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1987 Supreme(Bom) 200
IN THE HIGH COURT OF BOMBAY
(Nagpur Bench)
V.A. Mohta W.M. Sambre, JJ.
Madhukar Balkrishna Badiye others.... Petitioners.
Versus
State of Maharashtra others.... Respondents.
Writ Petition Nos. 941, 986 of 1986 1012 of 1987, decided on 9/10-7-1987.
Advocates Appeared :
M.B. Badiye (in person) C.G. Madkholkar, for petitioner in W.P. 941/87.
V.R. Manohar and Anand Parchure, for petitioners in W.P. 986/87.
P.C. Marpakwar, for petitioners in W.P. 1012/87.
A.S. Bobde, A.G. and B.P. Jaiswal, A.G.P., for respondent in all three petitions.
Headnote:BOMBAY MOTOR VEHICLES TAX ACT, 1958
Section 3 (1) (b) -Validity of-Section providing for imposition of levy at thrice the rates on vehicles Irrespective of their type -Owned and or possessed by firms and companies-Two varieties of owners-Commercial and non-commercial-Companies and firms being commercial concerns vehicle owned by them are used by more than one person and too frequently -Classification to be tested on generalities and not possible exceptions-Classification bas nexus to the use of road.
All that remains to be considered is the validity of Section 3 (1) (b) of the Act providing for imposition of levy at thrice the rates on vehicles irrespective of their type-owned and/or possessed by firms and companies. It is not understood as to why that provision is discriminatory of arbitrary. It has already been noticed as to how it is permissible for the State to distribute the tax burden on different class of persons on whose shoulders the burden has to be placed. Two varieties of owners-commercial and noncommercial are district class. All that is required to be seen is whether there is any nexus between the classification and the purpose of the levy. Contention is that considering the nature of taxation it must depend upon the type of vehicle using the public road and not upon the person who owns it. The contention though appearing impressive in the first flush is illusory. State has given valid reason for this classification. It is to the effect that firms and companies are essentially commercial concerns and generally vehicle owned by them is used by more than one person and that too more frequently. True it is that in a given case vehicle owned by other categories of owners may use the vehicle more than the one owned by firms and companies; but validity of classification has to be tested on generalities and not possible exceptions. Thus classification has nexus to the use of the road and therefore, valid.
BOMBAY MOTOR VEHICLES TAX (SECOND AMENDMENT) ACT, 1987
Sections 3 (1-B) and 4-Constitution of India, Articles 14 and 19 (1)(g) - Imposition of tax-Law of taxation cannot be termed as being discriminatory.
A law of taxation cannot be termed as being discriminatory because different rates of taxation are prescribed in respect of different items. Provided it is possible to bold that the said items belonging to district and separate groups and that there is a reasonable nexus between the classification and the object to be achieved by the imposition of difference rates of taxations. The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidity.
Seventh Schedule, Entry 57, List II-Bombay Motor Vehicles Tax Act, 1958, Section 3 (1-e) and (3) -Bombay Motor Vehicles Tax (Second Amendment) Act, 1987, Section 3 (1-B) and (4) and Section 9(6)-Imposition of onetime tax on the whole life time of a motor cycle and tricycle by Amending Act No refund on ground of non-use Refund only in case of cancellation of registration on account of scrapping or due to accident etc-For such vehicles provisions of Section 3(1-B)(2) and (3) do not apply-Amending Act imposes road tax end when it does not use public -road - Held that in such case levy was declared confiscatory in character.
By the Amending Act, one-time tax on the whole lifetime of a motorcycle and tricycle at the rates specified in the Schedule has been imposed. It takes away the provision of refund of taxes of such vehicles on the ground of non-use and provides for refund only in case of cancellation of registration of the vehicle on account of scrapping of it due to accident or any other reason. For vehicles governed by one time tax, provisions of Section 3 (1-B) (2) and (3) do not apply. The question of enquiry or issuance of prescribed certificate about non use does not arise whatever be the factual position. Provisions of refund contained in Section 9(1) to (5) for the period of non use do not apply to such vehicles. Refund is permissible in their cases only if (i) registration is cancelled on account of their scrapping due to accident or any other reason and (ii) removal of vehicle to other State as specified. Thus it is very plain that the Amendment Act imposes road tax on a vehicle even when it does not use the public road. Therefore, in such case the levy is declared as confiscatory in character and, therefore, beyond the legislative competence of the State Legislature.
"57. Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of Entry 35 of List III."
"35. Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied."
Two enactments, (i) The Motor Vehicles Act, 1939 a Central Act, and (ii) The Bombay Motor Vehicle Tax Act 1958, a State Act, govern ownership and/or possession of 'motor vehicles' a term defined under section 2(1-B) of the Central Act and adopted by section 2(2-B) of the State Act. The Central Act has not laid down any principles on which taxes on motor vehicles are to be levied. The State Act is made to consolidate and amend the law relating to the taxation of motor vehicles in the State. Section 2(2-B) defines the term 'motor vehicle', section 2(4) defines 'quarter' and section 2(10) is a residuary provision mentioning that the words and expressions used, but no defined in the State Act will have the meanings respectively assigned to them in the Central Act. Section 3(1), which is a charging section, reads thus :
"3(1). Subject to the other provisions of this Act, on and from the 1st day of April, 1958 there shall be levied and collected on all motor vehicles used or kept for use in the State a tax at the rate fixed by the State Government, by notification in the Official Gazette, but not exceeding the maximum rates specified in the First Schedule."
Section 3(1) gives the details of taxation on certain vehicles owned by certain persons. Section 3(1)(b) provides that vehicles owned by firms and/or Companies would be taxed at thrice the rates fixed for others. Sub-section (2) of section 3 provides for giving an advance intimation in writing to the Taxation Authority in the prescribed manner that the vehicle will not be used or kept for use in the State during any period specified in the intimation. It permits the Taxation Authority to issue in a prescribed manner a certificate that such motor vehicle was not used or kept for use in the State during the period specified in the said certificate. First proviso to this sub-section says that in case a vehicle is rendered incapable of being used or kept for use on account of any accident, mechanical defect or any other sufficient cause, which makes it impossible to give an advance intimation then such intimation may be given in the prescribed manner within a period of seven days from the date of occurrence of such accident, or such other cause. The second proviso deals with the situation where intimation is received after the commencement of the period on non-use and before the expiry of the said period. Sub-section (3) gives an overriding authority to the Transport Commissioner to give in a proper and genuine case such certificate even with retrospective effect. Section 4 deals with the manner of payment of tax. It has to be paid in advance at the annual rate or for each "quarter" at one forth of the annual rate plus ten percent of the amount, that amount being referred to as 'quarterly rate'. Section 6 provides for making some declarations about the vehicle at the time of deposit of the tax. Section 9 deals with the subject of refund. It read thus :
"9(1). Where any tax is paid in advance for any period in respect of a motor vehicle and where the registered owner surrenders to the Taxation Authority the certificate of taxation issued in respect of such vehicle declaring that he will not, during the whole or part of the unexpired portion of the period for which tax has been paid use or keep for use in any public place in the State the motor vehicle from the date specified in the declaration, such owner shall, on application made in that behalf, and subject to such conditions
