1. This batch of writ petitions by the petitioners under Article 226 of the Constitution of India is to challenge the validity of levy of tax and penalty on their vehicles covered by contract carriage permits when plied as stage carriages.
2. The material facts in all the writ petitions being almost similar, we feel it sufficient to briefly stated, the facts in the main W.P.No. 3565 of 1967. The petitioner is a motor transport operator playing his tourist bus A.D.B. 166. At the instance of one M.Madhava Rao who approached him to take a pilgrim party to Tirupati, the petitioner obtained a temporary permit for his vehicle after paying the requisite tax for the quarter ending 31-12-1967 for the conveyance of a tourist party from Masulipatnam to Tirupathi and Tirupathi to Masulipatnam .
3. On 5-12-1967, the petitioner's vehicle on its way to Tirupathi was checked by the Motor Vehicle Inspector. P.M. and it was found that four persons not included in the contract were traveling in the vehicle and the fares were collected from them. Alleging that the vehicle was used as a stage carriage. the Motor Vehicle Inspector seized the Vehicle and kept in the police station. On the basis of the check report, the notice on 8-12-1967 directing the petitioner to pay a sum of Rs. 2,232/- towards quarterly tax for the quarter ending with 31-12-1967 and a sum of Rs. 4,465-00 towards penalty on the ground that the vehicle was used as a stage carriage without a stage carriage permit. Hence, these writ petitions.
4. Smt. Amareswari and M/s. G.Suryanarayana K. Srinivasa Murthy K. Mangachari, P. Ramakoti and other learned counsel for the petitioners contended that the authorities under the Motor Vechiles Taxation Act are not competent to levy tax and penalty as state carriages in respect of vehicles covered by contract carriage permits for violation of any conditions of the permits and in any event the levy of full quarter tax where the offence has been detected in the second or third month of the quarter is contrary to the notification, dated 21-12-164. The learned IV Government Pleader opposed these applications contending inter alia that the transport authorities are empowered in these cases to levy the tax and penalty and there is no illegality.
5. On these facts and contentions raised by the respective counsel, the following questions arise for consideration. (1) Whether on the facts and in the circumstances, the authorities under the Motor vehicle Taxation Act are competent to levy the tax as a stage carriage in respect of Vechiles covered by contract carriage. permits (2) if question No. 1 is answered in the affirmative. Whether in the circumstances the penalty is livable and if so to what extent (3) where the offence of using the contract carriage as a state carriage is detected in the second or last month of the quarter, whether the authorities are entitled to levy full quarter tax and penalty
6. For a proper appreciation of the question it is necessary to advert to the scheme and intendment of the Andhra Pradesh Motor Vehicles Taxation Act. 1963 hereinafter called the 'Act' and the relevant provisions of the Motor Vehicles Act.1939.
7. In the year 1939, with a view to consolidate and armed the law relating to motor vehicles and to control transport, the Motor Vehicles Act, 1939 was enacted by the center. The Madras Motor Vehicles Taxation Act (Madras Act XIII of 1939) was enacted by the state legislature to provide for the levy of tax in respect of the Motor Vechiles Passengers and Goods Act, providing for levy for of tax on passenger fare and goods freight, which was adopted by Andhra, was passed. The Hyderabad Motor Vehicles Taxation Act was in force in so far as the Telangana Area was concerned. With the object of consolidating and amending the law relating to the levy of tax on motor vehicles in the State of Andhra Pradesh, the present Act V of 1963 has been enacted by the Andhra Pradesh State Legislature with effect from 1-4-1963. Section 2(c) defines 'licensing officer' as an officer appointed by the Government as such for the purposes of this Act. The expressions 'stage carriage' and 'contract carriage' have not been defined in this Act. Section 2 (I) reads thus:-
'Words and the expression used but not defined in this Act, shall have the meaning assigned to them in the Motor Vehicles Act.'
Hence we have to fall back on the provisions of the Motor Vehicles Act for the meaning of contract and state carriages.
8. Section 2(3) of the Motor Vehicles Act. 1939 defined 'contract carriage' assess 'a motor vehicle which carriage passenger or passengers for bird or reward under a contract express or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum and form one point to another without stopping to pick up or set down along the line of route passengers no included in the contract and includes a motor cab notwithstanding that the passengers may pay separate fares.'
By Section 2(29)of the same Act, 'stage carriage' is defined
'motor vehicle carrying or adopted to carry more then six persons excluding the driver which carries passengers for hire or reward to separate fares paid by or for individual passengers either for the whole journey or for stages of the journey.'
