1. On a reference made by one of us (Puttaswamy, J.), these cases were posted before us for disposal.
2. As the principal challenge of the petitioners is to one and the same enactment and the orders made by the authorities are on that basis, these petitions can conveniently be disposed of by a common order. We, therefore, propose to dispose of them by a common order.
3. All the petitioners are register-ad owners of 'Transport Vehicles' within the meaning of that term occurring in S. 2(33) of the Motor Vehicles Act, 1939 (hereinafter referred to as the M. V. Act) and have been issued with the necessary registration certificates in their favour under the said Act.
4. In order to appreciate the questions that arise for determination in these cases, it is not necessary to notice the facts in all the cases and it is enough to notice the facts in writ petitions Nos. 1406 of 1980, 3570 of 1982 and 15249 of 1982 in some detail as illustrative and not exhaustive, which we propose to do in the first instance.
5. Writ Petition No. 1406 of 1980: Among others, the petitioner is the owner of a passenger transport vehicle bearing registration No. MYT 3065. He claims that the fitness, certificate of the said vehicle expired on 30-12-1976 and was not renewed till 30-4-1978 during which period it was not used on roads. But, notwithstanding the same the Regional Transport Officer (hereinafter referred to as the RTO) Raichur by his notice No. SR 1087/MYT 30851TXN. TR/ NU,,RCR/77-78 dated 19/23-12-1977 (Annexure-A) called upon the petitioner of pay a sum of Rs. 15,301/- as taxes due by him on the said vehicle under the Karnataka Motor Vehicles Taxation Act, 19,57 (Karnataka Act 35 of 1957) (herein after referred to as the Act) for the period from 1-1-1977 to 31--l-1978 on the sole ground that the non-use intimation had not been extended from 1-10-1976, the validity of which was challenged by him before the Deputy Commissioner for transport (hereinafter referred to as the DC), Gulbarga Division, Gulbarga in Appeal No. TAX. APL. 15/DCT/GBA/78-79 who by his order dated 31-8-1979 (Annexure-B) has dismissed the same. On the basis of those orders, a notice of demand dated 15-1-1979 (Annexure-C) has been issued by the Revenue Inspector, Koppal Circle, Koppal proposing to re cover the said amounts as arrears of land revenue.
6. Writ Petition No. 357011982: Among others, the petitioner is the owner of a stage carriage vehicle bearing registration No. MYT 4778. He claims that the fitness certificate of the said vehicle expired on 29-8-1976 and the vehicle had not been used on roads from 1-7-1976 to 30-6-1977. But, notwithstanding the same, the, RTO, Tumkur by his notice No. RGN.I MYT 4778/77-78 dated 24-5-1977 (Annexure A) has called upon the petitioner to pay a sum of Rs. 22,000/- as taxes due on the said vehicle under the Act for the aforesaid period, the validity of which was challenged by him before, the DC, Bangalore in Appeal No. TXA 22/77 who by his order dated 29-11-1977 dismissed the same, which was challenged by him before this Court in Writ Petition No. 7360 of 1978. On 20-2-1981 this Court allowed the said writ petition, directed the DC to restore the appeal to its original file and dispose of the same in the light of the observations made in that order. On such remand, the DC by his order dated 31-10-1981 (Annexure B) has again- dismissed the same.
7. Writ Petition No. 15248 of 1982: Among others, the petitioner is the owner of a public carrier vehicle bearing registration No. MYJ 3607. He has averred that he purchased the same sometime in 1980 from its previous owner one Sri K. S. Bettagari of Bijapur, and got the necessary transfer thereafter in his favour. In notice No. RGN/IIII/MYJ/3607/ 80-8114742 dated 12-11-1980 (Annexure A) the RTO, Bijapur, has called upon the petitioner to pay a sum of Rs. 22,710/- as arrears of taxes due on the said vehicle from 1-1-1976 to 30-9-1980, the validity of which was challenged by him before the DC, Belgaum in Appeal No. DCT, TAX.APL.76/80-81/924 who by his order dated 8-12-1981 (Annexure D) has dismissed the same.
