B.A. Linga Reddy Vs. State of Karnataka, by Its Principal Secretary to the Transport Department and Others - Court Judgment

SooperKanoon Citationsooperkanoon.com/1173297
CourtKarnataka High Court
Decided OnDec-08-2014
Case NumberWrit Petition No. 52898 of 2014 (T-MVT)
JudgeHULUVADI G. RAMESH
AppellantB.A. Linga Reddy
RespondentState of Karnataka, by Its Principal Secretary to the Transport Department and Others
Excerpt:
karnataka motor vehicles taxation act, 1957 - section 8-b - comparative citations: 2015 (1) kantlj 357, 2015 (2) kccr 1321, 2015 air(kar) 54, (prayer: this writ petition is filed under articles 226 and 227 of the constitution of india, praying to declare provisions of section 8-b of karnataka motor vehicles taxation act (inserted by amendment act no. 14/1989) as unconstitutional and unenforceable (annexure-e) and to quash the order of respondent no.2dated 19-8-20j 4 passed in tax appeal n0.2/2014-15 (annexure-d) and to quash the order of respondent no.3 dated 17-2-2014 (annexure-c).) 1. petitioner is before this court seeking to declare the provisions of section 8-b of the karnataka motor vehicles taxation act as unconstitutional and unenforceable and to pass an order of certiorari to quash the order dated 19- 8-2014 passed by respondent no.2 in tax appeal no.2/2014-15 at annexure-d and to quash the order of respondent no.3 dated 17-2-2014 bearing no.rto/cta/rgn/transport/2013-14 at annexure-c. 2. petitioner is the registered owner of bus bearing no.ka-16 b-4480 registered on 1-10-2011 by respondent no.3 as all india tourist omni bus (for short "aitob") with seating capacity of 34 plus 2. the vehicle was converted to contract carriage on 23-2-2012 with seating capacity of 63 plus 2. once again, with effect from 2-5-2012, the said bus was converted from contract carriage to aitob with seating capacity of 63 plus 2. again on 27-12-2012, the said bus was converted from aitob to contract carriage. on 13-11-2013, on inspection, the bus was found carrying 44 adult passengers by collecting rs.250/- per seat and the said bus was found fitted with 44 luxury push back seats, for which respondent no.3 issued show-cause notice dated 17-1-2014 calling upon the petitioner to pay a sum of rs.7,65,930/- as double the difference of tax on the basis of check report. in reply, the petitioner requested respondent no.3 to drop the show-cause notice vide letter dated 7-2-2014. respondent no.3 on 17-2-2014 passed an order calling upon the petitioner to pay the aforesaid amount. aggrieved by the order dated 17-2-2014, the petitioner preferred an appeal before respondent no.2 in tax appeal no.2/2014-15 which was dismissed on 19-8-2014. since no alternative remedy is available to the petitioner, he is before this court. 3. heard the learned counsel for the petitioner and the learned additional government advocate. 4. learned counsel for the petitioner relied upon the decision of the apex court reported in (2006) 8 supreme court cases 513 in the case of hardev motor transport v. state of madhya pradesh and others. wherein on allegation that the appellants have been using their vehicles as stage carriage permits, their vehicles were detained and were asked to pay duty as if tne vehicles were being plied without any permit. challenging the constitutionality of entry iv(g) read with explanation 7 of schedule i, while allowing the appeals, it was held the tax imposed on motor vehicles in terms of the provisions of the 1991 act is a regulatory one. although a vehicle is roadworthy and can be plied on the road, tax may be imposed, but if a vehicle is not capable of being plied on the road, no tax could be levied. however, in paragraph no.32 of the judgment, it is observed the holder of a permit is liable to comply with the conditions of permit. if he violates the terms and conditions of permit, law will take its own course. if there is violation of the terms of permit, the consequences, thereof, shall ensue as contained in section 192-a of the motor vehicles act, 1988. a distinction must be borne in mind that a tax cannot be imposed by way of penalty although penalty can be imposed for non-payment of tax or evasion of tax. the state may make suitable legislations in this behalf. but the same would not mean that while specifying a rate of tax, the executive government of the state can indirectly levy a penalty which it cannot do directly. 5. in the other hand, learned additional government advocate referred to section 8-b of the karnataka motor vehicles taxation (amendment) act, 1989 which reads as under:  "8-b. further additional tax for misuse of motor vehicle - when any motor vehicle in respect of which tax has been paid is misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted or is used in such manner as to cause the vehicle to become, a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle, shall for such misuse other than the one under sub-section(4) of section 3, pay a further additional tax of a sum which is equal to double the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted." 6. in the case on hand, the bus was first registered as aitob with seating capacity of 44 plus 2. later, the bus was converted to contract carriage with seating capacity of 63 plus 2. the bus was again converted from contract carriage to aitob on 2-5-2012. once again/ the bus was converted from aitob to contract carriage on 27-12-2012. it appears, additional tax has been imposed with effect from 01-12-2012 up to 31-3-2014. the bus was inspected on 13-11-2013 and found it was utilised as aitob carrying 44 adult passengers by collecting rs.250/- per seat and it was fitted with 44 luxury push back seats as against the seating capacity of 65. 7. learned counsel for the petitioner contends that if there is any violation, action shall be initiated in a different manner but not to impose tax and also not to challenge under section 8-b of the act. in the case on hand, on frequent changes from aitob to contract carriage and vice versa, authority is insisting for additional tax. as per section 8-b for misuse of the vehicle, penalty has been imposed. whether the penalty has been imposed from the date of conversion of aitob to contract carriage or for a particular period where the violation has been taken place has to be considered. 8. learned additional government advocate submits, the bus was a contract carriage with seating capacity of 63 plus 2 in all. when the inspector of motor vehicles checked, it was found that the bus was fitted with 44 plus 2 in all luxury push back seats using as aitob. hence, the misuse of the bus from a contract carriage to aitob and unauthorisedly altering it as 44 plus 2 in all push back luxury seats, attracts higher rate of tax. in that view of the matter, when the vehicles are misused without seeking permission, then necessarily tax could be imposed by way of additional tax. the matter has to be re-considered by the assessing authority. however, it is for the petitioner to plead before the assessing authority as regards payment of additional tax as per section 8-b of the karnataka motor vehicles taxation (amendment) act, 1989 and seek for concession demonstrating that only for a particular period and time, the bus was used as such and not beyond it. the assessing authority is hereby directed to pass orders after hearing the petitioner. on such re-consideration, orders at annexures-'c' and 'd' shall be modified. accordingly, petition is disposed of.
Judgment:

