, transport limited number of passengers and also transport limited quantity of passenger goods. It is immaterial whether the passenger goods are the personal luggage of the passenger or not. He, thus, submitted that as the stage carriage of each of the petitioners carry passengers and transport goods for hire, the additional tax has rightly been levied and being demanded. He further submitted that this Court in Civil Misc. Writ Petition No.1161 of 2001, Zahid Maqsood and others v. State of U.P. and others, which involved similar question, has been pleased to dismiss the writ petition vide judgment and order dated 5.1.2006 by following the decision of the Apex Court in the case of Jai Prakash and others v. State of U.P. and others, (Civil Appeal No.3686 of 2003), decided on 14.9.2004, since reported in (2004) 13 SCC 390.

In reply, Sri Sinha submitted that even though this Court has been pleased to dismiss the writ petition involving similar controversy filed by Zahid Maqsood and others, it has not given any reasons but has simply followed the decision of the Apex Court in the case of Jai Prakash (supra) in which the controversy was entirely different and the circular/order dated 30.10.2000 issued by the Transport Commissioner was not under challenge. He, thus, submitted that the decision of this Court in the case of Zahid Maqsood cannot be treated as a precedent and has no binding effect on the present case.

We have given our anxious consideration to the various pleas raised by learned counsel for the parties.

For adjudication of the issues involved herein, it is apt to reproduce below the relevant provisions of the various enactments:-

Motor Vehicles Act, 1988 :

2. Definitions. - In this Act, unless the context otherwise requires, -

.... .... ....

(13) "goods" includes livestock, and anything (other than equipment ordinarily used with the vehicle) carried by a vehicle except living persons, but does not include luggage or personal effects carried in a motor car or in a trailer attached to a motor car or the personal luggage of passengers travelling in the vehicle;

.... .... ....

(15)"gross vehicle weight" means in respect of any vehicle the total weight of the vehicle and load certified and registered by the registering authority as permissible for that vehicle;"

72. Grant of stage carriage permits. -

.... .... ....

(2) The Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit for a stage carriage of a specified description and may, subject to any rules that may be made under this Act, attach to the permit any one or more of the following conditions, namely -

.... .... ....

(vii) the maximum number of passengers and the maximum weight of luggage that may be carried on the stage carriage, either generally or on specified occasions or at specified times and seasons;

(viii) the weight and nature of passengers' luggage that shall be carried free of charge, the total weight of luggage that may be carried in relation to each passenger, and the arrangements that shall be made for the carriage of luggage without causing inconvenience to passengers;

(ix) the rate of charge that may be levied for passengers' luggage in excess of the free allowance;"

U.P.Motor Vehicles Taxation Act, 1997 :

2. Definitions. - In this Act, -

(a) "additional tax" means a tax imposed under Section 5 or Section 6 in addition to the tax imposed under Section 4;

.... .... ....

(d) "goods carriage" means any motor vehicle constructed or adapted wholly or partly for use for the carriage of goods, or any motor vehicles not so constructed or adapted when used for the carriage of goods either solely or in addition to passengers, and includes a trailor but does not include a motor cab, or a maxi cab or a contract carriage or stage carriage where such contract carriage or stage carriage is authorized to carry a limited quantity of load;

(e) "limited quantity of load" means such quantity of load, not exceeding the limits determined by the Transport Commissioner, Uttar Pradesh, as the Registering Authority may specify in the registration certificate in respect of a vehicle.

.... .... ....

(l) "tax" means any tax levied under section 4;

.... .... ....

(o) words and expressions used but not defined in this Act and defined in the Motor Vehicles Act, 1988, shall have the respective meaning assigned to them in that Act;"

4. Imposition of tax -

(1) Save as otherwise provided in this Act or the rules made thereunder, no motor vehicle other than a transport vehicle, shall be used in any public place in Uttar Pradesh unless a one-time tax at the rate applicable in respect of such motor vehicle, as specified in Part 'B' of the First Schedule has been paid in respect thereof;

Provided that in respect of an old motor vehicle, instead of a one-time tax, annual tax at the rate applicable to such motor vehicle as specified in Part 'C' of the First Schedule may be paid.

(2) Save as otherwise provided by or under this Act no transport vehicle shall be used in any public place in Uttar Pradesh unless a tax at the rate applicable to such motor vehicle, as specified in Part 'D' of the First Schedule has been paid in respect thereof.

