DEVINDER GUPTA, C. J. , G. ROHINI, DALAVA SUBRAMANYAM, J.

( 1 ) WHETHER the decisions rendered by two full Benches of this court in Y. Peda venkaiah v. The Regional Transport Officer and in V. Govindarajulu v. The Regional transport Officer, Anantapur holding that under the scheme of the Andhra Pradesh motor Vehicles Taxation Act, 1963 (A. P. Act no. 5 of 1963), (hereinafter referred to as the "taxation Act") the State is competent to collect the tax from the permit holders of stage carriage/contract carriage at higher rate for violation of the conditions of permit needs reconsideration in view of the later decision of the Supreme Court in m. Narasimhaiah v. Deputy Commissioner for Transport, Bangalore and the decision of another Full Bench of this court in Kanapala rama Rao v. Regional Transport officer, srikakulam is the question that arises for consideration in this batch of cases referred to for an authoritative pronouncement by the larger Bench.

( 2 ) WE have had the advantage of going through the opinion of Dr. Justice Motilal B. Naik and Brother Justice V. Eswaraiah in their separate draft judgments circulated.

( 3 ) DR. Justice Motilal B. Naik in his separate Judgment has recorded his opinion that the earlier view taken by the two Full benches of this court in Peda Venkaiah s case (1 supra) and Govindarajulu s case (2 supra) cannot be held to be good law in view of the decision of the Supreme Court in m. Narasimhaiah s case (3 supra) and has approved the view taken by the Full Bench of this court in Rama Rao s case (4 supra ). He has proceeded to hold that the Motor vehicles Act, 1988 (Central Act No. 59 of 1988), (hereinafter referred to as "the M. V. Act") provides for issuance of permit under section 87 or sub-section (8) of Section 88 of the said Act. The permits issued under the m. V. Act are subject to the conditions attached to the permits. If there is any violation of the conditions of the permit, appropriate, authority is competent to take action under Sections 53, 192 and 192-A of the M. V. Act. The scheme underlined under the M. V. Act provides punishment and penalty for using the vehicle in deviation of the conditions of permit, which includes cancellation of registration of the vehicle and prosecution of the permit holder. The State, therefore, cannot take recourse to levy additional tax or collect tax under Taxation act at higher rate when there is violation of conditions of permit while using the vehicle, which is used either as stage carriage or contract carriage. Tax under the A. P. M. V. Taxation Act is compensatory in nature and not ex-proprietary. Tax cannot be levied as fine or penalty for contravention of permit conditions and as such penalty cannot be treated as part of recovery of compensatory tax. Brother Dr. Justice Motilal B. Naik has opined that in Peda Venkaiah s case (1 supra), the Full Bench of this Court held that as soon as class of vehicle is changed, the rate of tax which applies to that class according to the notification is automatically attracted and there is no need for the taxation Act to provide specifically that if there is a change in the class of vehicle, the authorities can levy tax afresh on that vehicle as belonging to that class. The power contained in Section 3 read with Section 4 of the Taxation Act is sufficient to enable the government to levy tax from time to time when the class of the vehicles is changed. He further opined that the Full Bench decision in Govindarajulu s case (2 supra) reiterated the earlier view taken by the Full bench in Peda Venkaiah s case (1 supra ). After analysing the judgment of the Supreme court in Narasimhaiah s case (3 supra) and of the Full Bench in K. Ramarao s case (4 supra), it was held that the view taken in the earlier two Full Bench decisions in peda Venkaiah s case (1 supra) and govindarajulu s case (2 supra) is no longer good law in view of the decision of the supreme Court in Narasimhaiah s case (3 supra ).

( 4 ) BROTHER Justice

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