8. In the above cases and others the tax authorities under the Act have fastened the liability on the petitioners on the basis of a note appended to the explanation of S. 3(1) of the Act by the Karnataka Motor Vehicles Taxation (Amendment) Act, 1981 (Karnataka Act 39 of 1981) (hereinafter referred to as the Amending Act), without examining the various special pleas urged by them, one of which was that the certificates of registration of their vehicles were not current. In this view, the petitioners have challenged the validity of S. 2 of the Amending Act and the consequent orders made against them under the Act.
9. The petitioners have urged that S. 2 of the Amending Act, treating the registration certificates of transport of vehicles that were not current under the M. V. Act, as current for purpose of e3iigibility of taxes under the Act, was repugnant to the M. V. Act, a parliamentary enactment, and was void under Art. 254 of the Constitution. Secondly, the petitioners have urged that S. 2 of the Amending Act which had not removed the cause of invalidity declared by a Full Bench of this Court in B. V. Subramanya Setty v. Senior Regional Transport Officer, Mysore (Writ Petns Nos. 1149 of 1974 and 148 of 1975 decided on 30-6-1978) was void and inoperative and that in any event had not been rendered ineffective by the Amending Act and continues to be good law. Lastly, the petitioners have urged that the orders made against them on the basis of an invalid provision, without applying the principles enunciated in Subramanya Setty's case were illegal.
10. In justification of the Amending Act or the orders made thereto, the respondents have not filed their return, But the respondents have, however resisted them on various grounds that will be noticed and dealt by us in due course.
11. Sri H. B. Datar, teamed counsel for the petitioner in Writ Petition No. 1406 of 1980 has urged that the Amending Act enacted by the Karnataka Legislature on the currency of registration of motor vehicles for the purpose of the Act was repugnant to the M. V. Act. a parliamentary enactment and was void under Art. 254 of the Constitution Learned counsel far the other petitioners adopting the arguments of Sri Datar have supplemented them.
12. Sri S. Rajendra Babu, learned Government Advocate, appearing for tho2 respondents, has urged that the Amending Act being consistent with the ruling of this Court in Subramanya Setty case, was not repugnant to the 1A. V. Act and was not violative of Art. 254 of the Constitution.
13. Both sides have relied on large number of rulings in support of their respective cases and those that are relevant will be noticed by us at the appropriate stage.
14. The Act is a consolidating and Amending Act. The Act was enacted by the new State of Mysore, now called, 'Karnataka' by virtue of the powers derived by it under Art. 246 of the Constitution read with Entry 57 (State List) of List-11 of the Seventh Schedule to provide for levy of taxes on motor vehicles in the State. The Act which received the assent of the President m 30-11-1-957 was first published in the. Karnataka Gazette on 5-12-1957 and came into force from 1-1-1958/vide S. 1(3) and Notification No. HD 148 MVT 57 dated If-)/13-12-1957. In 1961 the State by virtue of the powers derived by Art. 246 (3Y and Entry No. 56 of Li-it-11 (State List) of the Seventh Schedule to the Constitution' ' enacted another Act called the Karnataka Motor Vehicles (Taxation or Passengers and Goods) Act, 1961 to p6 vide for levy of taxes on passengers and goods carried in stage carriages and public-carrier vehicles in the State, The said Act has been repealed with the effect from 1-7-1976 by the Motor Vehicle, Taxation (Amendment) Act, 1976 (Kamataka Act 39 of 1-976), however, merging the taxes levied thereunder with the taxes. levied under the Act. From 1-71976 the Act provides for levy of taxes on motor vehicles and taxes on passengers and goods.
15. Section 3(1) of the Ac which is the main charging section, with which alone we are now concerned, as originally enacted in 1957, reads thus:
'3, Levy of Tax-M A tax at the rates specified in part-A of the Schedule shall be levied on all motor vehicles suitable for use on roads, kept in the State of Mysore;
Provided that in the case of motor vehicles kept by a dealer in or manufacturer of such vehicles for the purpose of trade, the tax shall only be levied and paid by such dealer or manufacturer on vehicles permitted to be used on roads in the manner prescribed by rules made under the Motor Vehicles Act, 1939.
Explanation-A motor vehicle of which the certificate of registration is current shall, for the purposes of this Act, be deemed to be a vehicle suitable for use on roads'.
