2002 JTR(SC) 870
2002 AIR(SC) 3130 ; 2002 AIR(SCW) 3611 ; 2003 1 JCR(SC) 13 ; 2002 6 JT 481 ; 2002 4 MPHT 355 ; 2003 1 RLW(Raj) 88 ; 2002 6 Scale 222 ; 2002 7 SCC 245 ; 2002 Supp2 SCR 93 ; 2002 KHC 1857 ; 2002 6 Supreme 201
2002(6) Supreme 201
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
Syed Shah Mohammed Quadri & Mrs. Ruma Pal, JJ.
Mahakoshal Tourist, Napier Town & Ors. -Appellants
versus
State of Madhya Pradesh & Ors. -Respondents
Civil Appeal No. 5560 of 2002
(Arising out of SLP (C) No. 4771 of 1994)
With
Civil Appeal Nos. 5561, 5562-70 of 2002 @ SLP (C) Nos. 5034/94, 4516-4524/1995, W.P. (C) No. 281/1994, C.A.No. 2176/1993 and SLP (C) No. 6483/1995
Decided on 3-9-2002
Counsel for the Parties :
For the Appellant : M.L. Lahoty, P.K. Sharma, A.P. Dhamija, Sushil Kumar Jain, Ms. Pratibha Jain, Pramod Swarup (N/P) S.K. Mehta (N/P), Advocates.
For the Respondent : Sakesh Kumar, S.K. Agnihotri, Advocate Exparte.
IMPORTANT POINT
The fact of non-use has to be declared to the concerned authority to avoid tax liability under the Madhya Pradesh Motoryan Karadhan Adhiniyam.
Act
Referred
:CONSTITUTION OF INDIA : Art.265, Art.245, Art.246
MADHYA PRADESH MOTORYAN KARADHAN ADHINIYAM : S.8, S.3, S.14
MADHYA PRADESH MOTORYAN KARADHAN RULES : R.14, R.13, R.12
(A) The case involves the interpretation and application of the Madhya Pradesh Motor Vehicle Taxation Act, 1991 (Act 25 of 1991), as amended by Acts 26 of 1991 and 10 of 1993, read with the Madhya Pradesh Motor Vehicle Taxation Rules, 1991, in the context of vehicles plying on All-India Tourist Permits. Sections 3, 8, 14, and read with Rules 12, 13, and 14 of the M.P. Rules define the charging basis, assessment procedure, and refund mechanism, asserting that the State legislature competent under Entry 57 of List-II of the Constitution. The High Courts judgment is challenged on the ground of lack of assessment machinery for tourist permit vehicles and denial of refund, but the Act is held to provide adequate provisions for tax liability, assessment, and refund, subject to compliance with procedural requirements.
(B) Non-use of a vehicle within the State does not, by itself, absolve the operator from tax liability; the operator must declare non-use through the prescribed procedure to claim a refund. The expression 'used or kept for use' encompasses vehicles kept available for use, even when plying outside the State under contract. The burden is on the State to prove use, but the presumption is that a registered vehicle is used or kept for use, and relief is only available upon certified non-use or formal declaration.
Facts of the case:
Bus operators holding All-India Tourist permits challenged the Madhya Pradesh Motor Vehicle Taxation Act, 1991, before the High Court of Madhya Pradesh, alleging lack of assessment machinery and denial of tax refund for periods when vehicles were not used in the State. The High Court upheld the Act and dismissed the petitions. The Supreme Court grants leave to appeal against this judgment.
Findings of Court:
The Court found that Sections 3, 8, and 14 of the Act, along with Rules 12, 13, and 14, provide a comprehensive framework for assessment and refund. It held that operators are liable for tax unless they declare non-use in the prescribed manner. Since the appellants did not furnish written intimation of non-use, they are not entitled to refund, and the tax liability stands.
