2004 Supreme(SC) 447

2004(5) Supreme 87
SUPREME COURT OF INDIA
(From Gujarat High Court)
S. Rajendra Babu & G.P. Mathur, JJ.
State of Gujarat and Ors. -Appellants
versus
Akhil Gujarat Pravasi V.S. Mahamandal and Ors. -Respondents
Civil Appeal Nos. 6462-6464 of 2001
With
W.P. (C) Nos. 249 and 252 of 2002
Decided on 8-4-2004
Counsel for the Parties :
For the Appellants/Petitioners : K.N. Raval, Solicitor General, L.N. Rao, Additional Solicitor General, Ms. Hemantika Wahi, Ms. Archna Palkar, Malvik Nanavati, Advocates.
For the Respondent in Appeal and Petitioner in W.P.No. 249/2002 and W.P.No. 252/2002 : Vinod Bobde, Sr. Advocate, Prashant Desai, Mahesh Agrawal, Rishi Agrawal, E.C. Agrawala, R.B. Dave, Manu Krishnan, Advocates.

IMPORTANT POINT
Section 3A of the Bombay Motor Vehicles Tax Act, 1958 and also Rule 5 of the Rules made vide notification dated 6-2-2001 are intra vires and perfectly valid.

Headnote:Bombay Motor Vehicles Tax Act, 1958-Sections 3A(1) and (2)-Bombay Motor Vehicles Tax Rules, 1959-Rule 5 made vide notification dated 6.2.2001-Levy of tax on all omnibuses which are used or kept for use in the State exclusively as contract carriages-Validity challenged-Writ petitions filed on the ground that Section 3A of the Act is violative of Articles 14, 19(1)(g), 21 and 300A of the Constitution-High Court struck down Section 3A(1) and (2) of the Act and also Rule 5-Writ of mandamus issued to State authorities not to recover any tax from the vehicles of respondents which were kept but were not being used-After the decision of the High Court, Bombay Motor Vehicles Tax Act was amended by Gujarat Act No.2 of 2001-Whether view taken by the High Court is correct-(No)-Section 3A and Rule 5 of the Rules are intra vires and are perfectly valid.

       Held : A perusal of the Act would show that Section 3 is the general charging Section which provides for levy of tax on all motor vehicles used or kept for use in the State and the rate of tax for different categories of vehicles is given in the schedule appended to the Act. However, Section 3A is a special provision with regard to the "designated omnibuses" and prescribes the annual rate of tax for ordinary, luxury or tourist designated omnibuses having regard to their passenger carrying capacity which are used or kept for use in the State. The challenge here is to Section 3A and, therefore, we will confine to the said provision. Sub-section (2)(a) of Section 3A enjoins that the tax shall be paid in advance by every registered owner or any person having possession or control of the designated omnibuses either annually or in monthly instalments. Sub-section (5)(a) of Section 3A provides for refund of the tax already paid in advance where the registered owner or any person having possession or control of a designated omnibus satisfies the Taxation Authority that the vehicle had not been used or kept for use for a continuous period of not less than one month. Sub-section (5)(b) contains a similar provision of refund where the vehicle has not been used or kept for use for continuous period of not less than one month but exceeding three months in a year. But here the power of refund has been conferred upon the State Government or such officer not below the rank of the Director of Transport, as may, by notification in the official gazette, be authorised in this behalf by the State Government. Rule 5 shows that for claiming refund of the advance tax already paid a declaration in Form NT has to be made to the Taxation Authority before the commencement of the period for which the refund of tax is to be claimed in case it is intended not to use or keep any such vehicle in the State. However, where the vehicle becomes 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 advance declaration, then such declaration has to be given within a period of seven days from the date of occurrence of such accident or mechanical defect or other cause. (Para 4)

       The main ground of challenge of the writ petitioners is that Section 3A mandates payment of tax in advance even though the vehicle may not at all be used. It may be noticed that Section 3A of the Act lays down that there shall be levied and collected on all omnibuses which are used or kept for use in the State exclusively as contract carriages a tax at the rates specified in the table. The incidence of tax is, therefore, on omnibuses which are "used or kept for use in the State". (Para 14)

       The language used in Section 3A - all omnibuses which are used or kept for use in the State exclusively as contract carriages - is in conformity with Entry 57 of List II. The consistent view taken by this Court is that if a vehicle is "used" or is "kept for use" in the State, it becomes liable for payment of tax and the actual use or quantum of use is not material. The fact that the statute provides for refund of the tax, if the authority is satisfied that the vehicle has not been used, does not mean that the legislature can only make a provision for levy of tax which is limited for the period of actual use or that no tax can be levied during the period the vehicle is not put to use in the State. The provision for the refund has been made only for the advantage of the operator so that he may be relieved of the burden of tax when he is not getting any income from the vehicle on account of its non-use but it has no relevance to the competence or authority of the State to enact a law providing for imposition of a tax on vehicles which are used or are kept for use in the State. (Para 18)

       Nothing new has been pointed out to challenge Gujarat Act No.9 of 2002 by which the Bombay Motor Vehicles Taxation Act, as adopted in the State of Gujarat with up to date amendments, was further amended after the decision of the High Court which was rendered on 17th August, 2001. In fact, the main argument of the learned counsel for the writ petitioners is that the said amending Act merely rearranged the Sections and suffered from the same infirmity as the previous Act. Since we are of the opinion that the view taken by the High Court is not correct and Section 3A and Rule 5 of the Rules, as incorporated vide notification dated 6.2.2001 are intra vires and are perfectly valid, the challenge made to Gujarat Act No.9 of 2002 has no substance and must fail. (Para 23)