(3) Where any motor vehicle other than a transport vehicle, in respect whereof one-time tax has been paid, is operated as a transport vehicle, the tax payable under this Act on such transport vehicle shall be payable.

6. Additional tax on public service vehicle -

(1) Save as otherwise provided in this Act or the rules made thereunder, no public service vehicle, other than those owned or controlled by the State Transport Undertaking shall be operated in any public place in Uttar Pradesh unless there has been paid in respect thereof, in addition to the tax payable under Section 4, an additional tax at the rate applicable to such public service vehicle

specified in the Fourth Schedule:

Provided that the State Government may, by notification, increase by not more than fifty per cent, the rates of additional tax specified in the said Schedule.

(2) The additional tax in respect of a public service vehicle owned or controlled by a State Transport undertaking shall be levied and paid in accordance with the formula specified in the Fifth Schedule.

(3) Where a public service vehicle is wholly or partially exempted from the payment of additional tax by or under this Act a surcharge for the purpose of the fund established under section 8 shall be levied on its operator at the rate of five per cent of the additional tax that would have been payable on such vehicle had it not been so exempted and such amount shall be credited to the said Fund."

FIRST SCHEDULE

(See Section 4)

PART "D"

Rates of Tax on Transport Vehicles under Sub-section (2) of Section 4

Article Description of Vehicles Rate of Tax per Quarter  Rs. P.

II Vehicles plying for hire for the conveyance of limited number of passengers and the transport of a limited quantity of passengers' goods, the tax payable under Article I in respect of the authorized number of passenger seats in addition to tax for every metric ton of the (gross vehicle weight) of the vehicle, or part thereof. 45.00

U.P.Motor Vehicles Rules, 1998 :

68. Permits for stage carriages : Special conditions of. -

The Transport Authority may also attach to a stage carriage permit one or more of the following conditions -

.... .... ....

(v)(a) that luggage of passengers up to 20 Kilograms per passenger shall be carried free of charge in a stage carriage in all the regions except Kumaon and Garhwal regions where it shall be 25 kilograms;

(b) that the following shall be treated as passenger's luggage and will be carried free of charge on the roof of the stage carriage-Hand harmonium in box, non-folding charkha, pet birds in small cage (they could be carried inside the bus if no inconvenience is caused to the passengers) hand sewing-machine, gramophone, portable typewriter, radio (properly packed unless it can be carried under the seat) dry 6-volt battery;

(c) that the following will be charged separately as for 18 kilograms - children's trycycles, folding campcot, folding table or folding chair not weighing more than 18 kilograms;

(d) the following will be charged separately as for 37 kilograms - bicycles, non-folding chairs, tea tables, small almirahs or racks, beds, etc. which can be conveniently carried on the bus and which do not weigh more than 37 kilograms;

(e) that no charge will be made for the following articles provided they can be carried under the seat occupied by the passenger to whom the articles belong - folding charkha, ghee in a closed tin, thermos flask, small tiffin carrier or small tiffin case, sticks and umbrellas, china tea-set, a set of six tumblers and glass jug, small attache case, book, fruits, or articles of food, table fan packed) and typewriter (standard, packed); provided that one passenger may carry only one such bundle under his seat."

78. Stage and contract carriages: Conditions for carriage of goods in - Goods may be carried on stage and contract carriages, subject to the conditions:

.... .... ....

(viii) No goods shall be carried in a stage or contract carriage, the weight of which together with the weight of personal luggage of the passenger carried on the vehicle exceeds the difference between the gross vehicle weight minus unladen weight of the vehicle and the weight of passengers calculated in kilograms multiplying the number of passengers plus two (Driver and Conductor) which the vehicle is permitted to carry by 59."

