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High Court Of Calcutta
Bhaskar Bhattacharya
SOUMITRA BANERJEE - Appellant
Versus
STATE OF WEST BENGAL - Respondent
G. A. 4474 Of 2003
Decided On : 03/26/2004
MOTOR VEHICLES TAX ACT - ADDITIONAL TAX AND ONE-TIME TAX ON MOTOR VEHICLES (AMENDMENT) ACT, 2003 - WEST BENGAL MOTOR VEHICLES TAX (AMENDMENT) ACT, 2003 - WEST BENGAL ADDITIONAL TAX AND ONE-TIME TAX ON MOTOR VEHICLES (SECOND AMENDMENT) ACT, 2003 - CONSTITUTION OF INDIA, 1950 - ARTICLE 254, 304(B) - CONSTITUTIONALITY - VALIDITY - INTERPRETATION - TAXATION - LEVY OF TAX - ONE-TIME TAX - LIFE-TIME TAX - CLASSIFICATION - REASONABLENESS - CONFISCATORY - PRESIDENTIAL ASSENT - SCOPE AND APPLICABILITY. The West Bengal State Legislature enacted the West Bengal Additional Tax and One-time Tax on Motor Vehicles Act, 1989 (1989 Act) prescribing additional tax on motor vehicles and a one-time tax on motor cycles less than 15 years old in the State of West Bengal. Subsequently, by way of amendment, provisions contained in sections 9a and 9b were introduced. Section 9a provided for the payment of life-time tax in lieu of annual tax leviable under the West Bengal Motor Vehicles Tax Act, 1979 (1979 Act) and under the 1989 Act. Section 9b provided for a one-time tax for a period of 5 years in lieu of annual tax leviable under the 1979 Act and the 1989 Act on motor cars and omnibuses not being transport vehicles. The amendments virtually gave rise to the filing of writ applications challenging the validity of the impugned legislation.
Fact of the Case:
The petitioners challenged the constitutional validity of the West Bengal Additional Tax and One-time Tax on Motor Vehicles (Amendment) Act, 2003 (West Bengal Act XIV of 2003), the West Bengal Motor Vehicles Tax (Amendment) Act, 2003 (West Bengal Act XIX of 2003) and the West Bengal Additional Tax and One-time Tax on Motor Vehicles (Second Amendment) Act, 2003 (West Bengal Act XX of 2003). The petitioners contended that the impugned legislation was unconstitutional on several grounds, including the lack of Presidential assent, the absence of a provision for refund of life-time tax or one-time tax in case the vehicle is unable to ply on the road for a temporary period for any reason, and the imposition of life-time tax beyond the period of registration.
Finding of the Court:
The Court held that the impugned legislation was unconstitutional on the following grounds: * The State Legislature was incompetent to enact the impugned provisions in exercise of powers conferred on it by virtue of serial No. 57 of the List II of the Seventh Schedule of the Constitution. * Even if the impugned provisions were not confiscatory but regulatory or compensatory, they were not applicable to the motor cycles which have already been levied one-time tax, as imposition of life-time tax on those vehicles was arbitrary and violative of Article 14 of the Constitution of India. * Even if the impugned provisions were held to be regulatory or compensatory, the Bill proposing the amendment not having been introduced after complying with the proviso to Article 304 (b) of the constitution and such defect, even not having been cured by taking subsequent assent of the President of India, those provisions were invalid.
Issues: 1. Whether the impugned legislation was unconstitutional for lack of Presidential assent? 2. Whether the impugned legislation was unconstitutional for the absence of a provision for refund of life-time tax or one-time tax in case the vehicle is unable to ply on the road for a temporary period for any reason? 3. Whether the imposition of life-time tax beyond the period of registration was unconstitutional?
Ratio Decidendi: 1. The State Legislature was incompetent to enact the impugned provisions in exercise of powers conferred on it by virtue of serial No. 57 of the List II of the Seventh Schedule of the Constitution. The impugned provisions were confiscatory in nature and thus, the State legislature was incompetent to enact such provisions. 2. Even if the impugned provisions were not confiscatory but regulatory or compensatory, they were not applicable to the motor cycles which have already been levied one-time tax, as imposition of life-time tax on those vehicles was arbitrary and violative of Article 14 of the Constitution of India. 3. Even if the impugned provisions were held to be regulatory or compensatory, the Bill proposing the amendment not having been introduced after complying with the proviso to Article 304 (b) of the constitution and such defect, even not having been cured by taking subsequent assent of the President of India, those provisions were invalid.