By the 1976 Amendment Act, the words 'Kept in the State of Mysore occurring in sub-section (1) and the proviso to that sub-section have been deleted from 1-7-1.976,
16. Section 2 of the Amending Act, the validity of which is seriously challenged reads thus:
'2. Amendment of Section 3 - In Section 3 of the Karnataka Motor Vehicles Taxation Act, 1957 (Karnataka Act 35 of 1957) (hereinafter referred to as the Principal Act), in sub-section (1), after the explanation, the following note shall be deemed always to have been inserted, namely:- Note:- For the purposes of the, above Explanation the Certificate of registration shall, notwithstanding anything contained in Section 313 of the 'Motor Vehicles Act, 1939, be deemed to be current even if the certificate of fitness is not effective provided such certificate of fitness has not been cancelled'.
The Amending Act which received' the assent of the Government on 7-8-19-11 was first published in Karnataka Gazette on 12-8-19,81 making a few more amendments to the Act, that are not material for these cases, for which reason they are not noticed.
17. Section 2 of the Amending Act gives retrospective effect to the note appended to the explanation from 1-1-1958. The effect of the note is that a certificate of registration issued under the M. V. Act though not current under that Act, will be current for purpose of the Act. The currency or otherwise of a registration certificate issued under the M. V. Act, is ignored in determining the eligibility of taxes on motor vehicles under the Act.
18. Section 22 of the M. V. Act directs the compulsory registration of a motor vehicle, issue of a certificate of registration to the registered owner of such a vehicle, assigning a registration mark for its display on such vehicle. The rest of the provisions dealing with the manner, methods place of registration, efficacy of registration, change of transfer of ownership and alteration in motor vehicle are not relevant for our purpose.
19. Section 33 of the M. V. Act empowers the registering authority or the other prescribed authority to suspend the certificate of registration of a vehicle. S. 34 provides for cancellation of certificate of registration of a vehicle. Ss. 33 and 34 are general provisions and apply to all types of 1notor vehicles including transport vehicles.
20. But, so far as transport vehicles, S, 38 of the M. V. Act makes a special provision for issue of a certificate of fitness, its currency and its cancellation also. A transport vehicle registered under S. 22 of the M. V. Act in relation to which a certificate of registration is issued, must also possess a certificate of fitness of such a vehicle issued by an authorised officer. S. 38 (1) also empowers the authorised officer to refuse a fitness certificate, if he is satisfied that the vehicle was not in conformity with the requirements of the Act and the Rules or was not roadworthy.
21. A certificate of fitness issued under S. 38 will be valid for a maximum period of two years and for a minimum period of six months or one year as the case may be. Before the expiry of the certificate of fitness, the owner is require ed to produce the vehicle for inspection over again and obtain a fresh certificate of fitness or renewal. as it is called under the Rules framed under the Act. But, on the expiry of a fitness certificate and its non-renewal or issue of a fresh fitness certificate, the certificate of registration issued under S. 22 will not be valid and the owner of such a transport vehicle cannot use the same at a public place or on roads.
22. Section 38(1) declares that the registration certificate of a transport vehicle that does not carry a certificate of fitness in the form set forth in that Act shall not be deemed to have been validly registered for purposes of S. 22 of the Act.
23. Section 38 (3) empowers an authorised officer to cancel a certificate of fitness of a motor vehicle, When a certificate of fitness is cancelled, S. 38 (3) provides for automatic suspension of the certificate of registration of the vehicle and the permit issued in respect of such vehicle. With this analysis, we may now notice the two rulings of this Court that have relevance to the question.
24. In V. Narayana Reddy V. Cornmr. for Transport in Mysore 1971 (2) Mys LJ 319 a Division Bench of this Court consisting of Naryana Pal and Govinda Bhat, J.J. (as they were then) repelling the contention urged on the basis of S. 38 of the M. V. Act, the currency of a certificate of registration of a transport vehicle and its non-eligibility to taxes under the Act, expressed thus:
'The legal fiction created by S. 38 to the Motor Vehicles Act is only for the purpose of S. 22 of that Act and cannot be extended to the Taxation Act. Therefore, we are not able to agree with the contention of the learned counsel that the petitioner's vehicle should be held unsuitable for use on roads'.