From the perusal of the definition of the words "goods carriage", as given in sub-section (d) of Section 2 of the Taxation Act, we find that a contract or stage carriage where such contract or stage carriage is authorised to carry a limited quantity of load has been excluded from the meaning of the words "goods carriage" for the purposes of the Taxation Act. The words "limited quantity of load" have been defined in sub-section (e) of Section 2 of the Taxation Act to mean such quantity of load, which has been specified by the Registering Authority in the registration certificate of the vehicle, which shall not exceed the limit determined by the Transport Commissioner, Uttar Pradesh, Lucknow. "Tax" has been defined to mean any tax levied under Section 4 of the Taxation Act as per sub-section (l) of Section 2 of the Taxation Act. The word "goods" has not been defined under the Taxation Act. It has, however, been defined in sub-section (13) of section 2 of the Act. It does not include the personal luggage of the passenger travelling in the vehicle. Thus, personal luggage of the passenger travelling in the vehicle cannot be treated as goods. Sub-section (15) of Section 2 of the Act defines "gross vehicle weight" to mean the total weight of the vehicle and the load certified and registered by the registering authority as permissible for that vehicle. The words "gross vehicle weight" has not been defined under the Taxation Act and, therefore, in view of sub-section (o) of Section 2 of the Taxation Act, the meaning of "gross vehicle weight", for the purposes of the Taxation Act, has to be treated from the Act itself. Section 72 of the Act provides for grant of stage carriage permits. Sub-section (2) thereof authorises the Regional Transport Authority to attach any one or more of the following conditions mentioned therein while granting the permits. Clause (vii) of sub-section (2) prescribes the maximum number of passengers and the maximum weight of luggage that may be carried on the stage carriage. Clause (viii) prescribes the weight and nature of passengers' luggage that can be carried free of charge, the total weight of luggage that can be carried by each passenger and clause (ix) prescribes the rate of charge that may be levied for passengers' luggage in excess of the free allowance. Rule 68 of the Rules which has been framed by the State Government, also provides for special conditions to be observed by the stage carriage permit holders. Clause (a) of sub-rule (v) of Rule 68 of the Rules provides for carrying of 20 Kilograms of luggage per passenger free of charge. Clause (b) of sub-rule (v) of Rule 68 of the Rules, however, treats certain other items as passenger's luggage to be carried free of charge. Clauses (c) and (d) of sub-rule (v) of Rule 68 of the Rules specify certain items to be charged separately. Clause (e) of sub-rule (v) of Rule 68 of the Rules specifies certain items to be carried free of charge. However, they can be carried under the seat occupied by the passenger. Rule 78 of the Rules provides for conditions for carriage of goods in stage and contract carriages. Clause (viii) of Rule 78 of the Rules prohibits the carrying of goods in a stage or contract carriages in excess of the weight of personal luggage of the passenger, the weight of passengers calculated in kilograms and the unladen weight of the vehicle. The weight of the passenger have to be calculated by the number of passengers plus two (Driver and Conductor) multiplied by 59.

From a reading of the aforesaid provisions, it is absolutely clear that in a vehicle which is covered by the stage carriage permits, luggage of the passenger as also goods are permitted to be carried. The only restriction is that the weight of the goods, passenger's luggage and that of the passenger including the weight of unladen vehicle should not exceed the gross vehicle weight.

Section 4 of the Taxation Act provides for imposition of tax. Under sub-section (1), there is a prohibition that no motor vehicle other than a transport vehicle, shall be used in any public place in Uttar Pradesh unless one-time tax at the rate applicable in respect of such motor vehicle, as specified in Part 'B' of the FIRST SCHEDULE, has been paid. Under sub-section (2) of Section 4 of the Taxation Act, a prohibition has been placed upon the use of any transport vehicle in any public places in Uttar Pradesh unless the tax at the rate applicable to such motor vehicle, as specified in PART "D" of the FIRST SCHEDULE of the Taxation Act has been paid in respect thereof. Under sub-section (1) of Section 6 of the Taxation Act, a prohibition has been placed upon the public service vehicle from being operated in any public place in Uttar Pradesh unless in addition to the tax payable under Section 4 additional tax at the rate applicable to such public service vehicle specified in the FOURTH SCHEDULE has been paid.

