( 1 ) A Division Bench of this Court, having noticed divergent views taken by two division Benches in S. V. Ramanamma v. Asst. Transport Commissioner and in smt. SK. Mumtaz Begum v. Regional transport Officer-cum-Licensing Officer, nellore as regards the liability of a transport operator who has violated the conditions of a stage carriage permit, has referred these matters to this Bench for resolution of the controversy.

( 2 ) THE petitioners vehicles, which are having stage carriage permits on the town service route - Amudalavalasa Bus Stand to srikakulam (Day and Night Hospital junction) were found plying on the routes not authorized by the permits within the town. After the check, the petitioners were issued show-cause notices calling upon them to explain as to why the difference of tax should not be collected for the quarter to which they submitted their explanations. Thereafter, the Motor Vehicles Inspector, palakonda has issued the impugned demand notices dated 4-10-1999 purported to be in terms of Item 4 (v) (B) (v) of the Notification issued by the Government in G. O. Ms. No. 75, Transport, Roads and Buildings (Tr. II), dated 27-4-1993 read with explanation-II and Explanation III (ii) thereunder and also read with G. O. Ms. No. 220, T. R. and B, dated 7-11-1996 demanding difference of tax of Rs. 8,484. 00, rs. 12,650 and Rs. 12,650. 00 respectively from the petitioners calculated at the maximum rate of Rs. 790. 00 per seat per quarter treating them as vehicles plying as stage carriages on the routes other than town service routes.

( 3 ) ACCORDING to the petitioners, the deviation, if any, is only within the town route and, therefore, it does not attract levy of additional tax as held in Sk. Mumtaz begum s case (supra ). The maximum tax that is liable to be paid in respect of town service for a vehicle having a town service permit as per Item 4 (iv) (b) is only Rs. 550. 00 whereas the petitioners paid @ Rs. 515. 00 and if at all any tax is due, only the difference has to be collected. It was also contended that since the offences were already compounded under Rule 217 A. P. Motor Vehicles Rules, 1989, the question of payment of any difference of tax does not arise. The deviation, if any, is within the town limit and hence the levy of tax at the maximum rate of rs. 790/- applicable to moffusil service route is illegal and arbitrary and contrary to the decision of the Apex Court in m. Narasimhaiah v. Dy. Commissioner for transport, Bangalore.

( 4 ) IN the counter filed by the respondents, it was stated that the vehicles were found plying on unauthorized route in violation of the conditions of permit at the time of check and hence tax is to be realized at the maximum rate of stage carriage as per the explanation III (ii) of G. O. Ms. No. 220 dated 7-11-1996. The decision in Mumtaz begum s case (supra) has no application to the present cases as in the said case the vehicle was found plying within the two terminuses deviating the route in town limits due to obstruction to reach the destination. In the present cases, the vehicles were plying beyond the termini point, i. e. , Srikakulam day and Night Hospital Junction to Old Bus stand. This Court in S. V. Ramanamma s case (supra) clearly held that the liability to pay the maximum rate of tax attaches itself to the vehicle, the moment it plies on a route other than the one authorized by the permit or without obtaining any permit. The decision of the Apex Court in narasimhaiah s case (supra) has also no application as in the said case; the Apex court was dealing with the issue of levy of additional tax for carrying more passengers than the permitted capacity.

( 5 ) SECTION 3 of the A. P. Motor Vehicles taxation Act, 1963 empowers the State government to levy tax on every motor vehicle used or kept for use in a public place in the State. The charging Section 3 of the act empowers the State Government to levy tax on every motor vehicle used or kept for use in a public place in th

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