The Regional Transport Officer and anr. Vs. S. Rajendra - Court Judgment

Excerpt:
- karnataka motor vehicles taxation act, 1957. section 3; [s.r. bannurmath & a.n. venugopala gowda, jj] non-user of vehicle claim benefit of tax exemption burden held, it is on the person claiming the benefit and not on the department. sections 3 & 16non-user of vehicle to claim benefit of tax exemption held, to avail the exemption, the party desirous of taking advantage of the same, should comply with the conditions strictly. in case the vehicle had to be removed from the declared place where it was kept, obtaining of prior permission of the authority concerned in mandatory. once the conditions have been found to be violated the party is disentitled to claim exemption of registration, being current. sections 3 & 16held, when once a party obtained permission regarding provisional exemption, the vehicle cannot be removed from the notified place. such a violation would ensue that the benefit of exception could be revoked - manjunath, learned advocate for the respondent would contend that, there being no dispute of the fact that the vehicle had met with an accident on 15-4-2000, the same was inspected by the motor vehicle inspector and report submitted about its condition on 19-4-2000 and pursuant to the declaration of non-user, submitted in form 30, provisional permission having been granted, as the condition of the vehicle was totally bad, it was scraped and hence, the action taken by the first appellant is arbitrary, illegal and would contend that there was no liability to pay the tax. learned counsel would contend that the case being an exceptional one, as the vehicle has met with a major accident and subsequently scraped, the action of the appellants in revoking the exemption granted is bad. therefore, the conditions specified in section 3 of the act, which is the charging section, are all satisfied and the concerned authority was entitled to levy the tax. the burden of establishing that he has satisfied the conditions for exemption is on the person claiming the exemption. since the respondent has failed to satisfy the conditions regarding the exemption, as he has not placed any material to show that prior permission for removing the vehicle from the kept place was sought and obtained, it becomes clear that he is not entitled to the exemption, granted under section 16 of the act. manjunath, learned advocate for the respondent is that the case being an 'exceptional one' as the vehicle met with an accident, the insurance company sold the said vehicle and settled the claim on salvage loss basis and thus there is no liability to pay the tax is untenable, in view of the fact that the respondent or the insurance company did not intimate the authority of the intention of removing the vehicle from the kept place, prior permission was neither sought nor was granted and the certificate of registration had remained current. even the authenticity of the communications at annexure-d and e as well as their despatch was questioned by the appellants. road, bangalore-20, seeking confirmation about the authenticity of the communications at annexure-d and e, as well as the other aspects pertaining to the vehicle. 4. the said ruling permits an exceptional situation, obviously when it is shown that the vehicle met with an accident rendering totally useless for plying, to insist the person concerned to pay the tax in advance and thereafter to surrender the certificate of registration and other documents with an application for refund of the tax for the period of non-user is only a redundant formality. in this regard, there is a failure on the part of the r.1. respondent is the registered owner of motor vehicle bearing registration no. ka-09/4949. the tax of the vehicle was paid by him upto 3-4-2000. the vehicle had met with an accident on 15-4-2000. motor vehicle inspector has inspected the vehicle at the accident spot on 19-4-2000 and has submitted his report. the respondent has filed an application in form 30 on 25-4-2000 declaring the non-user of the vehicle and seeking exemption from payment of motor vehicle tax. considering the application, regional transport officer by an order dated 27-4-2000 had provisionally accepted the request of the respondent, subject to the fulfillment of the conditions of the notification dated 11-9-1980. the respondent had declared that the vehicle was kept at m/s. singh motors, 57/58, toobina kere, kiadb industrial area, yelachikkana halli, near mandya. motor vehicle inspector has visited the said garage on 18-7-2000 and has found the vehicle at the said place. on a further inspection held on 26-12-2002, it was noticed that, the vehicle was not found kept at the declared place and had been removed. a notice dated 9-1-2003 was issued by the first appellant to the respondent to show cause, why action should not be taken for revoking the intimation of non-user and demand tax for contravening the specified conditions of the said notification. the respondent has submitted his reply dated 27-1-2003, in which, he claimed that the vehicle is kept in the said place only. the respondent has submitted a further reply dated 4-2-2003. considering the said replies, holding that the cause shown by the respondent as unacceptable and the conditions as having been violated, an order dated 25-4-2003 was passed by the 1st appellant, revoking the intimation of non-user and consequently, levying tax of the