PART "A" of the FIRST SCHEDULE, which is referable to Section 4 of the Taxation Act, has classified the vehicles other than transport vehicle with reference to which the rates have been specified in PART "B" and "C" of the FIRST SCHEDULE and PART "A" and "B" of the SECOND SCHEDULE. PART "B" of the FIRST SCHEDULE prescribes the rates of one time tax on vehicles under sub-section (1) of Section 4 of the Taxation Act. It provides for levy of one time tax in respect of the year of registration of the vehicles and the weight. PART "C" provides for the rate of tax other than one time tax applicable under the proviso to sub-section (1) of Section 4 of the Taxation Act. PARTS "A", "B" and "C" of the FIRST SCHEDULE are not applicable to the transport vehicles which is subject to tax under sub-section (2) of Section 4 of the Taxation Act. PART "D" has made provision for the rate of tax on transport vehicle under sub-section (2) of Section 4 of the Taxation Act. Article I provides for levy of tax on vehicles plying for the conveyance of the passenger and also personal luggage of the passenger. It provides for varied amount of tax for vehicles having different seating capacity as also plying on A class or B class route. Article II provides for levy of tax, in addition to the tax payable under Article I, on the vehicle plying for hire or for the conveyance of limited number of passenger and the transport of a limited quantity of passengers' goods, which has to be calculated at the rate of Rs.45/- per metric ton on the gross vehicle weight of the vehicle or part thereof. Article III provides for levy of tax for vehicles plying for transport of goods only excluding trailers attached to tractors which trailers are used solely for agricultural purposes. The quantum of tax to be calculated per metric ton of the gross vehicle weight of the vehicle depending upon one region or more. Article IV provides for levy of tax on the tractor by which trailer is drawn and is used for the purposes other than agriculture purpose. The Explanation to PART "D" prescribes the maximum rate and computation of passenger seats where a motor vehicle is equipped with sleeping berth etc.

From a perusal of the aforesaid provisions, we find that the tax which is payable by a stage carriage permit holder for his transport vehicle under sub-section (2) of Section 4 of the Taxation Act is governed by PART "D" of the FIRST SCHEDULE. Under Article I of PART "D", tax is payable with reference to seating capacity and the road on which it is to be plied. However, under Article II, tax in addition to what has been paid under Article I, is payable, which is calculated on the basis of the gross vehicle weight, where the vehicle plies for the conveyance of limited number of passenger and transport of limited quantity of passenger goods. It is immaterial as to whether the vehicle transports the personal luggage of the passenger or not. If under the permit, it has been authorised to carry passenger goods which may also include the passenger luggage, even the owner of such vehicle is liable to be pay tax under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act.

In the case of State of Tamil Nadu v. M.Krishnappan and another, (2005) 4 SCC 53, the Apex Court has held that entry 57 of list-II of the seventh schedule to the Constitution refers to taxes on vehicles suitable for use on roads.  Under the said entry, a field is provided to the State Legislature to impose the impugned tax in respect of every aspect of a vehicle.  When the Constitution provides a field of legislation, it has to be read in the broadest possible terms.  When the State is empowered to levy taxes on goods, it is empowered to levy such taxes on every aspect of such goods.  Similarly, when the State is empowered to levy tax on the vehicle, it is empowered to levy tax on every aspect of the vehicle.  Throughout the Constitution, the legislative power relating to taxes and the legislative power relating to general subjects is treated separately and is not subsumed under a general head.  Applying the above tests, the Apex Court, in the aforesaid case, has held that the High Court had erred in holding that on account of introduction of "weight-cum-value" index in the third schedule to the Act, the impugned tax had ceased to be regulatory and compensatory and consequently, the said levy fell outside entry 57 list-II.

In the case of Mohan Das N. Hegde (dead) through L.Rs. v. State of Karnataka and another, ((2005) 4 SCC 64, the Apex Court has held that the above classification indicates a measure or a rate of tax applied differently on different vehicles depending upon various circumstances and so long as there is competence to levy and collect the tax under Entry 57 List-II of the seventh schedule to the Constitution, the levy cannot be struck down only on the ground that the incidence of the tax falls differently on different categories of the vehicles.  The burden has to be distributed on different classes of vehicles or on different persons who owned the vehicles.  How equitable such tax could fall on different persons is not for the Court to decide.

In the case of Natwar Parikh & Co. Ltd, v. State of Karnataka and others, (2005) 7 SCC 364, the Apex Court while dealing with the Karnataka Motor Vehicles Taxation Act, 1957, which contained similar provision, has held that on an examination of the provisions of the aforesaid Act it is apparent that the principle underlying therein is that it is the use of the motor vehicle on a given occasion which determines the category of the motor vehicle, whether it is adapted for that purpose or not.