But, a Full Bench of this Court consisting of Chandrashekhar, C. J., Venkataramaiah, J., (as he then was) and late Srinivas Iyengar, J. in Subramanya Setty's case dealing with that very contention disapproved the above exposition and expressed thus:
'The correctness of the above view is under challenge before us. In the above decision this Court has proceeded on the assumption that registration of motor vehicles for purpose of the Taxation Act, is different from the registration of a motor vehicle for purpose of the Motor Vehicles Act. That assumption is not, in our opinion, correct. There are no provisions relating to the issue of a certificate of registration of a motor vehicle under the Taxation Act, S. 2(j) of the Taxation Act treats the Motor Vehicles Act as a cognate Act by declaring that words and expressions used, but not defined in it, shall have the meaning assigned to them in the Motor Vehicles Act The fiction embodied in the Explanation to S. 3(1) of the Taxation Act comes into play only when a certificate of registration is obtained under Chapter-11 of the Motor Vehicles Act and continues to operate as long as the said certificate is current only by operation of the relevant provisions of the Motor Vehicles, Act. It is not in any way affected by any of the provisions of the Taxation Act. Hence, in order to find out whether a certificate of registration is current or not, we have to look to the provisions of the Motor Vehicles Act only. It follows that there cannot be a certificate of registration which is not current for purposes of the Motor Vehicles Act, but current for purposes of the Taxation Act. Under the Motor Vehicles Act a certificate of registration may cease to be current in several ways. It comes to an end on the expiry of the prescribed period under S. 25 of the Motor Vehicles Act. It ceases to be current by an order of suspension passed under S. 33 of the, Motor Vehicles Act or by an order of cancellation under S. 34 of the Motor Vehicles Act. In the case of a transport vehicle, when it does not carry a fitness certificate, S. 38 (1) states that it shall not be deemed to have been validly registered for purposes of S. 22 of the Motor Vehicles Act. That means that during the period when the transport vehicle is not carrying a fitness certificate, its certificate of registration will be inoperative or non-existent and it cannot be used for carrying passengers ox goods (vide-Puran Singh v. State of U. P. : AIR1959All489 ). Explanation to S. 3(1) of the Taxation Act cannot be applied to such a case (vide-State of Karnataka v. Boodi Reddappa 1975 (1) Kant LJ 206): We do not, therefore agree with the view expressed in Narayana Reddy's case on the above question.
xx xx xx xxOn a careful consideration of all aspects of the case, we feel that the decision in Narayana Reddy's case which takes a view contrary to the above view, is erroneous and we overrule it.'
We are bound by this enunciation made by the Full Bench. An appeal filed by the State before the Hon'ble Supreme Court against the decision rendered in Subramanya Setty's case is still pending
26. The legal position declared by this Court in Subramanya Setty's case is viewed by the revenue as making it difficult to recover the bulk of taxes levied on transport vehicles, whose certificates of fitness are not renewed and in some cases even stated to be deliberately not renewed. In that view, the State without waiting for the disposal of the appeal filed by it before the Supreme Court, has introduced the note to the explanation with retrospective effect. In the Statement of Objects and Reasons accompanying L. A. Bill No. 57 of 1981 to introduce the 'Note' it is stated thus:-
'The High Court has taken the view that the presumption of suitability of the vehicle for use on roads did not arise when the registration certificate of a transport vehicle is not current on account of expiry of the fitness certificate. Certain transport operators are taking advantage of this situation to evade payment of motor vehicle tax by allowing the fitness certificate to expire. S. 3 of the Karnataka Motor Vehicles Taxation Act, 1957 is intended to be amended to prevent this practice to avoid loss of revenue to the State.'
Without any doubt, the retrospective amendment seeks to nullify the ruling of this Court in Subramanya Settey's case somewhat crudely, but regretfully without conforming to the requirements of the Constitution.
