Judgment

FAZAL ALI, J.:- These appeals by special leave are directed against an order of the Commissioner of Pune dated 29-11-1977 dismissing the appeals and holding that the challenge to the tax sought to be realised by the Revenue was not tenable and the appellants were liable to pay the tax as also the penalty.

2. The appellants are a company registered under the Companies Act, 1913 and have their factories at Pimpri and Chinchvad in the District of Pune (Maharashtra). The appellants employ as many as 7,000 workmen in those factories. In order to provide transport facilities to their employees to come to the factories from their respective villages the appellants provided transport which would pick up passengers from Pune or Khed or Vadgaon or Alandi or places en route to TELCO Factory at Pimpri or Chinchvad and back. For this journey a nominal charge of Rs. 10 per month was realised by the appellants from the employees. Similarly, for the transport facilities provided to the employees from Pimpri Railway Crossing and onwards to TELCO factory, they were charged at the rate of Rs. 5 per month. A charge of Rs. 2 per month was levied for the transport of employees from Chinchvad village to TELCO factory at Pimpri and back. The appellants further averred that these amounts were realised by the appellants only from a particular category of employees and no charges were levied in respect of those employees who were in the supervisory grades. In the course of the arguments, it was pointed out that when the company was prepared to grant free transport facilities to the supervisory staff there was no reason why the same amenities should not be extended to the other employees and Mr. Nariman, learned counsel for the appellants frankly conceded that in future no charges would be realised from the employees and they would be provided free transport as in the case of supervisory staff. It is manifest that if the appellants had not levied any charge at all for the transport facilities granted to the employees they would not be exigible to passenger tax. Mr. Nariman, however, argued that even if a nominal charge is realised from the employees that would not make the transport a public service vehicle carrying passengers so as to attract the provisions of S. 3 which is the charging section of the Act. In our opinion, the contention of the learned counsel is well founded and must prevail.

3. The Bombay Motor Vehicles (Taxation of Passengers) Act, 1958 hereinafter called the Act is a statute which authorises the levy of passenger tax. This Act has been amended several times right from the year 1960 to 1975. Before analysing the relevant provisions of the Act, it may be necessary to extract the Preamble to the Act which runs thus :-

"Whereas it is expedient to provide for the levy of a tax on passengers, carried in certain classes of public service vehicles in the State of Bombay, it is hereby enacted in the Ninth Year of the Republic of India as follows."

4. A perusal of the Preamble clearly reveals that the dominant object of the Act was to impose tax on certain classes of public service vehicles. In other words, the Preamble indicates that vehicles which could not be termed as public service vehicles fell beyond the ambit of the taxing provisions of the Act.

5. Section 2 (7) of the Act defines stage carriage thus :-

" stage carriage means a motor vehicle carrying or adapted to carry more than six persons excluding the driver, which carries passengers for hire or reward, at separate fares paid by or for individual passengers either for the whole journey or for stages of the journey, and includes such a carriage or other omnibus when used as a contract carriage within the meaning of the Motor Vehicles Act, 1939."

6. Section 3 which is the charging section runs thus :-

"3. (1) There shall be levied and paid to the State Government a tax on all passengers carried by road in stage carriages at such rate to be fixed by the State Government from time to t