vehicle for the period from 1-5-2000 to 30-4-2003, amounting to rs. 8,73,920/- and directing the respondent to pay the tax. pursuant to the order, a notice dated 9-4-2003 was issued by the first appellant to the respondent, demanding the payment of the said amount of tax. the respondent has questioned the said order by filing an appeal under section 15 of the karnataka motor vehicles taxation act, 1957 ('the act' for short). the second appellant considering the appeal, finding it to be devoid of merit, has dismissed the same by judgment dated 23-8-2004. the respondent has questioned the said order and judgment in the writ petition, which has been allowed. this appeal is filed to set aside the order passed by the learned single judge.2. we have heard smt. v. vidya, learned government advocate for the appellants and sri p.s. manjunath, learned advocate for the respondent and perused the record.3. smt. v. vidya, learned government advocate would contend that the vehicle has been removed from the declared place of parking, without prior permission and there was violation of the conditions imposed, while provisionally accepting the request of the respondent, of the non-user of the vehicle and granting exemption from payment of tax. she would further contend that the consequent action taken by appellant 1 and upheld by appellant 2, is in accordance with law. she relied upon the judgment of the hon'ble supreme court in the case of state of karnataka v. k. gopalakrishna shenoy and ors : [1987]3scr481 , and contended that the learned single judge was not justified in allowing the writ petition on the basis of the report of the motor vehicle inspector, who had inspected the vehicle, at the accident spot and had submitted the report of its conditions as found by him at that point of time.3.1 per contra, sri p.s. manjunath, learned advocate for the respondent would contend that, there being no dispute of the fact that the vehicle had met with an accident on 15-4-2000, the same was inspected by the motor vehicle inspector and report submitted about its condition on 19-4-2000 and pursuant to the declaration of non-user, submitted in form 30, provisional permission having been granted, as the condition of the vehicle was totally bad, it was scraped and hence, the action taken by the first appellant is arbitrary, illegal and would contend that there was no liability to pay the tax. learned counsel would contend that the case being an exceptional one, as the vehicle has met with a major accident and subsequently scraped, the action of the appellants in revoking the exemption granted is bad. the learned counsel also contended that the insurance company has sold the vehicle and settled the claim on salvage basis. the learned counsel would generally support the order passed by the learned single judge.4. section 3(1) of the act provides that a tax at the rates specified in part a of the schedule, shall be levied on all motor vehicles suitable for use on roads. explanation to section 3(1) of the act, provides that a motor vehicle of which the certificate of registration is current shall, for the purpose of the act, be deemed to be a vehicle suitable for use on roads. note: for the purpose of the explanation provides that, the certificate of registration shall, notwithstanding anything contained in section 38 of the motor vehicles act, 1939 be deemed to be current, even if the certificate of fitness is not effective, provided such certificate of fitness has not been cancelled. thus it is clear from the said provisions that, a motor vehicle of which, the certificate of registration is current, is required to be deemed to be a vehicle suitable for use on roads. all motor vehicles which are suitable for use on roads attract the tax liability as provided under sub-section (1) of section 3 of the act. it is not the case of the respondent that the certificate of registration of the vehicle was cancelled or was not current from 1-5-2000 to 30-4-2003. the respondent has not produced any evidence to show that he or the insurance company made any application seeking cancellation of the registration of the vehicle on any ground during the said period. hence it is reasonable to hold that the certificate of registration was current, there being no evidence produced by the respondent to the contrary effect. therefore, the conditions specified in section 3 of the act, which is the charging section, are all satisfied and the concerned authority was entitled to levy the tax. in the case of k. gopalakrishna shenoy, the hon'ble supreme court has considered the issue as to whether the owner or the person having possession or control of a motor vehicle, is bound to pay the tax under section 3(1) of the act because, the vehicle was in the state of repair and was not put to use on the road and furthermore, the certificate of fitness of the vehicle had not been kept current, even though the certificate of registration was kept current? taking into account, the explanation to section 3(1) of the act, it was held as follows.7...the resultant position that emerges is that section 3(1) confers a right upon the state to levy a tax on all motor vehicles which are suitably designed for use on roads at prescribed rates without reference to the roadworthy condition of the vehicle or otherwise. section 4 enjoins every registered owner or person having possession or control of the motor vehicle to pay the tax in advance. the explanation to section 3(1) contains a deeming provision and its effect is that as long as the certificate of registration of a motor vehicle is current, it must be deemed to be a vehicle suitable for use on the roads. the inevitable consequence of the explanation would be that the owner or a person having control or possession of a motor vehicle is statutorily obliged to pay the tax in advance for the motor vehicle as long as the certificate of registration is current irrespective of the condition of the vehicle for use on the roads and irrespective of whether the vehicle had a certificate of fitness with concurrent validity or no?.