Pabudan Singh Vs. State of Rajasthan and ors. - Court Judgment

D.P. Gupta, C.J.

1. All these appeals raise common questions of law and as such they are disposed of by a common order. The appellants are holders of stage carriage or contract carriage permits. They have challenged the validity of the amendments introduced in the Rajasthan Motor Vehicles Taxation Act, 1951 and the Rajasthan Motor Vehicles Taxation Rules, 1951 by the Rajasthan Motor Vehicles Taxation (Amendment) Act, 1982 (here in after called 'the Amendment Act') and the Rajasthan Motor Vehicles Taxation(Amendment)Rules, 1982(here in after called 'the Amendment Rules').

2. The principal contention advanced by the learned Counsel for the appellants was in respect of the validity of Sections 4-B and 8-A relating to the levy, imposition and determination of special road tax. Sections 4-B and 8-A read as under:

4-B. Special Road Tax--In addition to the tax and surcharge levied under Sections 4 and 4-A respectively and subject to the rules as may be made by the State Government in this behalf, there shall be levied and paid to the State Government Special Road Tax on all transport vehicles at the rates fixed by the State Government by notification in the Official Gazette not exceeding the maximum rates specified in Schedule A.

8-A. Determination of Tax in certain cases.--(1) An owner of stage carriage may be required to maintain such accounts as may be prescribed and to submit the same to the Taxation Officer as and when required;

(2) If the Taxation Officer is satisfied that tax has not been correctly paid or the owner has not furnished return or has given inaccurate particulars in the return, he shall, after giving the owner a reasonable opportunity of being heard, proceed to determine the amount of tax due and recover the same.

The Amendment Act also inserted Schedule-A in the Act after the existing schedule prescribing the maximum rate of special road tax. The validity of Rule 6-C and 25-B introduced by the Amending Rules was also challenged.

3. Section 4-B provides for the levy and collection of special road tax on all transport vehicles in addition to the road tax and surcharge levied under Sections 4 and 4-A respectively, at the rates fixed by the State Government by notification subject to the maximum rates specified in Schedule-A. Section 8-A provides for maintenance of accounts by the owner of stage carriage in the prescribed manner and submission thereof to the Taxation Officer as and when required. The Taxation Officer is authorised to determine the amount of tax due after giving the owner of the vehicle a reasonable opportunity of being heard if he is satisfied that the tax has not been correctly paid or that the owner has not furnished return or that inaccurate particulars have been given in the return. The manner in which the accounts are required to be maintained by an owner of a stage carriage vehicle for the purpose of Section 8-A has been prescribed in Rule 6-C. The owner of the stage carriage is required to maintain separate account for each trip undertaken by the vehicle in the prescribed register M.T.N. The owner is also required to file a return in form MTM within 15 days of the close of the month for which the tax becomes due along with a receipt regarding the payment of the amount of tax. If the vehicle is not used during a particular period, the owner of the vehicle is required to obtain a certificate from the Taxation Officer and the circumstances in which the owner of the vehicle would be entitled to grant of certificate have been enumerated in Rule 26-B which runs as under:

25-B. Reasons for non-use--The Taxation Officer shall satisfy himself and certify that the vehicle was not used in the State under any of the circumstances mentioned below:

(1) that the Certificate of Registration was suspended by the competent authority;

(2) that the Motor Vehicle was restrained from plying by the competent court or authority;

(3) that the Motor Vehicle was involved in an accident and a report to this effect was made to the police and that because of accident it remained out of use atleast for a period of 3 months;

(4) that the Motor Vehicle was attached for the recovery of tax under the Rajasthan Land Revenue Act by the competent authority or attached under the warrant of attachment issued by the competent authority, or court and that during the period of attachment the vehicle did not remain in his possession;

(5) that the vehicle has been taken out of the State and certificate has been produced that the vehicle has paid tax in another State;

(6) any other reason or reasons, due to which it was impossible for the owner to ply the vehicle.

