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1983 Supreme(Kar) 236
Karnataka High Court
SYED RAFIQ AHMED - Appellant
Versus
REGIONAL TRANSPORT OFFICER - Respondent
Decided On : 11-24-83
W.P. : 18958 of 1983
A.Ananda Shetty, H.B.DATAR, R.N.NARASIMHA MURTHY, S.V.KRISHNASWAMY
The Act by necessary intendment excluded the application of the principle of audi alteram partem for recovery of current and arrears of taxes due under the Act and the seizure of vehicles of the petitioners was, therefore, legal.
Headnote:
MOTOR VEHICLES ACT, 1939 - SECTION 63(7) - KARNATAKA MOTOR VEHICLES TAXATION ACT, 1957 - SECTIONS 3, 3A, 4, 5, 11A, 12, 13, 14, 16 - KARNATAKA MOTOR VEHICLES TAXATION RULES, 1957 - RULES 9, 10, 34 - CONSTITUTION OF INDIA - ARTICLES 226, 301, 304(B) - TOURIST VEHICLES - LEVY OF TAXES - SEIZURE OF VEHICLES - NATURAL JUSTICE - ADVANCE TAXES - ARREARS OF TAXES - LIABILITY OF TRANSFEREE - COMPENSATION - CHECK REPORTS. The petitioners, owners of tourist vehicles registered in other States, challenged the orders of seizure of their vehicles and the demands made against them for payment of taxes under the Karnataka Motor Vehicles Taxation Act, 1957, on the ground that the orders were made without issuing show cause notices and providing them an opportunity of hearing, in violation of the principles of natural justice. The Court held that: (i) The Act by necessary intendment excluded the application of the principle of audi alteram partem for recovery of current and arrears of taxes due under the Act and the seizure of vehicles of the petitioners was, therefore, legal. (ii) However, the petitioners were entitled to a post-decisional hearing before the seizure of their vehicles. (iii) The power of seizure conferred by Section 11A of the Act could be exercised on vehicles registered in this or outside States also. (iv) The Act and the Rules were silent on the determination of arrears of taxes due on a Motor Vehicle to the state. The Act by express terms or by necessary intendment did not also exclude the application of the principles of natural justice to such cases. (v) Before deciding the liability for arrears of taxes under the Act, the requirements of audi alteram partem one of the basic requirements of natural justice was not excluded and was applicable. (vi) The transferee of a vehicle with or without notice of the arrears of taxes due on such vehicle also became liable to pay such arrears. (vii) The petitioners were not entitled to compensation for the seizure of their vehicles as the order of seizure was bona fide and was exercised for purposes of the Act. (viii) The check reports that were challenged did not call for interference as they only set out the facts noticed by the officers in the performance of their duties.
Fact of the Case:
The petitioners, owners of tourist vehicles registered in other States, challenged the orders of seizure of their vehicles and the demands made against them for payment of taxes under the Karnataka Motor Vehicles Taxation Act, 1957, on the ground that the orders were made without issuing show cause notices and providing them an opportunity of hearing, in violation of the principles of natural justice.
Finding of the Court:
The Court held that: (i) The Act by necessary intendment excluded the application of the principle of audi alteram partem for recovery of current and arrears of taxes due under the Act and the seizure of vehicles of the petitioners was, therefore, legal. (ii) However, the petitioners were entitled to a post-decisional hearing before the seizure of their vehicles. (iii) The power of seizure conferred by Section 11A of the Act could be exercised on vehicles registered in this or outside States also. (iv) The Act and the Rules were silent on the determination of arrears of taxes due on a Motor Vehicle to the state. The Act by express terms or by necessary intendment did not also exclude the application of the principles of natural justice to such cases. (v) Before deciding the liability for arrears of taxes under the Act, the requirements of audi alteram partem one of the basic requirements of natural justice was not excluded and was applicable. (vi) The transferee of a vehicle with or without notice of the arrears of taxes due on such vehicle also became liable to pay such arrears. (vii) The petitioners were not entitled to compensation for the seizure of their vehicles as the order of seizure was bona fide and was exercised for purposes of the Act. (viii) The check reports that were challenged did not call for interference as they only set out the facts noticed by the officers in the performance of their duties.
Issues: None
Ratio Decidendi: The Court held that the Act by necessary intendment excluded the application of the principle of audi alteram partem for recovery of current and arrears of taxes due under the Act and the seizure of vehicles of the petitioners was, therefore, legal. However, the petitioners were entitled to a post-decisional hearing before the seizure of their vehicles.