Section 48 deals with stage carriage permits, whereas Section 50 provides for the grant of contract carriages. Section 59 (3) imposes general conditions applicable to all permits. Under Section 51(2), the Regional Transport Authority may subject to any rules that may be made under this Act attach to the stage carriage permit any one or more of the conditions specified in clauses 1 to 10 of that section. Section 60 empowers the transport authority that granted the permit to cancel or suspend it for such a period as it thinks fit for breach of any of the conditions specified in S. 59(3) or of the permit or four use of the vehicle in any manner not authorised by the permit Sub-section (3) to Section 60 provides for compounding an offence in certain circumstances. Section 2(20) defines permit as the document issued by the Commissioner, State or Regional transport Authority authorising the user of a transport vehicle as a contract carriage or stage carriage or authoring the owner as a private carrier or a public carrier to use such a vehicle. Section 123 of the Act empowers the imposition of fine and sentence or improsonment for violation of a permit. Section 112 is a residual power vested in the transport authorities to impose fine of Rs.100/-- to Rs.300/- if specific penalty is not provided under the Act.
9. Section 3 of the Motor Vehicles Taxation Act is the charging section which reads thus:
'3(1) The Government may, not 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.
(2) The notification issued under sub-section (1) shall specify the class of motor vehicles on which, the rates for the periods at which, and the date from which, tax shall be levied.'
Under S. 3(1) the State Government is empowered to direct by notification to levy tax on every motor vehicle used or kept for use in a public place in the State. The liability to pay tax under the charging section accrues only when the motor vehicle is either used or kept for use in a public place within the State but not otherwise. The notification specifies the class of motor vehicles on which the rate for the periods at which and the date from which the the tax has to be levied. A tax of Rs.20/- per seat in respect of a contract carriage for every quarter of the year has to be paid, whereas in the case of a stage carriage. Rs.67-50 per seat is payable as tax.
10. Section 4 of the Act provides for the mode of payment of tax and the grant of license. The amount of tax payable under S. 3 shall be paid within 15 days after the commencement of the quarter of the year. The owner of the vehicle is at liberty to pay the tax either quarterly, half yearly, or annually and obtain a license thereof, Rule 3 of the Motor vehicles Taxation Rules proviso for endorsement in certificate of registration of tax payable. Section 4(b) of the Act provides for the refund of the tax at such rates as specified in the notification, where a motor vehicle in respect of which tax per any quarter, half year, or year was paid, has not been used during the whole quarter, half year or continuos part thereof not bering less than one month. It is also appropriate at this stage to refer to the notification issued by the Stage Government under Section 9 (1) of the Act in G.O.Ms, No. 2410, Home (Transport II) dated 21-12-64. That notification is applicable to motor vehicles which are intended to be used in public please in the State during the last one or two months of a quarter. Where the vehicle is to be used only during the second and third months of a quarter or parts thereof, the tax payable was four-fifths of the quarterly tax, whereas in the case of vehicles to be used only during the third month of a quarter or part thereof. only two-fifths of the quarterly tax is payable. Sub-section (5) to Section 4 prohibits any motor vehicle being used in any public pale in the State unless a license permitting its use has been obtained from the authorities.
11. Section 6 provides for levy of penalty for failure to pay tax, Under Section 6 of the Act , these owner of the person having possession or control of the vehicle is liable to pay penalty if the tax due has not been paid as specified in Section 4 of the Act. The amount of penalty may extend to trouble the quarterly tax in respect of the vehicle in question and the same shall be levied by the licensing officer by order in writing, section 7 empowers the recovery of tax, penalty or fine as arrears of land revenue. Section 8 authorises the authorities to seize and detain the motor vehicles in case of non-payment of tax. Section 9 deals with exemption, reduction or other modification of tax, Section 11 deals with the manner of payment of due under the Act, Section 12 provides for an appeal against the order of penalty or seizure of the vehicle by the aggrieved party within 30 days from the date of the communication of the order to such authority and on payment of such fees as may be prescribed. Section 16 empowers the State Government to make rules for carrying out all or any of the purposes of this Act.