In the case of State of Mysore v. Syed Ibrahim, AIR 1967 SC 1424, the Apex Court has held that the levy of tax under Section 3 of the Karnataka Motor Vehicles Taxation Act, 1957 on motor vehicles depended upon the use of the vehicle to which the vehicle was put and the tax was leviable on the basis of the actual or intended use or it is the use of the motor vehicle on the given occasion, which decided the category of the motor vehicle, whether it is adapted for that purpose or not.  

In the case of State of Karnataka v. K. Gopalakrishna Shenoy and another, AIR 1987 SC 1911, the Apex Court has held that section 3(1) of the Karnataka Motor Vehicles Taxation Act confers a right upon the State to levy a tax on all motor vehicles which are designed for use on the roads, at the rates prescribed, without reference to the road worthy conditions of the vehicle or otherwise.

In the case of Jai Prakash (supra) the Apex Court was considering the provisions of Section 4 and 6 of the Taxation Act. On an examination of the various provisions of the Taxation Act, the Apex Court has held that levy under the State Act is in respect of motor vehicles and the taxable event is the user of vehicle in any public place, the public place being the roads in the State of U.P.  It has further held that the tax levied under Section 4 or Section 6 is on the public service vehicle itself and is referable to Entry 57 of List II. It has further held that the mere fact that the basis of calculation of levy may be made in some cases with reference to the actual passenger carried, is no ground for holding that the nature of the tax is other than the tax on vehicle and it too well established to require authority in support of the conclusion that the measure of tax does not define the nature of the tax. The Apex Court has held that the State Government is legislatively competent to levy taxes in respect of vehicles which are suitable for use on road under Entry 57 of the List II of the Seventh Schedule of the Constitution of India.

In the case of State of Gujarat v. Askhil Gujarat Pravasi V.S. Mahamandal, (2004) 5 SCC 155, it has been held that the phrase "suitable for use on roads" meant a vehicle which are not actually being used but are kept for being used on road.

The Apex Court in the case of Jai Prakash (supra) has further held as follows:-

"Under Entry 57 of List II, the State Government is legislatively competent to levy taxes in respect of vehicles which are suitable for use on roads. The phrase "suitable for use on roads" has been authoritatively expounded in several decisions of this Court all of which have been considered and pronounced up recently by this Court in State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal, (2004) 5 SCC 155. In that case the Court was considering, inter alia, the validity of Sections 3 and 3-A of the Bombay Motor Vehicles Tax Act, 1958. In that case it was held that an enactment under Entry 57 List II may provide for a tax on vehicles which are not actually being used but are kept for being used on roads. The sections which were considered in that case provided for the levy and collection of tax on all motor vehicles used or kept for use in the State. There is no material difference with the statutory provisions being construed by us. Sections 4 and 6(1) both provide for the user of vehicles, although the word used in Section 6(1) is "operate". Sub-section (1-A) of Section 6 deals with those vehicles which are "kept for use". In these circumstances, finding a parity in the nature of the tax levied, we see no reason not to follow the reasoning of this Court in Akhil Gujarat Pravasi case(2004) 5 SCC 155 and to hold that the present Act is referable to Entry 57 of List II and not Entry 56."

The Apex Court has held that the scheme of the Act would show that the charge under Section 4 is common to all vehicles and tax can be levied under the Act on vehicles which are not actually plying.

Thus, it is well settled by numerous decisions of the Apex Court that the tax can be levied where the vehicle is plied or not but are kept for being used on roads. The tax is on the vehicles and not on passenger. The basis of calculation of the levy may be made in some cases with reference to the actual passenger carried and/or to the actual weight of the vehicle and/or to the value of the vehicle. It would not make the nature of tax other than tax on vehicle.

Applying the aforesaid principles to the facts of in the present case, we find that admittedly under clauses (vii), (viii) and (ix) of sub-section (2) of Section 72 of the Act in the stage carriage permits issued by the Regional Transport Authority, the maximum number of passenger and the maximum weight of luggage that may be carried, is specified. The stage carriage permit holders are also entitled to charge the passenger for their luggage in excess of the free allowance. The maximum permissible weight and the nature of passenger luggage is also specified.