(emphasis supplied)5. the respondent had claimed and secured the benefit of exemption under section 16 of the act, by intimating the authorities about the non-user of the motor vehicle and about the keeping of the vehicle in the garage. one of the conditions, for exemption under section 16 of the act as per the notification issued thereunder is that, the vehicle in respect of which the exemption is claimed, is to be transferred from the notified place to another place, prior permission in respect thereof should be obtained. it is not in dispute that the vehicle in question was not found in the notified place, on being inspected by the motor vehicle inspector and that the respondent did not seek and obtain the prior permission, for removing the vehicle from the kept place, for whatever reasons. the person claiming exemption, has to fulfill the conditions which granted the exemption. the burden of establishing that he has satisfied the conditions for exemption is on the person claiming the exemption. since the respondent has failed to satisfy the conditions regarding the exemption, as he has not placed any material to show that prior permission for removing the vehicle from the kept place was sought and obtained, it becomes clear that he is not entitled to the exemption, granted under section 16 of the act. the exemption which was provisionally granted, has been revoked by the authority.6. in the absence of the exemption, there is a statutory liability to pay the tax at the prescribed rate. the liability to pay the tax continues as long as the certificate of registration is current. in case where the certificate of registration is current and the vehicle had not been actually put to use, if the tax has been paid in advance, there is provision to seek refund under section 7 of the act by making application to the authority. the said aspect has been considered by the hon'ble supreme court in k. gopalakrishna shenoy's case and it has been held as follows.8. ...the principle underlying the taxation act is that every motor vehicle issued a certificate of registration is to be deemed a potential user of the roads all through the time the certificate of registration is current and therefore liable to pay tax under section 3(1) read with section 4. if, however, the vehicle had not made use of the roads because it could not be put on the roads due to repairs, even though the certificate of registration was current, the owner or person concerned has to seek for and obtain refund of the tax paid in advance after satisfying the authorities about the truth of his claim. it is not for the transport authorities to justify the demand for tax by proving that the vehicle is in a fit condition and can be put to use on the roads or that it had plied on the roads without payment of tax. it would be absolutely impossible for the state to keep monitoring all the vehicles and prove that each and every registered vehicle is in a fit condition and would be making use of the roads and is therefore liable to pay the tax. for that reason, the state has made the payment of tax compulsory on every registered vehicle and that too in advance and has at the same time provided for the grant of refund of tax whenever the person paying the tax has not made use of the roads by plying the vehicle and substantiates his claim by proper proof. any view to the contrary would defeat the purpose and intent of the taxation act and would also afford scope and opportunity for some of the persons liable to pay the tax to ply the vehicle unlawfully without payment of tax and later on justify their non-payment by setting up a plea that the vehicle was in repair for a continuous period of over a month or the whole of a quarter, half-year or year as they choose to claim.(emphasis supplied)7. the contention of sri p.s. manjunath, learned advocate for the respondent is that the case being an 'exceptional one' as the vehicle met with an accident, the insurance company sold the said vehicle and settled the claim on salvage loss basis and thus there is no liability to pay the tax is untenable, in view of the fact that the respondent or the insurance company did not intimate the authority of the intention of removing the vehicle from the kept place, prior permission was neither sought nor was granted and the certificate of registration had remained current. as such, in view of the statutory provisions referred to above, and also the law declared in k. gopalakrishna shenoy's case, it is not open to the respondent to contend that there was no liability to pay the tax, merely on the basis of the vehicle having been met with a major accident. the reliance placed on the report of the inspector will not help the case of the respondent, inasmuch as the report at annexure-b, was one prepared by the motor vehicle inspector on 