Final Decision: The Court disposed of the writ applications with the following declarations: * The provisions contained in sections 9a and 9b of the 1989 Act as amended in 2003 are confiscatory in nature and thus, the State legislature was incompetent to enact such provisions in exercise of powers conferred on it by virtue of serial No. 57 of the List II of the Seventh Schedule of the Constitution. * Even if it is assumed for the sake of argument that section 9a of 1989 Act as amended in 2003 is not confiscatory but regulatory or compensatory, such provision is not applicable to the motor cycles which have already been levied one-time tax, as imposition of life-time tax on those vehicles is arbitrary and violative of Article 14 of the Constitution of India. * Even if sections 9a and 9b as amended in 2003 are held to be regulatory or compensatory, the Bill proposing the amendment not having been introduced after complying with the proviso to Article 304 (b) of the constitution and such defect, even not having been cured by taking subsequent assent of the President of India, those provisions are invalid. The State respondents were restrained from enforcing those provisions. Tax already paid on the basis of those invalid legislations including penalty, if any, was ordered to be refunded to the tax payers within two months from the date of the order with interest from the date of acceptance of tax till date of refund.
( 1 ) ALL these writ applications were taken up together as common questions of law are involved in all these matters.
( 2 ) BY these applications, the petitioners have challenged the West Bengal additional Tax and One-time Tax on Motor Vehicles Tax (Amendment) Act, 2003 (West Bengal Act XIV of 2003), the West Bengal Motor Vehicles Tax (Amendment) Act, 2003 (West Bengal Act XIX of 2003) and the West Bengal additional Tax and One-time Tax on Motor Vehicles (Second Amendment) Act, 2003 (West Bengal Act XX of 2003 ).
( 3 ) TO appreciate the contentions raised by the parties, it is necessary to state a brief history of promulgation of the statute relating to tax on Motor vehicles in West Bengal.
( 4 ) PRIOR to independence, the Bengal Motor Vehicles Tax Act, 1932 (Bengal act I of 1932) was the taxing statute by virtue of which taxes were imposed upon motor vehicles. After the coming into operation of our Constitution, the west Bengal State Legislature in 1979 enacted West Bengal Motor Vehicles tax Act, 1979 (hereinafter referred to as the "1979 Act") thereby repealing the bengal Motor Vehicles Act, 1932. 1979 Act was legislated by virtue of power conferred upon the State Legislature by the Seventh Schedule of the Constitution of India vide serial No. 57 of List-II read with serial No. 35 of List-Ill, the concurrent list.
( 5 ) SECTION 3 of 1979 Act imposes a duty upon every owner of a registered motor vehicle or every person who keeps in his possession or control any motor vehicle to pay tax on such vehicle at the rate specified in the Schedule of the act. According to section 4 of such Act, the tax payable under section 3 should be paid for a year and in advance by the person liable to pay tax within such period as may be determined by the taxing officer. Sub-section (3) of section 4 of such Act gives power to the taxing officer to refund tax already paid to the extent indicated therein if such officer is satisfied that certificate of registration and the token delivered under section 8 on payment of tax in respect of a motor vehicle had been surrendered or that the motor vehicle had not been used or kept for use for any complete calendar month.
( 6 ) DURING the subsistence of the 1979 Act, the West Bengal State Legislature enacted the West Bengal Additional Tax and One-time Tax on Motor Vehicles act, 1989 (hereinafter referred to as the "1989 Act") thereby prescribing imposition and levy of additional tax on motor vehicles and a one-time tax on motor cycles less than 15 years old in the State of West Bengal; section 9 of 1989 Act did away with the duty to pay annual tax under 1979 Act in respect of motorcycles less than fifteen years old and created an obligation to pay a onetime tax specified in Schedule II in lieu thereof when applying for first registration or assignment of fresh registration mark or change of address on removal of the motor cycle from another state. However, motor cycles more than 15 years old were not required to pay such one-time tax but were obliged to pay annual tax in accordance with 1979 Act. Subsequently, by way of amendment, the provisions contained in sections 9a and 9b were introduced.
( 7 ) ACCORDING to section 9a notwithstanding anything contained in the said act, the owner of any motor cycle being less 15 years old when applying for first registration or assignment of fresh registration mark or change of address on removal of the motor cycle from another State other than West Bengal on or after the date of coming into force of West Bengal Additional Tax and One-time tax on Motor Vehicles (Amendment) Act, 1992 should pay one-time tax as specified in Schedule III in lieu of any tax payable under 1979 Act or under 1989 Act. Thus, from the date of coming into operation of the amendment, the rate of one-time tax was enhanced to rate mentioned in Schedule III from those mentioned in Schedule II.
( 8 ) SECTION 9b, on the other hand, provides that a one-time tax for a per
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