2020 Supreme(Kar) 619

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Alok Aradhe, M. Nagaprasanna, JJ.
State Of Karnataka - Appellant
Versus
K.T. Rajashekar - Respondent
Writ Appeal No. 4152 of 2009, 4150 of 2009, 4151 of 2009, 3234 of 2010, 3575 of 2010, 4805 of 2011, 17395 of 2011, 17446 of 2011; Writ Petition No. 10489 of 2007, 4658 of 2008, 4166 of 2008, 10489 of 2007, 4658 of 2008, 34236 of 2010, 34288 of 2010
Decided On : 18-03-2020

Headnote:

Motor Vehicles Act, 1988 - Karnataka Motor Vehicles Taxation Act, 1957 - Section 15 - Karnataka Motor Vehicles Taxation Act, 2007 - Principal Act - Section 7 – Motor accident claim - Private Service Vehicle - Whether a statute which was earlier declared unconstitutional can be given retroactive operation through fresh validating legislation enacted by legislature - Whether a writ of mandamus can be issued to State Government to refund amount despite upholding validity of Karnataka Motor Vehicles Taxation Act, 2007 - Whether expressed or implied for use of such vehicle as a whole for carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorized by him in this behalf on a fixed or an agreed rate or sum - Whether or not with reference to any route or distance - Whether vice pointed out by Court and invalidity suffered by previous law is cured complying with legal and constitutional requirements - Petitioner entered into lease agreement with Tata InfoTech Ltd. for a period of three years - Under aforesaid agreement consideration in respect of each vehicle per calendar month which was payable by company to petitioner - Petitioner under agreement was under an obligation to transfer ownership of vehicle in favor of Tata InfoTech Ltd - Vehicles were to be used for purpose of providing transportation facilities to employees of company to travel from residence to place of work and back to their residence without collecting any amount from them - Regional Transport Officer issued a show cause notice to petitioner who was informed that as per pre-audit enquiry report tax paid on vehicles treating vehicles as private service vehicles is not proper and it should be treated as contract carriages and petitioner was called upon to show cause as to why difference of tax should not be collected – Held, Court have considered submissions made on both sides and have perused record - In backdrop of aforesaid well settled legal principles facts of case in hand may be seen - From perusal of agreements entered into between companies industrial undertakings as well as private operators it is axiomatic that companies and industrial undertakings had procured motor vehicles either on ostensible ownership and allowed private operators who were actual owners to operate vehicles as if vehicles were being operated on behalf of companies / undertakings - From agreements it is evident that in fact under agreements vehicles of transport operators were hired by companies and they had taken shelter under definition of expression private service vehicle – Thus aforesaid arrangement was a colorable device adopted by vehicle owners in order to pay taxes at a lower rate – Thus aforesaid arrangements were made with sole intention to deprive government of revenue which was legitimately due and therefore amendments were made to ensure that aforesaid vehicles are treated on par with contract carriages - A private service vehicle under Section 2 (ee) of Act has been defined to be a vehicle which is being plied on behalf of owner and passengers are not being carried for hire or reward - Section 2(7) of Act, which deals with contract carriages provides that a vehicle can be said to be a contract carriage only if it carries passengers for hire and reward - A division bench of this court vide judgment and other connected matters between parties to present lis had passed an interim order and had allowed writ appeal on ground that if a vehicle is being plied on behalf of owner and passengers are not being carried for hire or reward then vehicle cannot be treated as private service vehicle and no tax can be levied on such a vehicle treating same to be a contract carriage - A validating Act may even make ineffective judgments or orders of competent courts provided that it by retrospective legislation remove cause of invalidity or basis which had led to those judgments - In instant case by enacting aforesaid provisions State Legislature has removed basis of judgment rendered by a division bench of this court and has cured invalidity on basis of which judgment was rendered by division bench – Therefore Validating Act being well within legislative competence of State Legislature and having removed basis of judgment rendered by a division bench of this court same cannot be held to be ultra virus - Admittedly in instant case a division bench of this court passed an interim order by which it was provided that in case petitioner succeeds respondents shall be liable to refund of amount of tax collected with interest – Eventually by judgment writ appeals were allowed and judgment passed by division bench was upheld by Supreme Court – Thus decision between parties had attained finality and was binding on parties and therefore judgment passed by division bench of this court could not have been overruled by way of a legislative measure viz., Validating Act in view of law laid down by Supreme Court in case of Medical Council Of India vs. State of supra – Admittedly petitioners are making payment of tax which is in respect of vehicles in question at rate which is payable by owners of contract carriages - However rights and liabilities of parties have already attained finality by judicial adjudication for a period – Therefore impugned amendment insofar as it pertains to collection and levy of tax at rate which is payable in respect of contract carriages which has been recovered from petitioners in light of interim order passed by division bench of this court as well as judgment of division bench and fact that aforesaid judgment has attained finality court hold that legislature cannot overrule judicial decision which has attained finality by a legislative measure - Appeals are disposed of