19-4-2000, about the condition of the vehicle as was found by him at the accident spot. there was a long gap from that day, till the date of the order, passed by the authority. an identical case had come up for consideration in writ appeal no. 2839 of 2003. by judgment dated 20-6-2005, it was held as follows.the case of respondent 1 is that the vehicle had been sold to a scrap dealer. that may or may not be so but the fact remains that the vehicle was removed from the garage without the prior permission of the regional transport officer. there is, thus, no doubt that respondent 1 violated the conditions on which exemption was granted to her from payment of tax in terms of the aforesaid notification. having violated the conditions of the notification, respondent 1 became disentitled to claim exemption from payment of tax. in this view of the matter, learned single judge was not justified in interfering with the order of assessment as affirmed by the appellate authority in appeal. the question whether the vehicle was in existence or not was not really relevant for the purpose of determining the liability of respondent 1.8. the contention of the learned counsel for the respondent that, the insurance company had sent the communications dated 27-10-2000 and 28-8-2003, vide annexure-d and e, to the first appellant and as such, the authorities were aware of the vehicle having been sold on salvage basis, was disputed by the appellants. even the authenticity of the communications at annexure-d and e as well as their despatch was questioned by the appellants. xerox copies of annexure-d and e, produced for our perusal at the time of preliminary hearing, were found to be in different letter head of the insurance company and did not tally with those produced along with the writ petition. hence, we had called upon the respondent to produce the carbon copies of annexure-d and e or any proof of the insurance company to show that the same were sent by it to the 1st appellant. the respondent did not, do either. the appellants produced a letter dated 7-8-2007, sent by them to the branch manager, the oriental insurance company limited, city bank, no. 60, s.c. road, bangalore-20, seeking confirmation about the authenticity of the communications at annexure-d and e, as well as the other aspects pertaining to the vehicle. in reply, it has been stated by the insurance company vide its letter dated 9-8-2007, that from the verification of the despatch register for the period 27-10-2000 onwards (1 month) and 28-8-2000 onwards (1 month), no records of the despatch of the letters vide annexure-d and e, could be found and further the designation of the officer incharge as per letter dated 27-10-2000 annexure-d, appears as 'senior branch manager' whereas, at that point of time, the branch incharge's designation was 'branch manager'. when the insurance company itself has admitted that its despatch register does not contain the entries of the despatch and has not confirmed the authenticity of annexure-d and e and has also contradicted about the same, it becomes clear that annexure-d and e, are fake records produced by the respondent to mislead the learned single judge. the explanation sought to be offered in respect of the said documents, is totally unacceptable. hence, we hold that the documents at annexure-d and e appears to have been manufactured by the respondent for the purpose of misleading and to gain illegal advantage.9. the learned counsel for the respondent invited our attention to the order passed by the learned single judge of this court in the case of iqbal ahmed v. regional transport officer and anr. w.p. no. 8777 of 1991, dd: 1-7-1991. in the said case though the decision in gopalakrishna shenoy was taken note of, but it was held as follows.however, it is clear that the appellate authority has lost sight of one of the significant fact and it is the report of the motor vehicles inspector which makes it clear that the vehicle was incapable of being used on road as it needed major repairs from 27-1-1990. that being so, a charge under section 3 of the act itself was not attracted and in such a case question of claiming exemption under the provisions of the act does not arise and therefore, compliance with the said notification or the law laid down in gopalakrishna shenoy's case is not attracted.9.1 following the said order, another learned single judge of this court in the case of abdul salam hussainsab mujawar v. the regional transport officer and anr. w.p. no. 9992 of 1999, dd: 7-4-1999, has held as follows.i do not think that the order passed by the appellate authority is sustainable. identical situation came up for consideration before this court in w.p. no. 8777 of 1991, wherein this court observed as stated above. if this is the factual position, it is not proper to insist the petitioner again to surrender the documents etc., and to go through the formalities contemplated under section 3 of the act to seek exemption. this is what this court is declared in an identical situation.9.2 in the case of rajiv bhandary v. the regional transport officer, udupi and anr. 2004(5) kar. l.j. 412 : air 2004 kant. 382 learned single judge of this court, following the order passed in w.p. no. 8777 of 1991, dd: 1-7-1991, has held as follows.it is significant to note that, the appellate authority has lost sight of the report of the motor vehicles inspector, which makes it clear that, the vehicle found at m/s. navdurga