Issues:
Whether the Act provides for assessment and refund of tax for vehicles plying on All-India Tourist permits. Whether non-use of vehicles outside the State attracts tax without a declaration of non-use. Whether the provisions are constitutionally valid.
Ratio Decidendi:
The statutory scheme under the Act and Rules is sufficient to govern tax liability, assessment, and refund. The onus is on the operator to declare non-use to avail refund. The expression 'used or kept for use' includes vehicles kept available for use, and mere plying outside the State does not exempt tax.
Result:
The appeals are dismissed with costs, and the interim orders passed by the High Court are vacated.
(A) The case involves the interpretation and application of the Madhya Pradesh Motor Vehicle Taxation Act, 1991 (Act 25 of 1991), as amended by Acts 26 of 1991 and 10 of 1993, read with the Madhya Pradesh Motor Vehicle Taxation Rules, 1991, in the context of vehicles plying on All-India Tourist Permits. Sections 3, 8, 14, and read with Rules 12, 13, and 14 of the M.P. Rules define the charging basis, assessment procedure, and refund mechanism, asserting that the State legislature competent under Entry 57 of List-II of the Constitution. The High Courts judgment is challenged on the ground of lack of assessment machinery for tourist permit vehicles and denial of refund, but the Act is held to provide adequate provisions for tax liability, assessment, and refund, subject to compliance with procedural requirements.
(B) Non-use of a vehicle within the State does not, by itself, absolve the operator from tax liability; the operator must declare non-use through the prescribed procedure to claim a refund. The expression 'used or kept for use' encompasses vehicles kept available for use, even when plying outside the State under contract. The burden is on the State to prove use, but the presumption is that a registered vehicle is used or kept for use, and relief is only available upon certified non-use or formal declaration.
Facts of the case:
Bus operators holding All-India Tourist permits challenged the Madhya Pradesh Motor Vehicle Taxation Act, 1991, before the High Court of Madhya Pradesh, alleging lack of assessment machinery and denial of tax refund for periods when vehicles were not used in the State. The High Court upheld the Act and dismissed the petitions. The Supreme Court grants leave to appeal against this judgment.
Findings of Court:
The Court found that Sections 3, 8, and 14 of the Act, along with Rules 12, 13, and 14, provide a comprehensive framework for assessment and refund. It held that operators are liable for tax unless they declare non-use in the prescribed manner. Since the appellants did not furnish written intimation of non-use, they are not entitled to refund, and the tax liability stands.
Issues:
Whether the Act provides for assessment and refund of tax for vehicles plying on All-India Tourist permits. Whether non-use of vehicles outside the State attracts tax without a declaration of non-use. Whether the provisions are constitutionally valid.
Ratio Decidendi:
The statutory scheme under the Act and Rules is sufficient to govern tax liability, assessment, and refund. The onus is on the operator to declare non-use to avail refund. The expression 'used or kept for use' includes vehicles kept available for use, and mere plying outside the State does not exempt tax.
Result:
The appeals are dismissed with costs, and the interim orders passed by the High Court are vacated.
ORDER
Civil Appeal Nos. 5560, 5561, 5562-70 of 2002 @ SLP (C) No. 4771/1994 and SLP (C) No. 5034/1994 and SLP (C) Nos. 4516-4524/1995 :
Leave is granted.
2. This batch of appeals arises from the common judgment and order of the High Court of Madhya Pradesh (Jabalpur Bench) passed on February 9, 1994 in various writ petitions filed by bus operators holding All-India Tourist permits.
