Back
2004 Supreme(Kar) 637
Karnataka High Court
SHARMA TRANSPORTS, BANGALORE - Appellant
Versus
STATE OF KARNATAKA - Respondent
Decided On : 11-18-04
W.P. : 20366 of 2002
B.L.SANJEEV, C.B.SRINIVASAN, PARTHASARATHY
Headnote:Constitution of India -Locus standi -Articles 226 & 227 - Locus standi - A cess was levied under the Karnataka Motor Vehicles Taxation Act, 1957 -Petitioner a transport operator -Held, certainly he has locus standi to question such levy. [R. Gururajan, J]: The petition cannot be thrown on the ground of locus in the light of a proper concept of locus in writ petitions. If a right of a litigant is affected, he has every right to move a writ court u/s.226 of the constitution. In the case on hand, the operations cannot be said to be foreigners or strangers in terms of the Apex Court rulings to the collection of cess in terms of the Statute in the case on hand. The collection and levy of cess has its own impact on the business of the operations. They have some connection with the cess in the given circumstances. In these circumstances, it cannot be said that they have no locus at all as argued by the learned Advocate General. The locus argument is therefore rejected.
Cases Referred:
Followed:2000(7) SCC 555; (2002)1 SCC 33; (2004) 5 SCC 155; AIR 1975 SC 583; (2002) 2 SCC 188.
Legality of cess
Karnataka Motor Vehicles Taxation Act, 1957 - Section 3-A -Legality of cess -Cess levied and collected for Bangalore Mass Rapid Transport System -Later period of levy extended for investment in Karnataka Infrastructure Development Finance Corporation -In objections State stated that, cess levied was utilised for various other purposes -Held, unless, the cess is utilised for the purpose for which it is levied, the levy becomes unconstitutional as it loses its nexus.
[R. Gururajan, J]: There should be existence of a specific, identifiable object behind the levy and a nexus between the subject and the object of the levy. It is also clear from these Judgments that the state has to justify in the matter of tax. A mere preamble is not sufficient. In terms of the affidavits in the court, the state Government has failed to justify its collection in terms of the material facts available on record.
Cases Referred:
Followed:2000(7) SCC 552; (2002)1 SCC 33; (2004) 5 SCC 155; AIR 1975 SC 583; (2002) 2 SCC 188.
Locus standi
Constitution of India - Articles 226 & 227 - Locus standi - A cess was levied under the Karnataka Motor Vehicles Taxation Act, 1957 -Petitioner a transport operator -Held, certainly he has locus standi to question such levy.
[R. Gururajan, J]: The petition cannot be thrown on the ground of locus in the light of a proper concept of locus in writ petitions. If a right of a litigant is affected, he has every right to move a writ court u/s.226 of the constitution. In the case on hand, the operations cannot be said to be foreigners or strangers in terms of the Apex Court rulings to the collection of cess in terms of the Statute in the case on hand. The collection and levy of cess has its own impact on the business of the operations. They have some connection with the cess in the given circumstances. In these circumstances, it cannot be said that they have no locus at all as argued by the learned Advocate General. The locus argument is therefore rejected.
Cases Referred: Followed:2000(7) SCC 555; (2002)1 SCC 33; (2004) 5 SCC 155; AIR 1975 SC 583; (2002) 2 SCC 188.
Refund of cess
TAXATION - Refund of cess -Levy declared as unconstitutional -Petitioner a transport operator has not pleaded that, the levy was not passed on to travelling public -Hence, cannot be ordered to refund.
[R. Gururajan, J]: In the writ petition, the petitioner, nowhere says that he has not passed on the cess to its consumers while collecting the bus fare for travel in the impugned vehicles. The petition is silent. The court can presume in the light of no specific statement of no passing off of the cess on the consumer that the petitioner ought to have passed on the same to the traveling public. The learned Advocate General is therefore right that the petitioners ought to have passed on the cess to the traveling public. In these circumstances, it is not possible for this court to order refund to the petitioner in the given circumstances in terms of the averments made in the petition. Therefore, the prayer for refund is rejected
( 1 ) THESE petitions are directed against the levy and collection of 5% cess-tax levied under Section 3 of the Karnataka Motor Vehicles taxation Act, 1957 and Section 3-A of the Karnataka Act 7 of 1995 as illegal, unconstitutional and void. The petitioner wants a refund of tax made over by the petitioner for the schedule vehicles in terms of the schedule from 1-4-1995 till First Quarter and under Act 4 of 2002 effective from 15-4-2002.
( 2 ) THE pleadings of the parties are as under: the first respondent introduced an amendment to the Karnataka motor Vehicles Taxation Act, 1957. By an amendment a new power to imposition of cess was statutorily introduced. The amendment by Act no. 7 of 1995 inserted Section 3-A. Annexure-A is the notification. Section 3-A purported to levy and collect by way of cess-tax at the rate of 5% on the Motor Vehicles Tax levied under Section 3 of the Act. The purpose of the cess was for the Bangalore Mass Rapid Transit System. The said amendment was challenged in this Court in several petitions. Petitions were dismissed by this Court. Annexure-D is the order of the division Bench. Thereafter, the first respondent introduced an amendment by Act 4 of 1998 by which the purpose of levy for Bangalore mass Rapid Transit System was sought to be changed to "for a period of two years with effect from 1-4-1998 for equity investment in the karnataka Infrastructure Development Finance Corporation. Annexure-C is the notification. The petitioner states that there has been no such utilisation for the said purpose. Apart from the fact the karnataka Infrastructure Development and Finance Corporation has nothing to do with either the maintenance, improvement or the creation of roads in terms of the Karnataka Motor Vehicles Taxation Act, 1957. Tax is illegal and without authority of law. By Act No. 6 of 2000, the state Government introduced another amendment to Section 3-A. By this there was a substitution of four years for two years. Annexure-D is the notification. In view of the combined operation of Act 4 of 1998 and act 6 of 2000, the authority to levy cess-tax of 5% on the Motor Vehicles tax was to be upto 31-3-2002. By Act 4 of 2002 there has been an amendment to Section 3-A by which it has been extended up to six years. Annexure-E is the notification. The petitioner says that there has been a Repeal Acts 4 of 1998 and 7 of 1995. The petitioner has filed the repealing and Amending Act, 2000 in terms of Annexure-F. According to the petitioner, the levy is illegal and the petitioner is entitled for refund. The petitioner says that the levy of cess can be justified only when it is compensatory. The levy and collection of tax for the purpose of bangalore Mass Rapid Transit System has turned out to be only a mirage. No such Bangalore Mass Rapid Transit System was brought out as a physical fact in Bangalore. The petitioner also asserts that the change of purpose with effect from 1-4-1998 for the collection of cess-tax for "equity investment in the Karnataka Infrastructure Development and Finance Corporation" is unconstitutional. There is no nexus. 'the petitioner further states that there has been a total failure on the part of the first respondent to fulfill the Constitutional obligation of imposition of tax with the authority of law and its utilisation for the proclaimed purpose. The collection of tax under Section 3-A is thus unconstitutional.
( 3 ) RESPONDENTS have entered appearance. Statement of Objection has been filed on 26-9-2002. In the objection statement, it is stated in para 2 that collection of cess-tax is for the purpose of Development of Bangalore mass Rapid Transit System and is now extended to the entire State. It is also stated that the argument of no nexus is not correct. The respondent further says that the Division Bench ruled that the levy of cess had been for a limited period as per the amended Act, is appropriate. Insofar as repeal is concerned, the respondent justifies that what