garage nh-17 is not capable of being used on road as per his report dated 2nd may, 2002. this aspect of the matter has been overlooked by respondents 1 and 2. therefore, the same requires reconsideration as rightly pointed out by the learned counsel appearing for the petitioner and as held by this court in its order dated 1st july, 1991 in writ petition no. 8777 of 1991. if the ratio of the order passed by this court is applied, the same has direct bearing on the facts of this case. this court has held that the appellate authority has lost sight of one significant fact that is the report of the motor vehicles inspector, which makes it clear that the vehicle was not capable of being used on road as it needed major repair and that being so, charge under section 3 of the act itself was not attracted and in such cases, the question of claiming exemption under the provisions of the act does not arise. taking into consideration the ratio of the law laid down by this court and having regard to the facts and circumstances of the case, as stated above, i am of the view that the tax demand notice issued by the first respondent and the order passed by the second respondent are liable to be modified and the same requires reconsideration afresh.9.3 in the case of k. mukunda bhat v. state of karnataka 2002(3) kar. l.j. 657, the learned single judge of this court has held as follows.4. the said ruling permits an exceptional situation, obviously when it is shown that the vehicle met with an accident rendering totally useless for plying, to insist the person concerned to pay the tax in advance and thereafter to surrender the certificate of registration and other documents with an application for refund of the tax for the period of non-user is only a redundant formality. in such situation, the r.t.o. concerned has jurisdiction to exempt the payment of advance of tax, when it is convincingly shown that the vehicle was not in a plying condition. in the instant case, sufficient material by ex. p. 6 is produced to show that the original registration certificate and other documents were in the custody of the r.t.o., nagarkoil. it was also shown that the vehicle which met with an accident was in irreparable condition. in such situation, it was appropriate on the part of the r.t.o., udupi to have found out from the e.t.o., nagarkoil the correctness of the version stated by the petitioner. the r.t.o., udupi being a public servant, should have discharged his duties conscientiously and diligently without harping on the technicalities. in this regard, there is a failure on the part of the r.t.o., udupi in not exercising his discretional powers in a proper and expected manner.10. in the cases referred to supra, decided by the learned single judges of this court, the violation of conditions imposed in the notification dated 11-9-1980, issued under section 16 of the act was not considered. to avail the exemption, the party desirous of taking advantage of the same, should comply with the conditions strictly. in case the vehicle had to be removed from the declared place where it was kept, obtaining of prior permission of the authority concerned, is mandatory. once the conditions have been found to be violated, the party is disentitled to claim exemption from the payment of tax of the vehicle, the certificate of registration, being current. in the aforesaid cases, the issue, as to the effect of the certificate of registration being current, the statutory liability under section 3(1) of the act and the burden of proof as held in gopalakrishna shenoy's case, have not been considered. in the instant case, the respondent had obtained the provisional exemption of tax in terms of the notification issued under section 16 of the act. but in violation of the conditions has removed the vehicle without seeking and obtaining the prior permission of the 1st appellant. the violation of the conditions having been noticed, the 1st appellant has revoked the exemption and thereafter has demanded the respondent to pay the tax on the strength of the principle underlying the act that, every motor vehicle issued with a certificate of registration is deemed to be potential user of the roads and through out the time, the certificate of registration is current and therefore liable to pay the tax under section 3(1) read with section 4 of the act, in our view, the learned single judges in the cases stated supra, have not taken into account the declaration of law made by the hon'ble supreme court in k. gopalakrishna shenoy's case to the effect that it is not for the transport authorities to justify the demand for tax by proving that the vehicle is in a fit condition and can be put to use on the roads or that it had piled on the roads without payment of tax. the burden of proof is not on the transport department authorities, but is on the registered owner or the person in lawful possession of the vehicle. further the provisions of sections 3, 4, 7 and 16 of the act and the applicable thereto, have not been properly noticed. further the decision in gopalakrishna shenoy's case has not been correctly applied. hence, the said orders cannot be held to have laid down the law correctly and are therefore, overruled.11. in view of the above discussion, the writ appeal succeeds and the same is allowed. the order of the learned single judge dated 12-4-2006 allowing writ petition no. 15051 of 2005 is hereby set aside and the writ petition is dismissed.