S. Natarajan, J.
1. The petitioner impugns the order of the respondent in Memo. No. R. 27742/ B-1/76, dated 6th July, 1976 demanding a sum of Rs. 22,484 towards payment of tax and penalty for his stage carnage bearing registration No. MDB 2250 and plying on the route Coimbatore to Karaidibavi viz Singanallur, Ondiputhur, Chinthamampudur, Sulur, Sulur Aerodrome and Paruvai. He therefore prays for the issue for a writ of certiorari, or any other writ or direction to quash the impugned order.
2. The stage carriage MDB 2250, was originally owned by one S.S. Venkatrama Thevar. During the quarter 1st April, 1974 to 30th June, 1974, he plied the bus till 23rd April, 1974 and thereafter stopped the vehicle. As per Rules he should have paid the quarterly tax for the vehicle on or before 18th April, 1974 but, he failed to remit the tax. By notice dated 23rd April, 1974 and 14th May, 1974, he was called upon to pay the full tax for the quarter and as against these demands, he filed Writ Petition No. 1972 of 1974, and that petition was disposed of following the Judgment in W.P. No. 774, etc. of 1974, dated 204th September, 1974.
3. After the filing of the writ petition the said Venkatarama Thevar applied for transfer of the bus in favour of the petitioner and the transfer was allowed on 7th March, 1975, granting time for four months for submission of record. As the permit was due to expire on 16th August, 1974, Venkatarama Thevar applied for renewal on 15th April, 1974, submitting only the part A permit of the vehicle. He reported that the registration certificate of. the vehicle was lost and he prayed for the issue of a duplicate certificate. In view of the transfer of the permit in his favour the petitioner applied for the issue of a duplicate registration certificate to him, but as the duplicate certificate was not issued, he filed W.P. No. 5363 of 1975, for a mandamus being issued to the Regional Transport Officer to issue the certificate. In the meanwhile, the Regional Transport Authority refused renewal of the permit on the ground that records had not been produced. As against that order the petitioner filed W.P. No. 7332 of 1975, W.P. No. 5363 of 1975 and 7332 of 1975 were heard together and this Court allowed both the petitions. Pursuant to the orders of this Court, the petitioner obtained a duplicate registration certificate as well as an order of transfer of the permit in his favour and he began to ply the bus from 26th June, 1976. Till then, i.e., from 26th April, 1974, onwards, the bus had been stopped from service and stoppage report had been submitted to the respondent for the period in question.
4. Though the petitioner began to ply the bus from 26th June, 1976 onwards after paying the tax due for June, 1976 he was informed by the Motor Vehicles Inspector that unless he paid the tax arrears and penalty amounting to Rs. 22,484 for the quarter ended 30th June, 1974 the tax endorsement for the quarter ended 30th September, 1976 would not be effected. Soon after, the petitioner received the impugned notice informing him that if the sum of Rs. 22,484 was not remitted within 15 days time, action would be taken under the Revenue Recovery Act, to collect the amount. It is in that situation the petitioner .has rushed to this Court for the issue of a writ of certiorari.
5. The petitioner submits that since the bus did not ply on the route after 26th April, 1974 the demand of tax for the entire quarter ended 30th June, 1974, together with penalty is not legal in view of the judgment of this Court in W.P. No. 777, etc. of 1974, He then says that subsequent to the disposal of the W.P. No. 1972 of 1974 filed by Venkatarama Thevar a fresh demand should have been made on .him for payment of the tax and in the absence of such notice, he, (the petitioner) should have been issued a show cause notice before the demand was made on him. The petitioner also questions the propriety and legality of the demand for payment of penalty in addition to respondent's payment of tax for the quarter in question.