Final Decision: The Court quashed the seizure orders and the orders determining and demanding the arrears of taxes impugned in the cases. However, the Court directed the petitioners to furnish security for the amounts in dispute and also imposed a condition not to further encumber the vehicles and alienate them, till the re-determination proceedings were completed.
( 1 ) ON a reference made by one of us (Puttaswamy, J.) these cases were posted before us for disposal.
( 2 ) AS common questions of law arise for determination in these cases, we propose to dispose of them by a common order.
( 3 ) MOHAMED Hayath, a resident of palamner Town, Chittoor District andhra Pradesh, petitioner No. 2 in writ Petition No. 18958 of 1983 was the registered owner of a passenger transport Motor Vehicle classified as 'tourist vehicle' bearing registration no. A A C 5270 registered in the State of Andhra Pradesh, which was included in an all India Tourist permit issued in his favour by the State, Transport authority of Andhra Pradesh under s. 63 (7) of the Motor Vehicles Act, 1939 (Central Act No. 4 of 1939) (hereinafter referred to as the MV. Act ). Some time in October, 1983 or before petitioner No. 2 obtained the release of the said vehicle from the said permit and has sold the same to Syed Rafiq ahmed of Bangalore, Petitioner no. 1 and on 7-10-1983 the competent officer has also effected the Transfer of Ownership of the said vehicle to the name of the latter in the certificate of registration
( 4 ) ON 7-10-1983 petitioner No. 1 has paid a sum of Rs. 3024 being the tax due on the vehicle to the State of karnataka for the period from 7-10-1983 to 31-10-1983 and was using the same in the State of Karnataka on the strength of a special permit obtained by him under S. 63 (6) of the MV Act.
( 5 ) ON 24-10-1983 one B R Vijayakumar, an Inspector of Motor Vehicles (hereinafter referred to as IMV) attached to the Office of the Regional transport Officer, Bangalore, West hereinafter referred to as the RTO) intercepted the said vehicle at a place called Dasarahalli situated on the outskirts of Bangalore City, checked the same and issued a Check Report on the spot noticing various omissions and commissions in its operation, one of which was that the vehicle was plying without payment of taxes (Annexure-A ). Along with the said check report or immediately thereafter the IMV exercising the powers conferred on him by the Karnataka Motor Vehicles taxation Act, 1957 (Karnataka Act 35 of 1957) (hereinafter referred to as the Act) and the Karnataka Motor vehicles Taxation Rules, 1957, (hereinafter referred to as the Rules) framed under the said Act issued an order for seizing the said vehicle, seized the same and has detained it thereafter. The order of seizure made by the IMV reads thus :"whereas the Tax due under the karnataka Motor Vehicles Taxation act, 1957 has not been paid for the, period from. . . . . No proof for having paid the tax respect of the motor Vehicle bearing registration mark A A C 5270. B. R. Vijayakumar, IMV. RTO (W) as an officer authorised under the said Act, hereby order the seizure of the aforesaid vehicle and detention of the same until the tax due on the vehicle is paid and proof evidencing the payment of tax due is produced". While the said vehicle was under seizure, the RTO has issued an endorsment bearing No. D S A IIAAC 5270 82-1983 dated 27-10-1983 (Annexure-C) to petitioner No. 1 calling upon him to pay a sum of Rs 73,440 being the arrears of tax on the said vehicle from 1-4-1981 to 30-9-1983, which reads thus: endorsement sub; Issue of Check reports in respect of M. V. NO. AAC 5270 and form No. 27. Ref: 1. C/r dt. 24-10-1983. 2. Your Application dated 24-10-1983 requesting to release the M. V. AAC 5270. The registered owner of the. M. V. AAC 5270 is hereby informed that there are 11 check reports. "pending in this Office, against above vehicle. On verification of check reports issued by the IMVS of this Office on 8-10-4982, 11-11-1982 31-10-1982, 27-11-1982 and 17-12-1982. it is evident that the MV AAC 5270 was regularly plying in the State of Karnataka between the two points, with A. I. Tourist Permit No. TVP 28[29 V. T. 21-5-1985 issued by the STA, Hyderabad. . Exemption of M. V. Tax granted, in respect of A1tp. has been withdrawn by Government of Karnataka vide Notificatio