4. The first submission advanced by the learned Counsel for the appellants is that under Section 4-B the owner of the vehicle is required to make payment of special road tax at rate not exceeding the maximum rate specified in Schedule-A and which provides for charging road tax in accordance with the notification for the entire distance to be covered' during the month. It is submitted that the aforesaid provision is unreasonable as the owners of the transport vehicles are required to make payment of tax in respect of the distance which was not actually covered by the vehicle. It was submitted that the levy in terms of distance 'to be covered' is illegal as it is ambiguous. Learned Counsel vehemently submitted that no tax could be levied or charged in respect of the portion of the route over which the vehicle did not, travel during a particular month. Learned Single Judge held that under Rule 90 of the Rajasthan Motor Vehicles Rules, the stage carriage was required to perform a regular daily service on a particular route according to the time table fixed by the Regional Transport Authority and so special road tax can be determined under Section 4-B read with Schedule-A in accordance with the time table fixed by the Regional Transport Authority and where no timings were fixed, the entire distance to be covered during the month would mean one regular daily service for the purpose of determination of tax.

5. It may be observed that although special road tax has been levied and is to be paid by an owner of a transport vehicle in accordance with the rate fixed in the notification and subject to the maximum rate prescribed in Schedule-A and both Schedule-A as well as the notification dated October 1, 1982 issued by the State Government have prescribed the rate on the basis of the 'entire distance to be covered during the month', yet under Section 8-A the tax is to be determined on the basis of the account maintained by the owner of the stage carriage in the prescribed manner, namely, the Register MTN and then Rule 6-C requires the owner of the vehicle to file a return in form MTM. Both forms MTM and MTN in respect of the Register to be kept for the purpose of determination of special road tax and the return to be filed by the owner of the vehicle for that purpose prescribes the distance in kilo-meters and the total kilo-meters covered during the month by the vehicle. Thus, the interpretation which has to be placed on the words 'to be covered' employed in Section 4-B of the Act has to be read along with Rule 6-C and the form MTN and MTM and thus the distance to be covered is synonimous with the distance covered, We do not find any ambiguity in Section 4-B or Section 8-A and the determination of tax has to be made on the basis of the return filed by the owner of the vehicle in the prescribed manner, namely in form MTM and for the purpose of filing the return the owner of the vehicle is required to maintain the accounts in the prescribed register MTN.

6. In Maharashtra State Road Transport Corporation v. Babu Goverdhan Regular Motor Service Warora and Ors. (1), their Lordships of the Supreme Court observed that the relevant rule and the form prescribed have to be read together. It was observed that the forms so prescribed are integral part of the rule which the State Government is authorised to make. Thus, the account is to be kept by the owner of the vehicle in form MTN provides for entering the course of journey and distance in kilo-meters and the return on the basis thereof in form MTM contains an entery relating to total number of kilo-meters covered during the month by the vehicle. Accordingly the Schedule-A and the notification dated October 1, 1982 has to be interpreted as distance actually covered by the vehicle If for some reasons the vehicle has not been able to cover the entire distance of the route on a particular trip or a particular period or month, the special road tax will have to be determined according to the distance covered by the vehicle during that month. We, therefore, do not agree with the learned Single Judge in respect of the interpretation of the expression 'distance to be covered' occurring in Schedule-A and the notification dated October 1, 1982, When the owner of the vehicle is required to maintain an account in respect of the distance covered during the journey and he is called upon to file a return furnishing particulars of the total number of kilo-meters covered by the vehicle during the month and under Section 8-A the special road tax has to be determined on the basis of the return filed in accordance with the account kept in the prescribed register MTN. The special road tax could only be determined and charged with reference to the distance covered by the vehicle during the month which certainly means the distance actually covered by such vehicle and not the distance which the vehicle would have covered if it would have applied in accordance with the provisions of Rule 90 of the Rules. It is possible that on account of rains or flood or some circumstances it may not be possible for a vehicle to ply for the whole distance to the route on a particular day or a particular month or a particular period and in that event no special road tax would be charged in respect of the distance which has not been covered by the vehicle but it can only be charged in respect of the distance covered by the vehicle. The provisions of Schedule-A and the notification dated October 1, 1982 must be read in consonance with the provisions of Section 8-A Rule 6-C and the forms MTM and MTN prescribed under Rule 6-C. It cannot be lost sight of that under Section 8-A the basis for determination of special road tax payable in respect of a vehicle is the account kept by the owner of the vehicle in the prescribed manner in Register MTN and the return filed in accordance therewith in form MTM. The form and the Rules being integral part of the mechanism prescribed for levy, imposition and collection of special road tax along with Schedule-A and the notification dated October 1, 1982, they must be read and interpreted in harmony with the consequence that the expression 'distance to be covered' can only be interpreted as distance covered by a vehicle during the month.