(Prayer: This Writ Petition is filed Under Articles 226 And 227 of the Constitution Of India, praying to Declare Provisions of Section 8-B of Karnataka Motor Vehicles Taxation Act (Inserted By Amendment Act No. 14/1989) as Unconstitutional and Unenforceable (Annexure-E) and to Quash the Order Of Respondent No.2Dated 19-8-20j 4 passed in Tax Appeal N0.2/2014-15 (Annexure-D) and to Quash the Order Of Respondent No.3 Dated 17-2-2014 (Annexure-C).)

1. Petitioner is before this Court seeking to declare the provisions of Section 8-B of the Karnataka Motor Vehicles Taxation Act as unconstitutional and unenforceable and to pass an order of certiorari to quash the order dated 19- 8-2014 passed by respondent No.2 in Tax Appeal No.2/2014-15 at Annexure-D and to quash the order of respondent No.3 dated 17-2-2014 bearing No.rto/cta/rgn/transport/2013-14 at Annexure-C.

2. Petitioner is the registered owner of bus bearing No.KA-16 B-4480 registered on 1-10-2011 by respondent No.3 as All India Tourist Omni Bus (for short "AITOB") with seating capacity of 34 plus 2. The vehicle was converted to contract carriage on 23-2-2012 with seating capacity of 63 plus 2. Once again, with effect from 2-5-2012, the said bus was converted from contract carriage to AITOB with seating capacity of 63 plus 2. Again on 27-12-2012, the said bus was converted from AITOB to contract carriage. On 13-11-2013, on inspection, the bus was found carrying 44 adult passengers by collecting Rs.250/- per seat and the said bus was found fitted with 44 luxury push back seats, for which respondent No.3 issued show-cause notice dated 17-1-2014 calling upon the petitioner to pay a sum of Rs.7,65,930/- as double the difference of tax on the basis of check report. In reply, the petitioner requested respondent No.3 to drop the show-cause notice vide letter dated 7-2-2014. Respondent No.3 on 17-2-2014 passed an order calling upon the petitioner to pay the aforesaid amount. Aggrieved by the order dated 17-2-2014, the petitioner preferred an appeal before respondent No.2 in Tax Appeal No.2/2014-15 which was dismissed on 19-8-2014. Since no alternative remedy is available to the petitioner, he is before this Court.