12. This is short, is the accept and intendment of the Act.
13. We shall now proceed to examine the principal plea of the petitioners relating to the levy of tax. The sum and substance of the contention of the petitioners is that they were granted contract carriage permits on the basis of which tax was paid and any use of the vehicle otherwise than the one permissible under the permit would make them liable to be proceed against under Section 60,42, 112 and 123 of the Motor Vehicles Act, but not make them liable to pay tax and penalty as stage carriage. This argument of the petitioner is based on the assumption that the tax under the charging section, viz., Section 3 is livable on account of the grant of the permit to the vehicle as contract carriage. This assumption has no legs to stand. A reading of Section 3 of the Act manifests that the tax shall be levied on any motor vehicle for the user of or intention to use the vehicle in a public place with the State of Andhra Pradesh. It is the user of keeping for use of the vehicle in a public place with the State of Andhra Pradesh. It is the user of keeping for use of the vehicle in a public pale in the State that makes the motor vehicle chargeable to tax under Section 3 of the Act. Unless and until any motor vehicle is used or kept for use in a public place with the State, such vehicle is not exigible to tax under Section 3 of the Act. There is absolutely to mention either in Section 3 or the rules made thereunder that the permit of the vehicle is the basis on which the tax is levied. The provisions of the Motor Vehicles Act is so far as they levy of tax on motor vehicles is concerned must be held to have no application except that the use of the words and expression not defined in this Act be given the same meanings assigned to them in the Motor Vehicles Act. Not only the levy of tax, but the payment as well as recovery of tax are covered by the provisions of the Andhra Pradesh Motor Vehicles Taxation Act, 1963.
14. Therefore, we have no hesitation to hold that only the provisions of the Act and the rules made thereunder, but not the provisions of the Motor Vehicles Act providing punishment in case of violation of any conditions of the permit that should be looked into for deciding the question relating to the levy of tax an Motor Vehicles.
15. Under Article 265 of the Constitution, no tax shall be levied or collection except by authority of law. We shall first turn to the contention of the petitioner's counsel that the levy of the petitioner's counsel that the levy of tax in the instant case in illegal and without jurisdiction as there is no specific provision in the regard. True, as contended by the petitioners, there is no specific provision in the Act empowering the authorities to levy tax on any vehicle as a stage carriage on a motor vehicle on which tax was paid as a contract carriage when used as stage carriage. But the mere absence of a specific provision in the Act could not in any way make the levy of tax in these cases illegal or without jurisdiction. Section 3 as pointed out earlier empowers the authorities under the Act to levy tax on any vehicle used in public place within the State. The basis on which the levy of tax under S.3 is made is on the user or the intention to use the motor vehicle on public roads constructed and maintained by the State. The State has to contract and maintain public roads and owner of the motor vehicle has been charged for the use of the vehicle on such public roads or places within the State. Even if the vehicle is kept for use in a public place though not in fact used, still tax is exigible on such a motor vehicle. It is the nature of the user but not the permit that decides the nature of the vehicle whether a stage carriage or a contract carriage, Sub-sections (1) and (2) to Section 3 provides for a notification by the State Government to be made specifying the class of motor vehicles on which the rates for motor vehicles on which and the date from which the to shall be levied. Hence if a motor vehicle is used or left for use a stage carriage, the tax payable in respect of such a vehicle will be Rs.67-50 per seat. A combined reading of the Section 3 and the notification made thereunder manifests that the levy of rate of tax on the motor vehicles is based upon the nature of the user of the vehicle in question but not the permit of vehicle.
16. This brings us to the question whether a particular vehicles was used in any quarter either as a stage carriage or a contract carriage in order to fix the liability relating to the tax exigible under S.3 of the Act, This is a question of fact to be decided on the facts and circumstances of each case. The scheme of the Act appears to be that the minimum period for which tax is payable is a quarter and that has been taken as the basis for the levy of tax as per the notification issued by virtue of the provisions of sub-section (2) to S. 3 of the Act. Where it is found as a fact that a particular motor vehicles has been used or kept for use as a stage carriage even fro a day or a portion of any quarter, it is must for the purpose of the Act he held as a stage carriage liable for tax on that basis. The mere fact that tax was already paid by the operate as a contract carriage and he did not intend to use the vehicle as a stage carriage in that quarter would not in anyway disentitle the authorities from levying the tax on such vehicle as stage carriage in view of the fact that it was used in portion of the quarter as a stage carriage.
