1. The petitioner has been carrying on motor transport business plying his bus APK 8244 as a contract carriage for transporting tourist parties from place to place on temporary permits obtained from the Regional Transport Officer, Vijayawada - the respondent herein as and when necessary. He has been paying the prescribed tax of Rs. 1020/- in respect of his contract carriage every quarter. He paid the same amount for the quarter starting with 1-4-70 and ending with 30th June, 1970. He obtained a temporary permit from the respondent valid from 13-4-1970 to 16-4-1970 for carrying a tourist party from Vijayawada to Bhadrachalam and back. The petitioner took in the tourist party to fulfill the contract.
2. The Motor Vehicles Inspector, Flying Squad, Guntur served a check report on the driver of the petitioner on 14-4-70 on the road to Kondapalli on Tiruvur to the effect that the vehicle was carrying passengers and seized the bus for being kept in his custody. The petitioner immediately on hearing from his driver about the alleged occurrence approached the respondent for release of the bus and he was informed that the vehicle would be released only on payment of a sum of Rs. 4590/- representing the difference in tax between the amount in respect of the stage carriage and a contract carriage. The petitioner paid the demanded amount under protest on 15-4-70 and obtained release of the vehicle. On 17-7-1970, he submitted a memorandum to the respondent that he should be permitted to have refund of the amount paid. The respondent issued proceedings Re. No. 11600/B3/70 dated 29-8-1970 on 17-9-1970 to the effect that the petitioner is liable to pay the aforesaid sum of Rs. 4590/- as difference of proportionate tax due as on a stage carriage for the quarter ending with 30-6-1970 and that the sum already paid was adjusted towards that demand. On 17-12-1970 the petitioner presented an application to the respondent requesting refund of proportionate tax in respect of the two months of May and June, 1970 as per the provisions of G.O. No 2420 since the vehicle was used only as a contract carriage and not as a stage carriage during the said two months of May and June, 1970 comprised in the quarter from 1-4-1970 to 30-6-1970 for which the entire tax, for a stage carriage was collected under pressure. The respondent by his Memo. No 11600/B3/70 dated 23-2-1970 informed the petitioner that there was no provision under the Taxation Act to consider his refund application as the difference of tax was paid on detection of non-payment of tax on 14-4-1970. He thus rejected the application for refund. The petitioner has filed this writ petition seeking an order from this Court directing the refund of a sum of Rs. 2754 /- representing the 3/5ths amount of Rs. 4590/- paid as tax for the quarter ending with 30-6-1970.
3. The contention of the petitioner is that he was plying his bus as a contract carriage and has also paid an advance tax for contract carriage in accordance with the provisions of Section 4(1) of the Motor Vehicles Taxation Act (hereinafter referred to as the Act.) On the 14th of April 1970 the Motor vehicles Inspector found that the contract carriage was being used as a stage carriage and therefore the difference between the tax leviable on a stage carriage and a contract carriage was collected from the petitioner. He paid the tax for the whole of the quarter ending with 30th of June, 1970 and he did not ply the vehicle as stage carriage in the months of May and June, 1970 and he is entitled to claim refund in accordance with the notification issued under the said section. His further contention is that explanation III to the said notification, on which reliance is placed by the respondent, does not apply to his case. The respondent has gone wrong incoming to the conclusion that the petitioner is not entitled to refund because non-payment of tax was detected and therefore he is within Explanation III to the notification. His contention is that Explanation III is not applicable as it may be said that the non-payment of tax was detected only if he had not paid the tax due on the vehicle as contract carriage. The expression 'non-payment has been detected', does not apply to the case of the nature before me. He therefore contends that he is entitled to refund as per the notification.
4. For the Government it is contended by the learned counsel that Explanation III of the notification is applicable as the petitioner was detected plying the bus as stage carriage and consequently non-payment of tax as a stage carriage was detected.
5. In order to determine the question raised before me it is necessary to refer to certain provisions of the Act and also the notification. The charging section in the Act is Section 3 which says that the Government may, by notification from time to time, direct that a tax shall be levied on every motor vehicle used or kept for use, in a public place in the State. From a reading of the charging section it is clear that tax is levied if a vehicle is used or kept for use in a public place. By virtue of Section 4, sub-section (1) payment of tax can be made quarterly, half-yearly or annually, within 15 days from the commencement of the quarter of half-year or year as the case may be: sub-section (b) of Section 4 (1)reads:-
'Where the tax for any motor vehicle has-been paid for any quarter, half-year or year and the motor vehicle has not been used during the whole of that quarter, half-year or year or a continuous part thereof not being less that in one month, a refund of the tax at such rates as may, from time to time be notified by the Government, shall be payable subject to such conditions as may be specified in such notification.