3. The State of Madhya Pradesh passed The Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991 [for short, Act 25 of 1991 ] under Entry 57 of List-II of the Seventh Schedule to the Constitution. The said Act was subsequently amended by Act 26 of 1991. Act 25 of 1991, thus amended, was challenged before the High Court of Madhya Pradesh, inter alia, on the ground of lack of legislative competence. The High Court repelled the contention and dismissed the writ petition (Misc. Petition No. 39 of 1992) on 1st October, 1992. Subsequently, Act 25 of 1991 was again amended by Act 10 of 1993, which was also questioned but it was upheld by the High Court in Jabalpur Bus Operators Association & Ors. vs. Union of India & Ors. (Misc. Petition No. 1646 of 1993), reported in 1993 M.P.L.J. 992. The scope of challenge in this batch of writ petitions is with regard to the absence of a machinery for assessment of tax for the vehicles plying on the basis of All India Tourist Permit in the State of Madhya Pradesh and denying them refund of tax for the period they were not used or kept for use in the State of Madhya Pradesh.
4. Mr. M.L. Lahoty, learned counsel appearing for the appellants in the civil appeal (arising out of S.L.P. (C) No. 4771 of 1994), has contended that though the Act was upheld by the High Court, it was observed that the State should provide procedure for assessment of tax liability, already created, by way of filing return, assessment and payment of tax. What the learned counsel submits is that for the purpose of ascertaining the tax liability and refunding the tax, there is no provision in Act 25 of 1991 and the Madhya Pradesh Motoryan Karadhan Rules, 1991 (for short, "the M.P. Rules") as such the provisions of the Act have to be declared as unconstitutional.
5. We are afraid, we cannot accede to the contention of the learned counsel. On a plain reading of the provisions of Act 25 of 1991, it is evident that Section 3 is the charging section, assessment procedure is laid down in Section 8 of the Act for assessment and as a consequence of assessment where the operator is found entitled to refund, Section 14 provides for refund of the tax. These provisions equally apply to the operators holding All-India Tourist permits. Section 14, insofar as it is relevant for our purpose, reads as follows:
"14. Refund of tax.-- (1) Where
(i) the tax for any motor vehicle has been paid for any month, quarter, half year or year and the motor vehicle has not been used during the whole of that month, quarter, half year or year or a continuous part thereof not being less than one month and written intimation of such non-use has been given in the prescribed form to the Taxation Authority in the manner prescribed prior to the commencement of the period of such non-use; or
(ii) the vehicle has been so altered as to entitle the owner to the refund of a portion of the already paid,
a refund of the tax shall be payable at such rates and subject to such conditions as may be prescribed. "
6. From a perusal of the provisions, extracted above, it is clear that (1) where tax has been paid for any month, quarter, half year or a year and any motor vehicle (which includes a vehicle plying on the basis of All-India Tourist permit) has not been used during the whole of the month, quarter, half year or year or a continuous part thereof, not being less than one month, and written intimation of such non-use has been given in the prescribed form to the Taxation Authority in the manner prescribed prior to the commencement of the period of non-use; or (2) the vehicle has been so altered as to entitle the owner to the refund of a portion of tax already paid, a refund of tax shall have to be made.
7. The proviso inserted by Act 26 of 1991 provides relief even in case of non-use of the vehicle for a part of the month as well.
8. Admittedly, in these cases, none of the member of the appellant Association had given any written intimation of non-use of the vehicle for any part of the period, be it less than a month, a month, a quarter, half a year or a year. The charge on the motor vehicle levied under Section 3 of the M.P. Act is on every motor vehicle used or kept for use in the State at the rate specified in the Schedule. The vehicles in question fall in clause (f) of the Schedule. The expression used or kept for use means, either the actual use of the vehicle on the roads of the State of Madhya Pradesh or keeping the vehicle (which is in condition and capable of being used) available for use in the State, if so desired. While plying outside the State in connection with a contract, a vehicle will, nonetheless, be within the import of kept for use in the State. It is immaterial for the purpose of Section 3 of Act 25 of 1991, whether a vehicle is actually being used or is kept for use in the State.
9. It is no doubt true that in Bolani Ores Limited vs. State of Orissa [1974(2) S.C.C. 777], a three - Judge Bench of this Court observed,
"If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed."
but the Court elucidated the principle thus:
"This very concept is embodied in the provisions of Section 7 of the Taxation Act as also the relevant sections in the Taxation Acts of other States, namely, that where a motor vehicle is not using the roads and it is declared that it will not use the roads for any quarter or quarters of a year or for any particular year or years, no tax is leviable thereon and if any tax has been paid for any quarter during which it is not proposed to use the motor vehicle on the road, the tax for that quarter is refundable."