6. In the counter-affidavit filed on behalf of the respondent, it is stated that since the bus had plied on the route till 25th April, 1974, the permit holder, viz., Venkatarama Thevar, should have paid the full tax for the quarter within that time, the respondent is entitled to demand payment of tax for the full quarter together with penalty at 200 per cent. The judgment in W.P. No. 777 etc , of 1974 does not affect the validity of the demand because of the bus plying on the route till 25th April, 1974 and because of non-remittance of tax within the time allowed by law and failure to send stoppage report in time. The transfer of the bus in favour of the petitioner was allowed subject to the condition the petitioner should pay all arrears of tax due in respect of the vehicle and the petitioner had also given an undertaking to that effect. Having regard to those features, it is not open to the petitioner to question the validity of the demand relating to tax and penalty for the quarter ended 30th June, 1974. Inasmuch as demand notice had already been served on Venkatarama Thevar, there was no need to issue a fresh notice to him after the disposal of his petition, viz., W.P. No. 1972 of 1974, and as far as the petitioner is concerned, no show cause notice was called for in view of his undertaking to pay the tax arrears due on the vehicle. The respondent has further stated that though the bus had plied only upto 25th April, 1974, the petitioner has to pay tax for the full quarter because, as per the Act and the Rules, if the bus had plied even for a limited period during the quarter, the permit holder has to remit tax for the entire quarter within the prescribed time and thereafter apply for refund of tax in accordance with the Rules for the period for which the bus did not ply. There is no provision in the Act and the Rules to collect tax for the month of April alone on account of the bus having plied only for a certain number of days in that month.
7. Mr. Thirumalai, learned Counsel for the petitioner, advanced two principal contentions to assail the impugned order. The first is that inasmuch as the vehicle had plied only for 25 days in April, 1974, and had not plied thereafter till resumption of service on 26th June, 1976 the respondent is entitled to ask for payment of tax only for the month of April, 1974 and not for the months of May and June, 1974. Secondly, the petitioner cannot be called upon to pay penalty for nonpayment of tax by. Venkatarama Thevar for the quarter ended 30th June, 1974.
8. To appreciate the arguments of Mr. Thirumalai, it is necessary to refer to some of the provisions of the Tamil Nadu Motor Vehicles Taxation Act, 1974 (hereinafter referred to as the Act) and the Tamil Nadu Motor Vehicles Taxation Rules (hereinafter refered to as the Rules) Section 2(7) of the Act defines a 'registered owner' as a person in whose name a motor vehicle is registered or deemed to be registered under the Motor Vehicles Act. Section 2(8) defines 'tax' as tax leviable under the Motor Vehicles Act. Section 3(1) lays down that subject to the provisions of Sub-section (2) tax shall be levied on every motor vehicle kept or used in the State of Tamil Nadu at the rates specified for such vehicle in the Schedule . Section 4 lays down that the tax levied under the Motor Vehicles Act shall be paid in the manner prescribed, by the registered owner or by any other person having possession or control of the motor vehicle. Section 5 deals with liability to payment of tax by persons succeeding to ownership or having possesion or control of motor vehicles. As this is an important Section to be noted, it is extracted in full:-
Section 7: If the tax leviable in respect of any motor vehicle remains unpaid by any person liable for payment thereof and such person, before paying the tax, has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who is in possession or control of such vehicles, shall be liable to pay the said tax:
Provided that nothing contained in this section shall be deemed to affect the liability to pay the said tax of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle.
Section 8 deals with the period within which the tax has to be paid. Section 18 deals with penalty for failure to pay tax and that section also needs extraction in full:
Section 15: If the tax due in respect of any motor vehicle has not been paid within the period prescribed under Section 8, the registered owner or the person having possession or control thereof shall:
(a) pay, in addition to the tax, a penalty of such sum, not exceeding twice the amount of the quaterly tax payable, as may be prescribed, and different sums may be prescribed for different classes of motor vehicles and for different periods; and
(b) also be punishable with fine which may extend to Rs. 50 and the amount of the tax due by him in respect of such vehicle for the quarter or quarters concerned together with the penalty referred to in Clause (a) shall also be recovered as if such tax and penalty were a fine.