3. Heard the learned counsel for the petitioner and the learned Additional Government Advocate.

4. Learned counsel for the petitioner relied upon the decision of the Apex Court reported in (2006) 8 SUPREME COURT CASES 513 in the case of HARDEV MOTOR TRANSPORT v. STATE OF MADHYA PRADESH AND OTHERS. Wherein on allegation that the appellants have been using their vehicles as stage carriage permits, their vehicles were detained and were asked to pay duty as if tne vehicles were being plied without any permit. Challenging the constitutionality of Entry IV(g) read with Explanation 7 of Schedule I, while allowing the appeals, it was held the tax imposed on motor vehicles in terms of the provisions of the 1991 Act is a regulatory one. Although a vehicle is roadworthy and can be plied on the road, tax may be imposed, but if a vehicle is not capable of being plied on the road, no tax could be levied. However, in paragraph No.32 of the Judgment, it is observed the holder of a permit is liable to comply with the conditions of permit. If he violates the terms and conditions of permit, law will take its own course. If there is violation of the terms of permit, the consequences, thereof, shall ensue as contained in Section 192-A of the Motor Vehicles Act, 1988. A distinction must be borne in mind that a tax cannot be imposed by way of penalty although penalty can be imposed for non-payment of tax or evasion of tax. The State may make suitable legislations in this behalf. But the same would not mean that while specifying a rate of tax, the executive government of the State can indirectly levy a penalty which it cannot do directly.

5. In the other hand, learned Additional Government Advocate referred to Section 8-B of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989 which reads as under: 

"8-B. Further additional tax for misuse of motor vehicle - When any motor vehicle in respect of which tax has been paid is misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted or is used in such manner as to cause the vehicle to become, a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle, shall for such misuse other than the one under sub-section(4) of Section 3, pay a further additional tax of a sum which is equal to double the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted."

6. In the case on hand, the bus was first registered as AITOB with seating capacity of 44 plus 2. Later, the bus was converted to contract carriage with seating capacity of 63 plus 2. The bus was again converted from contract carriage to AITOB on 2-5-2012. Once again/ the bus was converted from AITOB to contract carriage on 27-12-2012. It appears, additional tax has been imposed with effect from 01-12-2012 up to 31-3-2014. The bus was inspected on 13-11-2013 and found it was utilised as AITOB carrying 44 adult passengers by collecting Rs.250/- per seat and it was fitted with 44 luxury push back seats as against the seating capacity of 65.

7. Learned counsel for the petitioner contends that if there is any violation, action shall be initiated in a different manner but not to impose tax and also not to challenge under Section 8-B of the Act. In the case on hand, on frequent changes from AITOB to contract carriage and vice versa, Authority is insisting for additional tax. As per Section 8-B for misuse of the vehicle, penalty has been imposed. Whether the penalty has been imposed from the date of conversion of AITOB to contract carriage or for a particular period where the violation has been taken place has to be considered.

8. Learned Additional Government Advocate submits, the bus was a contract carriage with seating capacity of 63 plus 2 in all. When the Inspector of Motor vehicles checked, it was found that the bus was fitted with 44 plus 2 in all luxury push back seats using as AITOB. Hence, the misuse of the bus from a contract carriage to AITOB and unauthorisedly altering it as 44 plus 2 in all push back luxury seats, attracts higher rate of tax.

In that view of the matter, when the vehicles are misused without seeking permission, then necessarily tax could be imposed by way of additional tax. The matter has to be re-considered by the Assessing Authority. However, it is for the petitioner to plead before the Assessing Authority as regards payment of additional Tax as per Section 8-B of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989 and seek for concession demonstrating that only for a particular period and time, the bus was used as such and not beyond it. The Assessing Authority is hereby directed to pass orders after hearing the petitioner. On such re-consideration, orders at Annexures-'C' and 'D' shall be modified. Accordingly, petition is disposed of.