10. It is, therefore, clear that non-use of a vehicle in the State is by itself not enough; the fact of non-use has to be declared to the concerned authority to avoid tax liability. The principle underlying taxing the vehicle in the absence of such a declaration and relieving it from the burden of tax only when a declaration of non-use is given, has been explained by this Court in Travancore Tea Estates Co. Ltd. & Ors. vs. State of Kerala & Ors. (1980 (3) S.C.C. 619). It is laid down therein,
"If the words used or kept for use in the State are construed as used or kept for use on the public roads of the State, the Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II. If the vehicles are suitable for use on public roads they are liable to be taxed. In order to levy a tax on vehicles used or kept for use on public roads of the State and at the same time to avoid evasion of tax the legislature has prescribed the procedure."
11. It was further pointed that the registered owner or any person having possession of or control of a motor vehicle for which a certificate of registration is current shall for the purpose of this Act be deemed to use or keep such vehicles for use in the State, except during any period for which the Regional Transport Authority has certified in the prescribed manner that the motor vehicle has not been used or kept for use. The presumption is that a motor vehicle for which a certificate of registration is current shall be deemed to be used or kept for use in the State. This is to ensure and safeguard the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public road of the State. At the same time, the interest of the bonafide owner is also safeguarded by enabling him to claim or obtain a certificate of non-use from the prescribed authority and, in that case, the owner is required to give intimation of non-use. We are in respectful agreement with these observations.
12. It may be mentioned that to give effect to the provisions for refund of tax, Rules 12 to 14 of the M.P. Rules lay down the requirements and the procedure for that purpose in the event of non-user of the vehicle.
13. It is not necessary to dilate on this aspect as, admittedly, the members of the appellant Association have not given any such intimation so as to avail any benefit of Section 14 of Act 25 of 1991 read with the abovesaid Rules. Therefore, we cannot but repel the contention of the learned counsel that the Act did not provide for the refund of tax for the period for which the vehicle plying on All-India Tourist permits is not actually used in the State, so the provision has to be declared as unconstitutional. Having regard to the scope of the charge under Section 3 of Act 25 of 1991, once it is found that such vehicles are kept for use within the meaning of the said expression, explained above, the tax liability cannot be avoided.
14. From the above discussion, it follows that there are adequate provisions in Act 25 of 1991, as amended, and the Rules framed thereunder for ascertaining the liability, assessment and refund of tax leviable under the said Act. The vehicles plied by the members of the appellant Association, which are registered in the State of Madhya Pradesh, are within the net of charge under Section 3. They do not qualify for refund of tax merely because while plying in other States in connection with a contract with tourists, the vehicle cannot be said to be used or kept for use in the State. However, they will be entitled to refund of tax only on fulfilment of requirements of Section 14 of Act 25 of 1991 and the Rules made thereunder, referred to above.
15. For these reasons, we find no merit in these appeals and they are, accordingly, dismissed with costs.
16. Interim orders passed by this court in these cases shall stand vacated.
Writ Petition (C) No. 281 of 1994:
17. On the contention raised, we are not satisfied that any fundamental right of the petitioners is infringed to maintain this petition under Article 32 of the Constitution. However, in view of the order passed in the Civil Appeal Nos. 5560, 5561 and 5562-5570 of 2002 (arising out of S.L.P. (C) Nos. 4771/1994, 5034/1994 and 4516-4524/1995), this writ petition is dismissed.
Civil Appeal No. 2176/1993 and S.L.P. (C) No. 6483/1995 :
18. None appears for the appellants/petitioners.
The civil appeal and the special leave petition are dismissed.
Ordered accordingly.
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