27. On the distribution of legislative powers and the entries found In the Seventh Schedule of our Constitution, we consider it proper to briefly notice them at this stage as a proper backdrop, for which purpose it Ls enough to refer to the ruling of the Supreme Court in The Second Gift Tax Officer, Mangalore Etc. v. D. H. Nazareth Etc. : 76ITR713a(SC) . In Nazareth's case the Supreme Court reversing a decision of this Court and sustaining the validity of the Gift Tax Act enacted by the Parliament expressed thus:
'Under Art. 245, Parliament makes laws for the whole or any part of 'he territory of India and the Legislatures of the States for the whole or part of their respective States. The subject-matter of laws are set out in three lists in the 8eventh schedule. List-I (Usually referred to as the Union List) enumerates topics of legislation in respect to which Parliament has exclusive power to make laws and List-II (usually referred to as the State List) enumerates topics of legislation in respect to which the State Legislatures have exclusive power 'o make laws. List-III (usually referred to as the Concurrent List) contains topics in respect to which both Parliament and Legislature of a State have power to make laws. Inconsistency between laws made by Parliament and those made by the Legislatures of the States, both acting under the Concurrent List, is resolved by making. Parliamentary law to prevail over the law made by the State Legislature.
xx xx xx xx5. It will, therefore, be seen that the sovereignty of Parliament and the Legislature is a sovereignty of enumerated entries, but within the ambit of an entry, the exercise of power is as plenary as any legislature can possess, subject, of course, to the limitations arising from the Fundamental Rights. The entries themselves do not follow any logical classification or dichotomy. As was said in State of Rajasthan v. G. Chawla : 1959CriLJ660 the entries in the lists must be regarded as enumeration simplex of broad categories. Since they are likely to overlap occasionally, it is useful to examine the pith and substance of legislation with a view to determining to which entry they can be substantially related, a slight connection with another entry in another list notwithstanding. Therefore, to find out whether a piece of legislation falls within any entry its true nature and character must be in respect to that particular entry. The entries must of course receive a large and liberal interpretation because the few words of the entry are intended to confer vast and plenary powers. If, however, no entry in any of the three lists covers it, then it must be regarded as a matter not enumerated in any of the three lists. Then it belongs exclusively to Parliament under Entry-97 of the Union List as a topic of Legislation.'
28. Article 245 of the Constitution, that deals with the extent of laws made by the Parliament and the Legislatures of States, declares that Parliament can make a law for the whole or any part of the country and the Legislature of a State can make a law for the whole or part of its own State.
29. Article 246(1) empowers Parliament to make laws in respect of any of the matters enumerated in List-I (Union List) in the Seventh Schedule of the Constitution. Art. 246(3) empowers the Legislature of a State to make laws in respect of any of the matters enumerated in List-II (State List) in the Seventh Schedule of the Constitution.
30. Article 246(2) of the Constitution empowers the Parliament and the Legislature of a State also to make laws with respect to any of the matters enumerated in List-III viz., Concurrent List in the seventh schedule of. the Constitution. On the topics enumerated in the Concurrent List the Parliament and the State Legislature are competent to make laws. But, that power is subject to the limitations placed by Art. 254 of the Constitution, which reads thus:
'254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States. - (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an' existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the confederation of the President and has received his assent, prevail in that States:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of State.'
Under this Article, a State law made which is repugnant to a law made by Parliament to the extent of repugnancy will be void, unless that law is given efficacy in that State, under sub-Art. (2) of Art. 254 of the Constitution.
31. The M. V. Act is the Parliamentary enactment, enacted on the topic of motor vehicle or mechanically propelled vehicles of Entry 35 of the Concurrent List. Under that entry Parliament was competent to make provisions for registration of motor vehicles, issue of fitness certificates to transport vehicles and currency or otherwise of registration certificates in one or the other circumstances detailed in those provisions.
32. Article 246(3) read with Entry 57 of List - II enables the State Legislature to Legislate on taxes on motor vehicles suitable for use on roads and the Act has been enacted by the State Legislature by virtue of those powers. The Act while defining certain terms adopts the words and terms that are defined in the M. V. Act.
