Permits granted under the Motor Vehicles Act remain valid during appeal periods, negating tax demands for operating without valid permits.

1. This is a petition under Art.226 of the Constitution of India.

2. The material facts giving rise to this petition, briefly, are as follows : The petitioner was granted by the State Transport Authority, Maharashtra, a permit under the Motor Vehicles Act , 1939 (hereinafter called the Act) for plying stage carriages on the route Nagpur-Warud via Pandhurna, for a period of three years expiring on 30-6-1984. A part of the aforesaid route falls within the State of M.P. and is, therefore, Inter-State route and is covered by an agreement entered into between the State of Maharashtra and the State of Madhya Pradesh under the provisions of S.63-A of the Act. As required by S.63(1) of the Act, the permit granted to the petitioner as aforesaid, was countersigned by the State Transport Authority, Madhya Pradesh. The application for renewal of the aforesaid permit submitted by the petitioner, was rejected by the State Transport Authority, Maharashtra. Hence the petitioner preferred an appeal before the State Transport Appellate Tribunal, Maharashtra and also obtained a temporary permit for plying stage carriages on the aforesaid route from 2-7-1984 to 31-10-1984.
The temporary permit issued to the petitioner, was countersigned by the State Transport Authority, Madhya Pradesh. In the meanwhile, on 13-10-1984, during the pendency of the appeal preferred by the petitioner before the State Transport Appellate Tribunal Maharashtra, the Tribunal passed an order u/s 134(1-A) of the Act directing that the permit, renewal of which was refused, would continue to be valid until the disposal of that appeal. In pursuance of the direction, the State Transport Authority Maharashtra, issued an authorisation letter to the petitioner to operate on the route in question and the authorisation was countersigned by the State Transport Authority, Madhya Pradesh, on 15-11-1984. Subsequently, by order dt. 15-3-1985, the appeal preferred by the petitioner was allowed. Consequently, the permit in question granted to the petitioner, was renewed for a further period of three years and the permit so renewed, was countersigned by the State Transport Authority, Madhya Pradesh. On 6-9-1986, respondent 1, the Tax Officer-cum-Regional Transport Officer Jabalpur, issued a notice to the petitioner to show cause why action be not taken against the petitioner for recovering a sum of Rs. 22,97,362.00 by way of additional tax for having plied passenger bus on the aforesaid inter- State route from 1-11-84 to 31-3-1985 in the absence of a valid permit duly countersigned by the State Transport Authority, M.P. The petitioner showed cause and contended that the substantive permit granted to the petitioner by the State Transport Authority, Maharashtra, was counter-signed by the State Transport Authority, M. P.; that the temporary permit granted to the petitioner from 2-7-84 to 31-10-84 was also counter-signed by the State Transport Authority, M.P.; that in the appeal preferred by the petitioner before the State Transport Appellate Authority Maharashtra, from the order rejecting the application for renewal of permit, the Appellate Tribunal had given a direction u/s134(1-A) of the Act that the permit would remain valid until the disposal of the appeal notwithstanding its expiry on 30-06-84; that the appeal was disposed of on 15-03-85 whereby the permit granted to the petitioner was renewed and that it was countersigned by the State Transport Authority, M.P. Thereafter, by notice dt. 10-12-86 (Ex. 1), the demand for the balance of the additional tax made from the petitioner earlier, was reduced and the petitioner was called upon by respondent 1 to pay a sum of Rs. 2,81,742.00 on account of balance of additional ta