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2017 Supreme(Ori) 687
IN THE HIGH COURT OF ORISSA, CUTTACK
B.R. SARANGI, J.
Odisha Automobiles Dealers Association (OADA) – Petitioner
Versus
State of Odisha and Another – Opp. Parties
W.P.(C) NO. 5648 OF 2017
Decided On : 18-05-2017
For the Petitioner:Mr. A.K. Parija, Sr. Advocate along with M/s S. Mohanty, S.P. Sarangi, D.K. Das, P.K. Das, V. Mohapatra, and T. Pattnaik, Advocates, Mr. R.P. Kar., Mr. J. Pal., Mr. G. Mukherjee, Mr. S. Pani (for petitioners in different connected writ petitions)
For the Opp. Parties : Mr. B.K. Sharma. Standing Counsel (Transport Department)
Headnote:1. ORISSA MOTOR VEHICLE TAXATION ACT, 1975 - Sec. 5 - A dealer is liable to pay tax in advance in respect of vehicle in his possession in the course of his business under the authorisation of trade certificate granted under the Rules, 1989 - Quantum of tax has also been fixed to be paid by a dealer under the said provision - If any tax due is not paid as provided under the Act, the same shall be recovered by way of penalty u/s. 13 of the Act and recovery made u/s 14 of the Act.
Tax at an annual rate specified therein shall be paid in advance by the dealer in motor vehicle in respect of vehicles in his possession in the course of his business under the authorization of trade certificate granted under the Rules, 1989. The provision is very clear that the dealer is liable to pay the tax in advance in respect of vehicles which he is in possession in course of his business under the authorization of trade certificate. Unless the vehicle is possessed by a dealer, the same cannot be sold. Unless the vehicle is sold, the same cannot be registered. Therefore, possession of a vehicle by a dealer in course of his business and sale thereof and consequential registration of vehicles are intrinsically connected to each other. For the purpose of possession of the vehicle in course of business, tax is being levied under Section 5 of the Orissa Motor Vehicles Taxation Act, 1975, but, when the vehicle is sold, the information is given by the dealer under Form-21 and basing upon which an application is made by the buyer in Form-20 so that the same can be registered by the registering authority.
2. ORISSA MOTOR VEHICLE TAXATION ACT, 1975 - Sec. 5 - Expression “vehicle in possession in the course of his business” - It has its wide implication - In course of transaction, which necessarily precedes procurement, possession, sale and registration of the vehicle, is a continuity of business - Once the vehicle is in possession in course of the business of a dealer under the authorisation of trade certificate, at the end of twelve months, if it is ascertained that the dealer was in possession of vehicles in excess of the number indicated in the trade certificate for which no advance tax has been collected, in that case, the dealer is liable to pay the tax in consonance with the circular issued by the opp. parties - Under a trade certificate, the dealer is obliged to retain the number of vehicle mentioned therein and not beyond that at a given point of time, but that ip so facto cannot disentitle him to pay tax in respect of the vehicles in his possession in course of business.
The expression “in course of” indicates that the dealer is liable to pay the tax in respect of vehicle in his possession in course of his business under the authorisation of trade certificate - Vehicles in possession in course of his business which implies a period of time during which the movement was in progress, but postulates also an indicated relation under the authorisation of trade certificate is liable for taxation u/s. 5 of the Act itself.
JUDGMENT :
DR. B.R. SARANGI, J.
1. Odisha Automobiles Dealers Association (“OADA”), the petitioner herein, being a trust registered under the District Sub-Registrar, Khurda, has filed this writ application seeking to challenge the communication dated 29.03.2016 in Annexure-2 issued by the Transport Commissioner-cum- Chairman, State Transport Authority (STA) instructing all the Regional Transport Officers (RTOs) to collect tax from the dealers/manufacturers on the basis of the total number of vehicles possessed and registered during the entire year, as well as consequential demand notices in Annexure-3 series issued by the RTOs.
2. At the outset, it is of relevance to mention that several writ petitions had been filed by individual dealers challenging the selfsame circular dated 29.03.2016 on different grounds. Although all those writ petitions were taken up for hearing together with this writ petition, with the consent of learned counsel for the parties, this writ petition was chosen as a lead case to be decided first by giving opportunity to all the counsel appearing in different writ petitions to present their case so that the judgment which would be passed in the instant writ petition would govern the batch of cases. Since pleadings between the parties have been exchanged, with the consent of learned counsel appearing for parties, this writ petition is being disposed of finally at the stage of admission.
3. The communication dated 29.03.2016 in Annexure-2 issued by the Transport Commissioner-cum-Chairman, State Transport Authority (STA), by which the petitioner trust is essentially aggrieved, reads thus:
“No. 4775/TC
LVI -41/2016
Dated 29.03.16
To
All Regional Transport Officers
Sir,
It is observed that there is huge leakage of M.V. revenue at dealer/manufacturer points while collecting tax for vehicle in their possession.
As per the Rule-35 of CMVR-1989 an application for the grant/renewal of trade certificate shall be made in form-16 accompanied by appropriate fees as specified in Rule-81 by the dealer/manufacturer. Separate application shall be made for each class of vehicle as per rule 34 of CMV Rules. On receipt of application from the dealers the grant/renewal of trade certificate is issued under Rule-35 of CMVR-1989 by the Registering Authority to the dealers/manufacturers.
Accordingly under Rule-36 of OMV Rule 1993 (1) The manufacturer/dealer shall furnish to the registering Authority having jurisdiction in the locality with the information in Form XIII & XIV, in respect of the vehicles received in stock & sold by him during the every month by 15th of the succeeding months.
(2) The manufacturer/dealer should furnish the copy of the certificate in form-21 prescribed under rule-47 of CMV Rule- 1989 to the registering authority & the concerned region when the vehicle is intended to be registered.
All the dealers or manufacturers are bound to submit monthly returns in form-XIII & XIV under rule- 36 of OMV-1993. A certificate in form-XIV are being furnished to the registering authority that the maximum nos of vehicles covered under the trade certificate has never been exceeded at any point of time. This need to be obtained from each dealer/manufacturer, scrupulously.
Section-5 of OMVT act 1975 entails that – Notwithstanding the provisions contained in [Section 3, 3-A, 4, 4-A or 4-B], a tax at the annual rate specified below shall be paid in advance by a manufacture of dealer in Motor vehicles in respect of the vehicles in his possession in the course of his business as such manufacture or dealer under the authorization of trade certificate granted under the Motor Vehicles Rules.
While reviewing the mv revenue collection of different RTOs, it is found that the tax are being collected in advance from the dealers for the nos. of vehicles mentioned in their trade certificate which is not in conformity with the total no of registration