6. The notification issued under the provisions of Section 4(1) (b) provides for refund of tax in various cases in which a vehicle is not used. I am concerned with item (b) of the table thereof which says that where the vehicle is used only during the first months or part thereof, a refund of 3/5th oft he tax paid during the quarter may be granted on the condition that the licence should be surrendered on or before the first day of the second after. There are three explanations to this notification, Explanation III being the relevant one. The third explanation reads that no refund shall be made, in cases that no refund shall be made in cases where the tax is paid only after its non-payment has been detected or after a prosecution or other proceeding has been commenced in respect of such non-payment, but the licensing officer may sanction refund in such cases if he is satisfied that special circumstances exist which justify that course. The case of the petitioner turns on the interpretation of this explanation. A reading of sub-section (1) (b) of Section 4 shows that no conditions have been stipulated under the aforesaid section on the fulfillment of which refund can be demanded. But it has been left to the Government to impose such conditions as it may specify in the notification. According to the charging Section 3 tax is payable in cases where a motor vehicle is used or kept for use in a public place. Section 4(1)(b) provides for refund when the motor vehicle is neither used nor kept for use. A reading of Section 4(1)(b) shows that tax has to be paid within 15 days from commencement of the quarter, half-year or year as the case may be. The petitioner in the instant case did pay the tax within 15 days of the quarter starting with 1-4-70 for a contract carriage. It cannot therefore be said that the petitioner did not pay the tax for a contract carriage. He was made to pay the difference between the tax for a stage carriage and a contract carriage a she was detected of plying the vehicle not as contract carriage but as a stage carriage. But it cannot be said that the tax intended for contract carriage was not paid by the petitioner and that the non-payment of such tax was detected.
7. The learned Government Pleader's argument that when the petitioner was detected plying his bus as stage carriage there is non-payment of tax as such cannot be countenanced. It is not what is intended under Explanation III. A reading of Explanation III together with the provisions of Section 4(1)(b) clearly shows that the detection is on non-payment of tax for which the vehicle was intended to be used by the owner thereof. It doesn't apply to cases where an extra tax is levied on the owner of a vehicle purpose than the purpose for which it was intended. The detection of non-payment under Explanation III can only be in cases where the tax is not paid on the vehicle used for the purpose for which it is intended to be used. The learned counsel for the Government also contended that Section 4(1)(b) of the Act is not at all intended to apply to cases of the nature before me and a person who has been detected of suing the vehicle for a purpose other than the one for which it was intended cannot claim any refund under Section 4(1)(b). The argument of the learned counsel is that the expression 'where the tax for any motor vehicle has been paid' occurring in Section 4(1)(b) applies only to payment made under the provisions of Section 4(1)(b) and does not apply to payments of the nature made in the case before me.
8. I find it very difficult to accept that argument because it is a matter of common knowledge that tax has to be paid on vehicles which may be purchased during the quarter. It is not necessary that the first month of the quarter. In case of a vehicle purchased during the second or the third months of the quarter it is obvious that the tax cannot be paid in the manner stipulated under Section 4(1)(b) of the Act. In such cases the owner of a vehicle would no be entitled to refund if the vehicle is not used or has not been kept for use during the remaining period of the quarter. I am therefore inclined to hold that the expression 'has been paid' in Section 4(1)(b) of the Act is not restricted to payments made under Section 4(1)(b) of the Act. It applies to all payments of tax made and refund can be claimed in cases where tax has been paid.
9. Having come to the conclusion that Explanation III is not applicable to a case of the nature before me, the petitioner is entitled to claim refund in accordance with item (b) of the notification issued under Section 4(1)(b) of the Act. Under Item (b) he is entitled to refund of 3/5ths of the tax paid for the quarter. It is not in dispose that the vehicle was not used as a stage carriage in the months of May and June, 1970. The petitioner is therefore entitled for refund of the amount of Rs. 2,754/-. The respondent is directed to refund the said amount to the petitioner.
10. In the result the writ petition is allowed with the aforesaid direction without costs. Government Pleader's for Rs. 100/-.
11. Petition allowed.