7. The second submission of the learned Counsel for the appellants was that the owner of the vehicle was liable to the imposition of penalty for default where the tax in respect of a motor vehicle was not paid within the period allowed and so the penalty could only be imposed if the special road tax was not paid in accordance with the assessment or determination of tax made under Rule 8 and not for alleged default of payment of special Road tax at the time of furnishing the return. It was pointed out that Section 6(2) employed the word 'allowed' and as such the owner of the vehicle would become a defaulter and would be liable for payment of penalty under that section only after the assessment or determination of tax was made and the tax so determined was not deposited and the penalty could not be imposed for the alleged default at an earlier stage. It was also pointed out that an owner of a stage carriage was required to make a security deposit equivalent to the amount of tax payable by him for a period of two months in respect of such vehicle and that in this manner tax for a period of two months was already deposited in advance by the owner of the vehicle with the State Government and as such, penalty should not be imposed for nonpayment of tax along with furnishing of the return. We find ourselves unable to agree with the aforesaid contention of the learned Counsel for the appellants in view of the scheme of the Act and the Rules.

8. Section 6(1) provides for payment of additional tax within the time allowed by or under the Act. Rule 4(b) prescribes that the tax under Section 4-B in respect of a stage carriage shall be paid monthly after the end of the month, but on or before 7th of the month next following. Thus, special road tax which is in the nature of additional tax has to be paid monthly after the end of the month and at any rate before 7th day of the next following month. If the special road tax is not paid within the aforesaid period, the owner of the vehicle would be considered as a defaulter and he would be liable for payment of penalty in addition to tax at the prescribed rate. If the tax is paid within the first week after the expiry of period allowed then the penalty payable is Rs. 2/- but if the tax is paid thereafter the amount of penalty recoverable from the owner of the motor vehicle shall be 5% of the amount of tax due for each month or part of the month from the date of expiry of the period allowed. It may be observed that the assessment or determination of tax does not regulate the payment of special road tax which is governed by the provisions of Rule 4(b). The owner of the vehicle is required to submit a return to the Taxation Officer under Section 8-A read with the Rule 6-C. The provisions of Sub-section (2) of Section 8-A are significant in this respect, as they provide that the taxation officer shall proceed to determine the amount of tax due only if he finds that the tax has not been correctly paid by the owner of the vehicle or that the return has not been furnished by such owner or if the particulars furnished in the return are inaccurate. Thus, if the owner of the vehicle has correctly paid the amount of tax and the taxation officer is satisfied in respect thereof on an examination of return filed by the owner of the stage carriage vehicle, then it is not necessary for him to give an opportunity of hearing to the owner or proceed to determine the amount of tax due aganist such owner. Rule 8 prescribes the procedure for determination of tax for the purpose of Section 8-A. The Taxation Officer has to examine the declaration of the return filed by the owner of the vehicle and to satisfy himself that the correct amount of tax or additional tax has been paid by the owner of the vehicle. If it is found that the owner of the stage carriage vehicle, liable to pay monthly special road tax under Section 4-B has failed to submit the return as required under Rule 6 for any month within the prescribed period or if the return submitted by the owner of the vehicle appears to the Taxation Officer to be incorrect or incomplete or if the tax has not been correctly paid, the Taxation Officer, after giving a notice in form M.T.O. and affording an opportunity of hearing to the owner of the vehicle, determine the amount payable by him for the period for which either return was not filed or the entries were found to be incorrect or inaccurate and thereafter determine the amount of tax and penalty payable by the owner of the vehicle. The making of security deposit under Rule 6-A cannot affect the time limit prescribed in Rule 4 B for payment of tax before 7 day of the next succeeding month as the special road tax prescribed under Section 4-B is payable monthly. The owner of the vehicle is required to make payment of special road tax monthly within the period prescribed under Rule 4(b) which should not be less than the amount of tax payable in accordance with the notification issued under Section 4(B) prescribing the rate of tax. So long as the owner of the vehicle makes payment of tax correctly, the Taxation Officer need not proceed to make a determination of the special road tax payable by such owner in accordance with Section 8A read with Rule 8. The Taxation Officer shall merely examine the return filed by the owner of the vehicle under Section 8-A and on such examination is satisfied that the tax has been correctly paid, then no further proceedings by the Taxation Officer in that matter is necessary. It is only in three circumstances enumerated in Section 8-A(2) that the Taxation Officer after the examination of the return filed by the owner of the vehicle under Rule 8 is required to proceed to determine the amount of tax due, namely;