33. We have earlier analysed the relevant provisions of the M. V. Act dealing with registration of vehicles, suspension, cancellation of registration certificates and their ineffectiveness in case of transport vehicles that are not covered by a fitness certificate issued under S. 38 of that Act and the views expressed on those provisions in Subramanya Setty's case. We have also noticed the effect of the Amending Act. Without any doubt, the Amending Act by one sweep provides for the very opposite of what has been the cur of motor of the M. V. Act, a Parliamentary enactment that has made detailed provisions on the currency of registration certificates continue on the statute book as they were without any modification either by the Parliament or by the State, the note to the explanation provides for the very opposite of it from the very inception of the Act. The note that diametrically runs counter to the provisions of the M. V. Act is clearly repugnant to the provisions found in the M. V. Act on the topic of registration of motor vehicles and their currency. We find no substance in the contention of the respondents that the note introduced by S. 2 of the Amending Act does no more than to explain the provisions of the M. V. Act and is consistent with the law enunciated by this Court in Subramanya Setty's case. We are, therefore, of the opinion that S. 2 of provided in the M. V. Act Amending Act is repugnant to the M. V. Act, a Parliamentary Enactment and the same is void in its entirety under Art. 254 of the Constitution.
34. In State of Assam v. Labanya Phobha Devi (AIR 1967 SC 11575) on which strong reliance has been placed by the learned Government Advocate, the question that arose before the Supreme Court was whether an amendment made to the Assam Motor Vehicles Taxation Act, enhancing the rate of taxes struck down by the Assam High Court as falling under Entry 35 of List-III (Concurrent List) and not under Entry 57 of List-IJ (State List) was correct or not. On that question, the Supreme Court disagreeing with the Assam High Court sustained the validity of the Amending Act enhancing the rates of Taxes as falling under Entry No. 57 of the State List - But, that is not the position in the present cases, and therefore, the ratio in Labanya Probha Devi's case does not really bear on the point and assist the respondents.
35. On the foregoing discussion, we hold that S. 2 of the Amending Act is liable to be struck down. On this conclusion, it is not necessary for us to examine the other contention urged touching on the validity of this provision. But, as our order is subject to appeal, we consider it proper to examine the other contention also and express our opinion.
36. Sri Datar has urged that the Amending Act has not removed the cause of invalidity noticed by this Court in Subramanya Setty's case from its inception and had not rendered that decision ineffective, on which ground, the Amending Act was invalid. In support of his contention Sri Datar has strongly relied on the ruling of the Supreme Court in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality : 79ITR136(SC) and a Division Bench ruling of this Court in Vasavi Traders v. State of Karnataka, 1982 (2) Kant LJ 357.
37. Sri Babu has urged Amending Act was valid.
38. The Parliament and the Legislatures of the State within the areas enumerated or demarcated are competent to enact validating laws and make laws retrospectively, is well-settled and does not require a detailed reference to the volume of case law on the point. So also, the principles that should be borne that the in examining validating laws curing the defects declared by Courts and validating the prior actions or rendering the Judgments of Courts ineffective, are well settled and have been exhaustively set out by the Supreme Court in Prithvi Cotton Mills's case and the true effect of that decision as also. the other rulings on that question have been summarised and are restated by this Court in Vasavi Trader's case. We, therefore, propose to examine this contention in the light of the principles stated in those cases.
39. We have seen earlier that in Subramanya Setty's case, the Full Bench had ruled that on the topic of registration certificate of a motor vehicle and its currency the matter was exclusively and exhaustively dealt in the M. V. Act and it is those provisions that apply to that question under the Act. But, the Amending act without effecting any amendments to the provisions found in the M. V. Act, curing those defects, if any, from their inception and enacting a validating provision, as is generally done in such situations, attempts to provide for the very opposite of it for purposes of the Act from the very inception. The insertion of the note to the explanation of S. 3(1) of the Act with retrospective effect does not and cannot be construed as amending the M. V. Act and curing the defect, if any, much less rendering the judgment of this Court in Subramanya Setty's case as ineffective at all times. From this it follows that the too simple a surgery performed by the Amending Act in violation of the constitutional and legal principle, is ultra vires of the Constitution and is liable to be struck down.
40. We have earlier set out the relevant discussion in Subramanya Setty's case. After that discussion, the Court noticing certain other rulings of this. Court on which reliance had been placed for the revenue, concluded thus:
'We however make it clear that merely because the Explanation to Section 3(1) of the Taxation Act is held to be inapplicable in a particular case, the vehicle in question is not liable to pay tax under S. 3(1) of the Taxation Act. It may still be open to the taxing authority to hold the vehicle liable to tax provided it is established independently of the Explanation that, the vehicle was suitable for use on roads during the relevant period.'