17. This view of ours find support from the decided cases of this court, viz., Kesava Rao v. State of Andh Pradesh, (1961) 1 Andh WR 416, Ramakrishna Setty v. State of A.P., : AIR1965AP420 and Public Prospector v. Ramakrishna Rao, 1965-1 Andh WR 1 = Andh WR 416, it was observed that the Motor Vehicles Act had nothing to do with the imposition of taxes. In that case a Bench of 3 of the Hyderabad Motor Vehicles Taxation Act, tax was paid for use of the vehicle in the Telegna Area and Section 4 of the Madras Motor Vehicles Taxation Act, postulates collection of tax for the use of the roads in the Andhra Area. It was also observed that the taxes are not paid for the registration of the vehicles but levied for plying the vehicles on roads in the State. Another Division Bench of this court in : AIR1965AP420 had held that a lorry registered in the State of Mysore and found plying casually on an unauthorised route in the State on an unauthorised route in the State of Andhra Pradesh was liable to pay tax to the Andhra Pradesh Government as the use of the Public road not covered by the petitioner's permit amounted to the use of the public road for the purposes of Section 4 (1) and Section 5 (1) of the Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act (III of 1939).
18. In the case of : AIR1965AP79 , it was held that the user of the tractor with the trailer attached from non-agricultural purposes even on some days sonny in a quarter would makes the vehicles liable to pay tax under the provisions of the Motor Vehicles Taxation Act, 19939.
19. In Writ Petn. No. 1910 of 1966 (AP), Narasimham, J upheld the levy of tax as stage carriage when a contract carriage plied as stage carriage Seshachalapathi, J also has taken the same view in W.P.No. 52 of 1966 (AP).
20. Hence, we have no hesitation to hold that the levy of tax on the petitioners' vehicles found to have been used once or casually in the quarter as stage carriage although tax was paid on the basis of contract carriage, must be held as valid.
21. We shall examine the contention of Sri Suryanayuana that the levy of tax is not exigible in the present cases as there is no separate and independent machinery provided under the Act for such levy. The Regional Transport Office has been appointed by the State Government as a 'licensing officer' for purposes of this Act. It is the licensing officer that leaves the tax and grants the license under Section 4 for the use of any motor vehicle in a public place within the State of Andhra Pradesh for any particular period on payment of requisite fee with an endorsement in the certificate of registration to the effect that tax has been paid or no tax is payable. On a reading of the various provisions of the Act and the rules made thereunder we are satisfied that the licensing officer is the authority who is competent to levy tax as well as penalty under the Act. The mere absence of any provision in the Act to appeal against the levy of tax will not, in our considered opinion, make the impost itself invalid, as the liability to pay tax accrues automatically by virtue of the provisions of Section 3 and there is no escape for any owner of the vehicle from paying the same.
22. That apart, the licensing officer who is empowered under the provisions of the Act to issue the license must be held to have incidental power to enquire and decide the incidental questions relating to the user of the vehicle and others, See Central Bank of India Ltd. v. Rajagoplan, : (1963)IILLJ89SC and Income Tax Officer v. Mohd Kunhi, AIR 1969 SC 430. Hence, we do not find any substance in this plea of the petitioners.
23. The fact that the vehicle is made liable to tax as a stage carriage on the basis of its user for any period irrespective of its duration during the quarter will not anyway absolve the owner of the vehicle from being proceeded against by provisions of Sections 60,112,123 of the Motor Vehicles Act for the violation of the condition of the permit. The violation in the instant case, is , a contract carriage being used case is, a contract which amounts to the use of the vehicle for a purpose other than the one permitted by the authorities. Hence, it is open to the transport authorities to proceed against the petitioners for violation of the conditions of the permit, although they are liable to pay tax at the rate applicable to stage carriages for user of the vehicle in that manner for any period during the quarter. There is no hard and fast rule in this regard. It is for the concerned authorities whether or not to proceed against the owner of the vehicle for violation of the conditions of the permit, in addition to the levy of tax as a stage carriage depending upon the facts and circumstances.
24. In these circumstances and for the reasons stated above questions No.1 is answered in the affirmative and against the petitioners.
