All Orissa Car Taxi Owners and Drivers Mahasangha vs State of Orissa and Others

Indrajit Mahanty, J.—The All Orissa Car Taxi Owners and Drivers Mahasangha and various members of the said association have filed the present writ application seeking to challenge the Constitutional validity of the Orissa Motor Vehicles Taxation (Amendment) Act, 2004 (in short the OMVT Act).

It is averred that the Act was published in the Orissa Gazette and come into force on 25.2.2005, whereby the rate of tax stipulated in Schedule-I (renumbered as Schedule-Ill) was substantially enhanced.

The contention of Sri J. Pal, Learned Counsel appearing for the Petitioners was that in view of the proviso to Sub-section (2) of Section 3 of Orissa Motor Vehicles Taxation Act, 1975, the State Government cannot increase the rate of tax in Schedule-I in derogation to said proviso.

Section 3 of OMVT Act is quoted below:

Levy of Tax - (1) Subject to the other provisions of this Act, there shall be levied on every motor vehicle used or kept for use within the State a tax at the rate specified in a (Schedule-I).

(2) The State Government may by notification from time to time increase the rate of tax specified in the (Schedule-I).

Provided that such increase shall not exceed fifty percent of the rate specified in Schedule-I.

It is submitted by the Learned Counsel for the Petitioners that on a plain reading of the aforesaid proviso to Section 3, the rate of tax could not be increased in derogation to the said proviso and the Legislature in its wisdom had imposed an embargo by way of providing a proviso to Sub-section (2) of Section 3 of OMVT Act. The impugned notification being in violation of the same has to be struck down as ultra vires to the statute itself, i.e. OMVT Act, 1975. Therefore, it is submitted that in terms of Sub-section (2) of Section 3 of the OMVT Act, 1975, the State was not empowered to amend Schedule-I by enhancing it beyond 5Q% of the rate originally specified in the Schedule.

Learned Counsel has provided a chart indicating the enhancement made pursuant to the impugned amendment to Schedule-I, which is given below.

Schedule No. 1

Motor Vehicles other than those liable to tax under the forgoing provisions of this Schedule.

i) Weighing not more than 762 kilograms unladen: Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 612.00: after Amendment. 11 00.00

ii) Weighing more than 762 kilograms but not more than 1524 kilograms unladen: Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 333.00: after Amendments 600.00

iii) Weighing more than 1524 kilograms but not more than 2286 kilograms unladen : Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 414.00: after Amendment: 2100.00

iv) Weighing more than 2286 kilograms but not more than 3048 kilograms unladen: Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 495.00 : after Amendment: 2500.00

v) Weighing more than3048 kilograms unladen: Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment :603.00 : after Amendment: 3000.00

vi) Extra tax payable in respect of such vehicle used for drawing trailers.

(a) Having such trailer not exceeding 1016 kilograms in weight unladen: Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 90.00 : after Amendment : 300.00

(b) For each trailer exceeding 1016 kilograms in weight unladen : Annual Rate of Tax for vehicles fitted entirely pneumatic tyres before Amendment: 180.00 : after Amendment: 600.00.

In support of his contention, Learned Counsel has placed reliance on the following Judgments:

(i) J. Srinivasa Rao v. Govt. of A.P. and Anr, 2006 (12) SCC 607

(ii) Hardev Motor Transport Vs. State of M.P. and Others,

In response to the aforesaid contention, Sri Panda, Learned Addl. Standing Counsel on behalf of the State vehemently argued that no objection could be raised against the impugned Amending Act (Orissa Act 3 of 2005) since, it was within the competence of the State Legislature to carry out the amendment. He further submitted that the impugned Amending Act (Orissa Act 3 of 2005) was not a notification as contemplated under the proviso to Sub-section (2) of Section 3 of OMVT Act, 1975. Learned Counsel submitted that in the impugned notification in the Orissa Gazette, it would be clear that this notification is not a notification under the proviso of Sub-section (2) of Section 3 of the OMVT Act, 1975, instead this is a notification published in the Orissa Gazette of an amendment carried out to the Orissa Motor Vehicles Taxation Act, 1975. It is well settled in law that whereas the statute may stipulate guidelines or prescribe limitations for the guidance of implementing authorities yet, no/statute or enactment can ever limit the authority of the Legislature itself. This being a Legislative Amendment to the OMVT, 1975, the same cannot be treated as if it is a notification under the proviso of Sub-section (2) of Section 3 of the OMVT Act, 1975. In essence, Learned Addl. Standing Counsel submitted that whereas the proviso to Sub-section (2) of Section 3 of OMVT Act, 1975 was a limit prescribed by the Legislature to the subsequent action by the State (Subordinate Legislature) to vary or enhance the rates of tax of Motor Vehicles, the same could not limit or bind the authority of the State Legislature itself to carry out any amendment to the OMVT Act.