(a) the Taxation Officer is satisfied that the special road tax has not been correctly paid;

(b) the owner of the vehicle has not furnished the return as prescribed in Rule 6-C; and

(c) the owner of the vehicle gave inaccurate particulars in the return filed by him.

The Act provides for imposition of penalty, for non-payment of tax under Section 6(2). If the return is not filed within the prescribed time by the owner of the vehicle, the penalty is prescribed in Section 8(3) and if inaccurate particulars are furnished in the return filed by the owner, then the penalty is prescribed in Section 1 l(l))b). Thus so far as the question of non-payment of tax or less payment of tax is concerned, the penalty is prescribed in Section 6(2) and the owner of the vehicle is liable for payment of such penalty in addition to tax if the tax is not paid monthly before 7th day of the next succeeding month. The payment of penalty, therefore, for non-payment of tax or less payment of tax is not dependent upon the determination of tax under Section 8-A(2).

9. It was argued the learned Counsel for the appellants that Section 6(2) contain the words 'within the period prescribed' but by the Amendment Act the word 'prescribed' was substituted by the word 'allowed' and on the basis of this amendment it was argued that the period allowed for payment of tax should relate to the period after the determination of tax under Section 8-A (2). This argument of the learned Counsel has also no force as the word 'allowed' has been substituted by the Amendment Act for the word 'prescribed' only for the purpose of bringing the provisions of Section 6(2) in consonance with the provisions of Section 6(1) which provides that the additional tax shall be paid within the time allowed by or under the Act. The time allowed under the Act for payment of special road tax is prescribed by Rule 4(b) as 7th day of the next following month and the word 'allowed' employed in Section 6(2) has to be read along with Section 6(1) and Rule 4(b). The contention of the learned Counsel for the appellants in this respect is, therefore, repelled.

10. It was then argued by the learned Counsel for the appellants that no tax should be charged for the period during which the vehicle was not used. Rule 4(d) provides that the owner of the stage carriage shall not be required to pay special road tax for the period of non-use of the vehicle, which shall not be less than 7 consecutive days, if before the commencement of the non-use the owner applied to the Taxation Officer in the prescribed form stating the reaosns for the non-use and also deposits the permit with the Taxation Officer. It was argued that if the vehicle is involved in an accident or some such event takes place where it is not possible for the owner of the vehicle to inform the Taxation Officer before the commencement of the non-use of the vehicle and if for some such reasons, it is not possible for the owner of the vehicle to deposit the permit with the Taxation Officer, then benefit of provisions of Rule 4(d) could not be made available to the owner of the stage carriage vehicle. It was submitted that the provisions of Rule 4(d) imposed unreasonable restrictions on the owners of stage carriage vehicles as they are not relieved of the payment of special road tax even in genuine cases of non-use because they are unable to satisfy both the conditions specified in Rule 4(d), namely, making an application before the commencement of the non-use and depositing the permit of the vehicle with the Taxation Officer. It may be pointed out in this connection that Rule 25-B prescribes the circumstances or reasons for non-use of vehicle. If the motor vehicle is involved in an accident and the report to that effect is made to the police and the vehicle remains out of use atleast for period of three months then the Taxation Officer on being satisfied shall certify that the vehicle was not used in the State. More over, Sub-rule(6) of Rule 25-B provides that any other reason(s) due to which it was impossible for the owner to ply the vehicle would also constitute adequate circumstances for the Taxation Officer satisfying himself and certifying that the vehicle was not used in the State. If it is impossible for the owner of the vehicle to ply the vehicle, then the Taxation Officer shall certify that the vehicle was not used. We may point out that the reasons for non-user of the vehicle enumerated in Rule 25-B are of general nature applicable to all motor vehicles, while the provisions of Rule 4(d) are specially enacted in respect of the stage carriage vehicles. If an ordinary motor vehicle is involved in any accident, then the claim for non-payment of tax on account of non-user of the vehicle would only be available for the vehicle involved in accident and remaining out of use atleast for a period of three months. But in a case a stage carriage vehicle is involved in the accident, the owner thereof would be absolved from payment of special road tax if the vehicle is not used for seven consecutive days or more. If the period is less than 7 consecutive days, then such small period has to be ignored, but if the owner of the stage carriage vehicle desires to take advantage of provisions of Rule 4-B on account of the non-user of the vehicle for a period of 7 consecutive days, then there is no reason why the two conditions imposed by Rule 4-B, namely, that the owner files an application before the Taxation Officer stating the reasons for non-use and he deposits the permit with the Taxation Officer, should ordinarily be not fulfilled. Even if the stage carriage vehicle meets with an accident and it is unable to perform journey on the prescribed route for 7 consecutive days or more, then there is sufficient time for the owner of the vehicle to submit an application before the Taxation Officer for exemption from payment of special road tax and also for depositing the permit of the vehicle with the Taxation Officer. It may be observed that the deposit of the permit with the Taxation Officer would ensure that the vehicle would not be used or plied on the route by the owner of the vehicle, while he obtains benefit on the basis of the alleged non-user of the vehicle. Thus, proper provision has been made in the Rules for relieving the owner of the vehicle from payment of special road tax for the period of non-use of the vehicle provided such non-use is not less than seven consecutive days and the provision made in Rules 4(d) and 25-B are adequate in this respect.

