The liability to pay motor vehicles tax is determined by the validity of the national permit and the authorisation fee paid.

The petitioner is aggrieved by the order of the Regional Transport Officer, Madras-35, dated 212. 1994 by which the said authority, by endorsing a copy of that order to the petitioner required him to pay the motor vehicles tax for the goods carrier TSC 2160 in the sum of Rs.30,500 as home tax for the period from 10. 1992 to 312. 1993 and composite tax of Rs.93,250 payable to other states for the period from 10. 1989 to 33. 1994. It is not in dispute that this vehicle had a national permit whose validity was upto 24. 1994. It is also not in dispute that the previous owner of the vehicle had not applied for authorisation under Rule 17 of the Central Motor Vehicles Rules read with Sec.88, Clause 14 of the Motor Vehicles Act for the period subsequent to 4. 1990.

2. The petitioner has averred that he purchased the vehicle at an auction held by the second respondent - The Tamil Nadu Industrial Investment Corporation Limited, which had financed the third respondent, the previous owner of the vehicle who had defaulted in paying the amounts due to the second respondent-Corporation. The second respondent has averred that it seized the vehicle on 9. 1993 and the vehicle was delivered to the petitioner on 14. 1993. The consideration paid by the petitioner to the second respondent for the purchase of the vehicle is said to be Rs. 1,75,000.

3. The second respondent has stated that the vehicle had been sold in ‘as is where is’ condition including the outstanding liability if any for payment of tax in respect of the vehicle and that if there is any liability, the same has to be discharged by the petitioner alone.

4. The learned counsel for the petitioner submitted that the demand for payment for composite tax for the vehicle for the period from 4. 1990 is patently illegal as the national permit itself ceased to be valid, with the expiry of authorisation which had been granted prior to 4. 1990. Learned counsel referred to clause 48 of the conditions of the permit which specifically states that “permit shall cease to be valid unless the vehicle is covered by a valid authorisation issued by the competent authority.”

5. The authorisation referred to in the permit is the authorisation referred to in Sec.88 (14) of the Motor Vehicles Act and Rule 87 of the Central Motor Vehicles Rules. Sec.88 (14)(a) empowers the Central Government to make rules regulating authorisation fee payable for the issue of permit referred to in Sub-secs.(9) and (12) of Sec.88 although those subsections themselves do not refer to any authorisation. “Authorisation” fee is defined in para (b) of the Explanation following Sub-sec.(14) of Sec.88 as “the annual fee not exceeding Rs 1,000 which may be charged by the appropriate authority of State to enable the Motor Vehicle covered by the permit referred to in Sub-secs.(9) and (12) to be used in other States subject to payment of taxes or fees if any levied by the State Government concerned.”

6. Rule 87 of the Centra] Motor Vehicles Rules prescribes the form in which application for authorisation is to be made namely F.40, and specifies the fee payable as Rs.500. The form in which the authorisation is to be granted is prescribed by Rule 87 (2) and that is in Form No.47. The period of validity of the authorisation is specified in Sub-rule (3) of Rule 87 as not exceeding one year. Form 46 requires the applicant to furnish information regarding the vehicle and also requires the applicant to enclose bank draft to that application for the amount of the authorisation fee along with the application. Form No.47 provides for authorising the use of the vehicle in the State to be named subject to the payment of taxes by the permit holder to the respective states.

7. Though the object of levying authorisation fee appears to be merely to ensure collection of additional revenue to the State concerned by way of collecting authorisation fee even after the permit has been issued, nevertheless the validity of the permit is made subj