Sri Pal, Learned Counsel for the Petitioners placed strong reliance upon the Judgment of the Apex Court in the case of J. Srinivasa Rao (supra). On a perusal of the said Judgment, it is seen that the Hon''ble Supreme Court while considering the similar provision of Andhra Pradesh Motor Vehicles Taxation Act to the Section 3 of the Orissa Motor Vehicles Taxation Act, came to held that the rate of tax could not be increased in derogation to the proviso appended to Section 3 of the Act and accordingly, held that the notification impugned therein sought to "change the basis of the mode of taxation" is therefore, illegal and unsustainable. In the said case, challenge was made to the notification issued by the State of Andhra Pradesh, purportedly, changing the basis of the mode of taxation, whereas, in the Schedule originally appended to the Act, the rate of tax permitted to carry more than six passengers but not. more than 12 passengers was prescribed at Rs. 1,000 but by virtue of, the notification issued by the State Government dated 27.4.1997, the rate of tax was modified to Rs. 600 per seat. The effect of such notification effectively enhanced the tax leviable beyond the limits prescribed under the proviso to Section 3 of the Andhra Pradesh Motor Vehicles Act.

We are afraid that the reliance placed by the Learned Counsel for the Petitioners on the aforesaid Judgment, in the facts of the present case, is misplaced. In the present case the impugned notification made is not by the statutory authority exercising statutory power, but, instead the impugned notification in the Gazette, is of an amendment to the Orissa Motor Vehicles Taxation Act, 1975. While the proviso to the Section may limit the discretion of the subordinate legislation, the said proviso could not be read as limiting the authority of the Legislature from effecting any amendment. Therefore, since the present impugned notification is by way of competent legislation, the said Judgment relied upon by the Learned Counsel for the Petitioners is not applicable.

Learned Counsel for the Petitioners also placed reliance upon the case of Hardev Motor Transport (supra). In the said Judgment, challenge was made to the amendment of the M.P. Motoryan Karadhan Adhiniyam, 2004 and in particular to the Explanation (7) of the Schedule-I, which reads as follows:

Explanation (7) - The words ''plying without permit'' in Clause (g) shall include plying of a public service vehicle on an unauthorized route or making a trip not authorized by a permit granted under the Motor Vehicles Act, 1988 but shall not include the plying of a public service vehicle under circumstances laid down in Clause (m) of Sub-section (3) of Section 66 of the Motor Vehicles Act, 1988.

This Explanation has been held to be unconstitutional and declared as such. The aforesaid case and the challenge in the present case are distinct on facts. The present case is not a case where the Amendment Act and the amendment to the Schedule, is not in consonance with any substantive proviso of the main Act. In the present case, the State Legislature amended the Orissa Motor Vehicles Act, 1975 as well as the Schedule appended thereto without in any manner effecting any change to Section 3 of the Orissa Motor Vehicles Act or the proviso thereto. Section 3 and its proviso continue to exist in the statute in the original form. The State Legislature was within its competence to carry out the amendment and as such, an amendment is in conformity with the charging Section. Therefore, the impugned amendment is in consonance with the substantive provisions with the main Act and is, therefore, held to be constitutional.

In the light of the discussions made hereinabove on both facts and law, we are of the view that the challenge in the present writ application is misconceived and the challenge to the constitutional authority of the Orissa Motor Vehicles Taxation Act, 2004 must fail and is hereby dismissed.

No costs.

B.S. Chauhan, C.J.

I agree.