25. The next question that falls for determination is whether the penalty levied on the petitioners is valid and justifiable. Indisputable, all the petitioners have paid tax for their vehicles as contract carriages within 15 days after the commencement of the quarter in question . It is not the case of the transport authorities that at the beginning of the quarter, the petitioners intended to use their vehicles as stage carriages. Until their vehicles were detached and found to be used as stage carriages, it cannot be said that the vehicles were originally intended or kept for use as stage carriage but no as contract carriage. There is also no demand of tax due to be paid by the petitioners either in the beginning of the quarter or at any time subsequent to the enhanced tax sought to be levied on the basis of the user of the vehicles as stage carriages. Section 6 itself postulates the levy of penalty only when the amount of tax due is not paid as per the provisions of Section 4 of the Act. Admittedly there is no demand for payment of tax from the petitioners as stage carriages, until the passing of the impugned orders. Unless and until the petitioners have committed default in payment of tax due or demanded it must be held that the provisions of Section 6 of the Act are not attracted making the petitioners liable to pay the penalty. The provisions for levy off penalty is made only with the sole object of seeing that the amount of tax levied or found is paid without any default. Where the amount of tax payable of demanded has in fact been paid within the time allowed under Section 4 or any orders passed by the licensing authority, it can by no stretch of reasoning be held that default by the operator in payment of tax has been committed, making him liable to pay penalty under Section 6 of the Act. The very fact that tax penalty have been demanded in the present cases, in the same order would clearly establish that the provisions of Section 6 of the Act are not attracted. Judged from any angle, it must be held that the penalties levied in this case are illegal and are liable to be quashed.
26. There is another weighty reason justifying the interference of this court relating to the levy of penalty. The uniform levy of maximum amount of penalty in all the cases irrespective of the facts and circumstances of each case also shows that the authorised concerned have mechanically levied the maximum penalty. The authorises under the Act are no doubt competent to levy penalty which may extend to double the quarterly tax in respect of a particular vehicle. However, the levy of maximum penalty by the licensing officer, in each and every case mechanical, without applying his mind to the facts, cannot be upheld. There is no hard and fast rule in this regard. Where the Act or the rules do not specifically provide any guidelines for the exercise of such power, it should be exercised by the statutory authority in a fair judicious, jut and reasonable manner. The exercise of the power under Section 6 by the authorities is a quasi-judicial one and the orders must be speaking orders. Otherwise, it would give room for arbitrary exercise of the power by the concerned authorities. Hence, for these reasons stated, we hold that the penalty levied in all the cases must be set aside. and accordingly question No.2 is answered in favour of the petitioners.
27. The third question that arises for decision is about the application or otherwise of the notification issued in G.O.Ms. No. 2410 Home (Transport II) dated 21-12-64. True, as contended by the learned IV Government Pleader that this notification gives some concession or rebate to the owners of motor vehicles intended to be used in public places during the last one or two months of a quarter. But there is no applicable to the cases of vehicles which were found to be used as stage carriages though tax was paid on the basis of contract carriages. Except stating that this G.O. will apply only to the bona fide class of owners of the motor vehicles who intended to use the vehicles only during the last one or two months of a quarter the learned IV Government pleader Is unable to substantiate his contention. It is not possible on a reading of the notification to hold that this G.O. is applicable to only such bona fide owners but not to those whose vehicles were found in the second or third month of the quarter to be used third month of the quarter to be used as stage carriages though tax was paid in the beginning of the quarter on their intended use as contract carriages. It is not the case of the department nor any material placed before us to show that the petitioners intended in the beginning of the quarter to use their vehicles as stage carriages. The owners of the stage carriages would sometimes hand over their vehicles along with their driver, conductor and checking staff to the person who contracted to carry a number of passengers from one place to another as agreed upon and sometimes there is a possibility of the driver and the conductor as well as the person who contracted to allow the persons on the may without the knowledge of the owner of the vehicle and carry them for some distance on the route in question.
28. As pointed out earlier, the scheme of the Act when read with the rules and this notification appears, to be that the concession contemplated is for a minimum period of one month. Though tax has been paid for the entire quarter by the petitioners as contract carriage they are liable to pay tax as stage carriages from the month when their vehicles were found to be used in any quarter as stage carriages. True, as pointed out by the learned Government Pleader the Division Bench of this Court in : AIR1965AP420 (supra) has directed the owner of the vehicle to pay tax for the entire quarter even when the vehicle was found to have been used in the last month of the quarter. But this notification does not appear to have been brought to the notice of the learned Judges in that it does not render any assistance to the present controversy relating to the applicability or otherwise of the notification.
29. We, therefore, hold that the petitioners are entitled to the benefits conferred by the notification referred to above. In this view and for the reasons stated supra, the impugned orders levying tax and penalty on the petitioners must be quashed and the matters remitted to the concerned licensing officers with a direction to levy appropriate tax taking into consideration the facts and circumstances of each on the application of the notification referred to above and pass appropriate orders according to law affording reasonable opportunity to the petitioners.
30. In the result, the Writ petitioners are allowed to the extent indicated above. There will be no order as to costs, Advocate fee is fixed at Rupees 250/- in W.P. 3565/67 and Rs. 50/- in each of the others cases.
31. Writ absolute will allow.
32. Order accordingly.