We have extracted this paragraph from the original autograph of the order (if this Court. We have carefully read the order of the Full Bench in full more than once. We are of the considered opinion that the Full Bench in this para has declared that even when a registration certificate of a motor vehicle was not current, it was open to the revenue to prove that the vehicle was suitable for use on roads and accordingly used on roads any period and such a vehicle for such period is the true effect of that para context in which it occurs. But that the vehicle was suit was for on and that in the unfortunately, this para does not clearly convey this idea as some words like 'it does not necessarily follow, or 'it can not be held' in between the words 'in a particular case' and 'the vehicle in question' are missing obviously by a typo graphical or a clerical error only and not due to inadequacy of expression on the part of the eminent Judge that wrote the opinion, with which the other two eminent Judges expressed their concurrence. We have stated this with great hesitation and humility not with the object of finding fault in the judgment or any part thereof, which we plainly confess, We are hardly competent to do, but with the sole object of clearing any misunderstanding of the statement by the authorities.
41. We have found that the note was an invalid note and the law declared by this Court in Subramanya Setty's case continues to be valid. We find that the original and the appellate authorities under the Act, in the impugned orders have demanded taxes from the respective petitioners either on the - basis of the law declared by this Court in Narayana Reddy's case (1971 (2) Mys LJ 319) or on the basis of the note appended to the explanation to S. 3(1) of the Act and not with reference to the law declared by this Court in Subramanya Setty's case. Unfortunately, in the impugned orders, the authorities have not even attempted to determine the liabilities bearing the correct legal principles but have determined them on illegal and irrelevant principles. From this, it follows that the authorities have to decide the cases in the light of the principles enunciated by this Court in Subramanya Setty's case. In this view, there is do other alternative for us except to quash the impugned orders and direct the original authorities to redetermine the matters afresh.
42. We find that the petitioner in writ petition No. 3570 of 1982 admits that the fitness certificate of his vehicle was valid till 29-8-1976. He does not assert that his registration certificate had been suspended or cancelled for the period from 1-7-1976 to 29-8-1976. When that is so, on the very principles stated in Subramanya Setty's case, the petitioner, in any event is initially liable to pay taxes for the months of July and August, 1976 and then make a claim for refund, if the facts and circumstances warranted the same, which necessarily has to be examined and decided by the authority on its own merits. Unfortunately, in issuing the demand notice, as also in affirming the same, the original and the appellate authorities have lost sight of this fact. But still the lumped up demand cannot be upheld by us which, however, does not prevent the original authority from redetemning the amounts for those months separately and recovering them in accordance with law.
43. In determining the arrears of taxes due under the Act, as already ruled in Syed Rafiq Ahmed v. Regional Transport Officer (Writ Petns. No. 18958 of 1983 and connected cases decided on 24-11-1983) (reported in AIR '1934 NOC 254) the authorities are bound to conform with the requirements of the principles of natural justice. We do not propose to examine the same but restate the same in these cases,
44. Before parting with these cases, we deem it proper to notice a general defect, we have found in the orders made under the Act.
45. We have found that the orders impugned in these cases and invariably in all the other cases that have come up before us for our scrutiny, the original and the appellate authorities under the Act deal with the determination of taxes under the Act almost in a mechanical and casual manner. We are pained to observe that the authorities invariably do not make a genuine attempt to apply the law, examine the facts in each case, with that earnestness that is necessary in each case and make a just and proper order, in the cases that come up before them. We earnestly hope and trust that the original and appellate authorities under the Act at least in future will avoid the same and make a genuine attempt to decide the cases that come up before them, without any doubt, in accordance with law but also in a fair and just manner.
46. In the light of our above discussion, we make the following orders and directions:
(a) We strike down S. 2 of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1981 (Karnataka Act 39 of 1981) only and not any other provision of that Act.
(b) We quash the orders impugned in all these cases and direct the Regional Transport Officer to restore the cases to their original files, re-determine the amounts that are found due to the petitioners in accordance with law and the observations made in this order.
47. Writ Petitions are disposed of in the above terms. But, in the circumstances of the cases, we direct the parties to bear their own costs.
48. Let this order be communicated to the respondents within 15 days from this day. Let a copy of this order be also furnished to the learned Government Advocate within the same time.
49. Order accordingly.