The penultimate section that needs reference is, Section 16 which provides for recovery of tax or penalty as arrears of land revenue. Lastly, I may advert to Section 18 which states that if the due in respect of a motor vehicle is not paid within the prescribed period, the validity of the permit shall become ineffective from the date of expiry of the said period until such time the tax is actually paid. Section 24 gives power to Government to make Rules for carrying out the purposes of the Act. Turning to the Rules, Rule 8 prescribes the penalty for non-payment of tax within the time prescribed. As per Clause (4) of the Rule, if the tax is paid beyond 45 days and outside the quarter for which the tax is due, then penalty at twice the quarterly tax with surcharge has to be paid. Rule 11 deals with refund of tax.
9. Having referred to some of the salient provisions in the Act and the Rules regarding the liability to pay tax and penalty, let us consider the second contention of the petitioner that he cannot be called upon to pay penalty for the default committed by the original permit-holder in payment of tax. So far as the liability to payment of tax is concerned, Section 7 clearly lays down that if the tax leviable in respect of any motor vehicles remains unpaid by the person liable to pay the tax and such person has, before paying the tax, transferred the ownership of the vehicle to another person or has ceased to be in possession or control of such vehicle, then the person to whom the ownership of the vehicle had been transferred or the person who is in possession or control of the vehicle shall be liable to pay the said tax. The proviso to the section says that notwithstanding the liability of the transferee of the vehicle or the person having possession or control of the vehicle to pay the tax, the liability of the original owner of the vehicle will continue to subsist, which means that the authorities can successfully call upon the original owner also to pay the tax. On the other hand, Section 15 which deals with penalty for failure to pay the tax makes reference only to the registered owner or the person having possession or control of the vehicle, and there is no reference whatever to the transferee of the ownership of the vehicle. On account of the significant difference in the wording of the two sections, the petitioner is justified in contending that as a transferee of the ownership of the vehicle, he can be called upon to pay only the arrears of tax and not the penalty realisable under the Act for non-payment of the tax in time. The learned Government Pleader, would, however, contend that arrears of tax must be deemed to include penalty as well and as such, the petitioner, as a transferee of the ownership of the vehicle, is also bound to pay the penalty besides the arrears of tax. I find no support for this argument in the provisions of the tax. 'Tax' has been defined under Section 2(8) as tax leviable under the Act. It is not stated that tax shall mean and include penalty also. Likewise, Sections 3 and 4 which deal with levy of tax and payment of tax do not also provide for penalty being included within the meaning of the word 'tax'. If it was the intention of the Legislature that a transferee of the vehicle should pay not only tax arrears payable by the transferor, but also penalty for late payment of tax, it would have clearly provided for it in Section 15. On the other .hand, what Section 15 lays down is that the registered owner or the person having possession or control of the vehicle should pay the prescribed penalty for non-payment of tax in time. The words 'person having possession or control of the vehicle' cannot be taken to include a transferee of the ownership of the vehicle, because Section 7 has categorised a transferee of the ownership of the vehicle as a different person 'from one who is in possession or control of the vehicle. In the case of a transfer, the possession and control of the vehicle will pass on to the transferee in his capacity as owner, but in the case of a person merely having' possession or control of the vehicle, the ownership will continue to be with the original owner and only the possession or management of the vehicle will pass on to the agent. There is, therefore, no scope for contending that the words 'person having possession or control thereof occurring in Section 15 should be taken to include a transferee of the ownership of the vehicle.