Sub-rule (v) of Rule 68 of the Rules has also provided for the special conditions to be attached to a stage carriage permit. It provides for the extent of free passenger luggage and goods to be charged in respect of different items. Sub-rule (viii) of Rule 78 of the Rules provides the maximum weight of the goods and the passenger including the unladen weight of the vehicle which can be carried in a stage carriage or contract carriage. The gross vehicle weight is the total weight of the vehicle and the load certified by the Registering Authority. Thus, it cannot be said that the stage carriage operators are not carrying passengers and transporting limited quantity of passengers' goods. Reliance placed by Sri Sinha on the definition of the word "goods", as given in sub-section (13) of Section 2 of the Act, to exclude the personal luggage of passenger in the context of the Taxation Act is wholly misplaced.

The opening part of Section 2 of the Act which gives the definition of various words used, begins with the phrase "In this Act, unless the context otherwise requires". The normal meaning given in the definition clause is to be applied while interpreting the said words used in various provisions of the Act. However, if in some provision, the said word has been used in some special setting, the definition given to that word may not be resorted to in view of the specific phrase used "unless the context otherwise requires".

In Principles of Statutory Interpretation, Ninth Edition, 2004 at page 174, the learned author Justice G.P.Singh has stated as follows:-

"But where the context makes the definition given in the interpretation clause inapplicable, a defined word when used in the body of the statute may have to be given a meaning different from that contained in the interpretation clause; all definitions given in an interpretation clause are therefore normally enacted subject to the qualification - ''unless there is anything repugnant in the subject or context', or  ''unless the context otherwise requires'."

In the case of The Vanguard Fire and General Insurance Co. Ltd., Madras v. M/s. Fraser and Ross and another, AIR 1960 SC 971, the Apex Court has held as follows:-

"It is well settled that all Statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or the context. That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case, namely, unless there is anything repugnant in the subject or context. Therefore in finding out the meaning of the word "insurer" in various sections of the Act, the meaning to be ordinarily given to it is that given in the definition clause. But this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context. In view of this qualification, the court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances."

The question before the Apex Court was as to construction of the word ''Insurer' as used in sections 33(1) and 2-D of the Insurance Act, 1938 which read as follows: Section 33(1): "The Central Government may at any time by order in writing direct the Controller or any other person specified in the order to investigate the affairs of any insurer and to report to the Central Government on any investigation made by him;' Section 2D: ''Every insurer shall be subject to all the provisions of this Act in relation to any class of insurance business so long as his liabilities in India in respect of business of that class remain unsatisfied and not otherwise provided for.' The Act by section 2(9) defines an ''Insurer' as a person carrying on the business of ''insurance', and the contention before the Supreme Court was that sections 33(1) and 2-D did not apply to an insurer who had closed his business completely as the definition of the word insurer in section 2(9) postulates actual carrying on the business. Rejecting the above contention the Court pointed out that in the context of sections 33(1) and 2-D and "taking into account the policy of the Act and the purposes for which the control envisaged by the Act was imposed on insurers", the word ''Insurer' in the said sections also refers to insurers who were carrying on the business of insurance but have closed it.

In the case of T.M. Kanniyan and others v. Income-tax Officer, Pondicherry and another, AIR 1968 SC 637, the Apex Court has held that as the context otherwise requires, the word ''State' in Article 246 does not include Union Territories even though the definition of the word ''State' in Section 3(58) of the General Clauses Act includes Union Territories.

Applying the aforesaid principles to the case in hand, we find that even though in the definition clause, given in sub-section (13) of Section 2 of the Act, personal luggage of a passenger travelling in a vehicle has not been included in the word "goods" but as Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act levies tax on gross vehicle weight of the vehicle which are plying for hire for conveyance of passenger and transport of a limited quantity of passengers' goods, the aforesaid definition would not be, in strict sense, applicable. The passengers' goods would, thus, also cover the luggage which they carry.

Article II is attracted where passengers' goods whether it is personal luggage of the passengers or not, is transported in the vehicle. Thus, the stage carriage permit holders are liable to pay tax under Article II of PART "D" of the FIRST SCHEDULE of the Taxation Act. We see no illegality in the order dated 30.10.2000 passed by the Transport Commissioner, U.P., Lucknow.

In view of the conclusion which we have arrived at, it is not necessary for us to go into the question as to whether this Court in the case of Zahid Maqsood (supra) had decided the issue in hand or not.

In view of the foregoing discussions, we do not find any merit in these petitions. They are dismissed with costs which we assess at Rs.5,000/- payable by each of the petitioners separately and individually.

28.8.2006

vkp


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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