11. It was lastly argued that after the determination of tax under Section 8-A no period has been allowed to the owner of the vehicle for payment. The procedure for determination of tax has been provided in Rule 8, if the Taxation Officer is satisfied that the special road tax has not correctly Veen paid or the owner of the vehicle has not furnished a return within the prescribed time or has given inaccurate particulars in the return filed by him then the Taxation Officer would issue a notice to the owner of the vehicle in form MTO and after giving the owner of the vehicle a reasonable opportunity of being heard, he shall proceed to determine the amount of tax payable by the owner for the period for which the return was either not filed or found to be incorrect or the tax paid was less than what was legally payable. After the determination of tax under Rule 8 the Taxation Officer is required to serve a notice in the prescribed form MTO to the owner of the vehicle along with a certified copy of the order determining the amount of tax payable by him and the penalty imposed deducting there from the tax already paid and directing the owner of the vehicle to make payment of the net amount due forth-with. Rule 8 further provides that in case the amount found due is not paid on the next day following the day of service of demand notice simple interest would be charged from the owner of the vehicle at the rate specified in that rule for the period until the default continues. Even in a decree passed by a civil court the decretal amount becomes payable as soon as the decree is passed and in case of non-payment of the amount interest is chargeable thereon. Similar provision has been made in Rule 8 in respect of the unpaid amount of tax due against the owner of the vehicle as determind by the Taxation Officer.

12. We have already discussed at length above the provisions of the Act and the Rules which require the owner of the vehicle to make payment of the tax by himself and if he fails to make payment of tax due from him in respect of a particular vehicle within the prescribed time, then only the question of determination of tax under Section 8-A arises and in such cases of non-payment of tax within the time allowed by law it is proper and reasonable that the owner of the vehicle is required to make payment of interest on the unpaid amount of tax from the date of determination under Section 8-A read Rule 8. After the tax is determined and a demand notice in form MTO is served, it is not necessary that any further time should be allowed for payment of the net amount due against the owner of the vehicle. As mentioned above, on his failure to make payment of the amount next day after the service of the notice of demand, interest on the prescribed rate would be payable on the amount due. We find nothing unreasonable in the provisions made in Rule 8 for the recovery of tax determined.

13. No other point was pressed before us by the learned Counsel for the appellants.

14. In the result, all the appeals are partly allowed to the extent that special road tax is payable in respect of the distance in kilo-meters covered by the vehicle during the month and not on the basis of the distance which should have been covered by the vehicle during that period. In other respects, the appeals fail.

15. The parties are left to bear their own costs of these appeals.