10. The learned Government Pleader then argued that under Section 16 of the Act any tax or penalty due under the Act may be recovered as an arrear of land revenue and since this provision does not make any difference between arrears of tax and penalty a transferee must also be held bound to pay the penalty. I am not impressed with this argument because the Section is general in its terms and will cover recovery of tax or penalty when the vehicle is in the hands of the original owner as well as his agent. Possibly, it may also apply to those cases where a transferee of the vehicle has to pay arrears of tax. Such being the case, it cannot be accepted that Section 16 has not made any difference between recovery of tax as well as recovery of penalty and from that must be construed that penalty can be recovered not only from the original owner, but also from the transferee. As a matter of fact, the latter portion of Section 16 militates against the acceptance of the Government Pleader's contention. In this portion it is stated that for the purposes of collecting tax or penalty, the motor vehicle in question or its accessories may be distrained and sold whether or not the vehicle or the accessories are in the possession or control of the person liable to pay the tax or such penalty. There is no reference to the ownership of the vehicle, but only to the possession or control of the vehicle. This would naturally mean that the vehicle or its accessories can be distrained, if they are in the possession of the original owner or even if they are in the possession and control of some other party on his behalf. These words will not apply to a person having possession or control of the vehicle as a lawful transferee of the ownership from the original owner. Rule 8 of the Rules also refers to the registered owner or the person haying possession or control of the vehicle being liable to pay penalty at the rates mentioned therein. There is no reference whatever to a transferee of the vehicle also being liable to pay penalty is accordance with the rates given in the Rule. Therefore, on a consideration of the relevant provisions of the Act and the Rules, I am of opinion that the Legislature wanted to make a clear distinction between the incidence of tax and the incidence of penalty, in that the incidence of tax was attached to the vehicle whereas the incidence of penalty was directed on the person committing default in payment of tax. Accordingly, even a transferee of the vehicle has been made liable to pay, under Section 7, the arrears of tax due and payable on the vehicle before the ownership was transferred, whereas the penalty payable for late payment or non-payment of tax was to be borne by the person committing the default which, in the case of a transfer of a vehicle would mean the original owner. Lest the original owner should evade his liability to pay penalty on the ground he was not having possession or control of the vehicle, Section 15 as well as Rule 8 has provided that the incidence of penalty cannot be avoided merely because the registered owner has put the vehicle in the possession or control of Some other party while retaining the ownership in himself. In that state of affairs, I have to sustain the petitioner's contention that as a transferee he is not liable to pay the penalty imposed on the original owner.
11. Now, taking up the first contention of the petitioner, that since the bus did not ply on the route from 26th April, 1974, the respondent is not justified in demanding tax for all the three months of the quarter, 1st April, 1974 to 30th June, 1974, the admitted facts are that the bus did not ply after 25th April, 1974. As such, if Venkatarama Thevar had paid the tax within the stipulated time, he could have applied for and got refund of tax for the months of May and June, 1974. Because he had failed to remit the tax in time and apply for refund for the two months during which the bus did not ply, the petitioner cannot be made to suffer. We have to bear in mind the circumstances under which the petitioner had the vehicle transferred to his name. The registration certificate was not available and the petitioner had to seek the intervention of this Court to get a duplicate certificate. Likewise, he had also to get a writ of mandamus to have the vehicle transferred to his name. In these circumstances, the petitioner could not have known that tax had not been paid for the quarter in question and Venkatarama Thevar had not applied for refund of tax for the two months when the bus did not ply. On account of these factors there is force in the contention of the petitioner that he can be called upon to pay tax only for the month of April, 1974. No doubt, he had given an undertaking at the time of getting the transfer that he will pay arrears of tax due and payable on the vehicle. But the undertaking cannot mean that the petitioner had agreed to pay tax arrears irrespective of the question whether he was liable to pay them or not. The undertaking can be confined only to such portion of the tax as the petitioner is legally bound to pay. Bearing in mind the facts of the petitioner's case the words 'tax leviable in respect of any motor vehicle remaining unpaid' occurring in Section 7 must be held referable only to tax for the month of April, 1974, and not to the subsequent two months when the bus did not' ply. In that view of the matter, the petitioner's liability to pay tax arises only for the month of April, 1974. This view of mine is in accordance with Mohan, J., in Paramakkudi Bus Transports Pvt., Ltd. v. District Transport Officer, Ramanathapuram W.P. No. 2021 of 1976, where the learned Judge has held that when the bus in Question did not ply beyond 26th January, 197S, the authorities cannot insist? upon payment of tax for the months of February and March, 1975.
12. For the reasons abovesaid, the writ petition will stand allowed and the rule nisi will be made absolute, subject to the condition that the petitioner pays the tax due on the vehicle for the month of April, 1974. The petitioner is given four weeks' time from today to pay the said tax, if the same has not already been paid. The petitioner will be entitled to his costs in this petition. Counsel's fee is fixed at Rs. 150.