Capital Bus Service Private Limited vs Assessing Authority (Passanger Tax) and Others

T.H.B. Chalapathi, J.—In these four petitions, the only point of law that arises is whether the petitioner i.e. Capital Bus Service Private Ltd. which is carrying the postal mail bags is liable to pay the tax under the Punjab Passenger & Goods Taxation Act, 1952 (hereinafter called as the ''Act'')

The petitioner is a Stage Carriage Permit Holder for various routes on Delhi-Faridabad, Delhi-Hodel and Delhi-Palwal. While granting permits to the petitioner, the State Transport Authority imposed a condition on the permits that mails should be carried on any of the vehicles authorised by the permits. Accordingly, the petitioner has been carrying the postal mails on the three routes i.e. Faridabad to Hodel, Faridabad to Palwal and Faridabad to Delhi. By the impugned order, the Assessing Authority of Excise and Taxation Department of Faridabad imposed tax on postal subsidy received by the petitioner from the Postal Department. The petitioner is challenging the imposition of tax on the subsidy which was given by the postal authorities for carrying the postal mail bags in its Passengers vehicles under the Stage Carriage permits issued by the State Transport Authority.

There is no dispute that one of the conditions of the permit is that the petitioner shall carry a postal mail bag on any of the vehicles authorised by the permit issued to the petitioner. There is also no dispute that the postal authorities are giving some subsidy to the petitioner for carrying the postal mail bags on the vehicles of the petitioner.

Annexure P-l is a notification issued by the State of Haryana, which reads as follows:-

"In exercise of the powers conferred by Section 10 of the Punjab Passengers and Goods Taxation Act 1952, the Governor is pleased to exemption from the payment of goods tax, the mail motor vehicles of the P&T Department of the Central Govt. which are used for carrying mail in Haryana."

Thus, it is clear that from 3.12.1981 exemption was granted for payment of goods tax in regard to carrying the postal mails of the P&T Department of the Central Government, but the period in question for which the demand notice was issued relates to prior to the date of the notification. The learned counsel for the petitioner argued that the property of the Central Government was exempted from taxation. Under Article 285 of the Constitution of India, the postal mail is a property of the Central Government and as per the conditions of the permit, the petitioner is duty-bound to carry the postal mail bags in the stage carriage vehicles and, therefore, no goods tax by the State can be imposed as the postal mail carried in its vehicles is the property of the Union of india. Article 285 of the Constitution reads as follows:-

"The property of the Union shall, save in so far as parliament by law otherwise provide, be exempted from all taxes imposed by a state or by any authority within a State."

The question to be determined in these writ petitions is whether the postal bags carried by the petitioners in its buses can be deemed to be the property of the Union. The Postal Department of the Union undertakes to deliver the letters from one place to another place. u/s 4 of the Indian Post Office Act, 1898, it is the exclusive privilege of the Central Government to convey by post from one place to another all letters. The postal Department is a Government Department and it is performing the functions of the Central Government. Therefore, the postal bags containing the postal letters to be delivered from one place to another are deemed to be the property of the Central Government. As the Central Government is in exclusive possession of such letters it is the duty of the Central Government to deliver the letters to the addresses. In the normal course, the Postal authorities are expected to deliver the letters to the addresses. Therefore carrying postal bags in the passenger vehicles is in the discharge of the functions of the Union Government. Therefore, I am of the opinion that the transporters, who have been obligated to carry the postal bags in their passenger vehicles from one place to another as per the conditions stipulated in the grant of permit cannot be said to be liable to pay the goods tax under the Punjab Passengers and Goods Act, 1952 as the operator of the service is only discharging the functions of the Union Government. The carrier was only paid subsidy but not the actual expenses incurred by it for carrying the postal bags. I am, therefore, of the opinion that the writ petitioners are not required to pay any goods tax for carrying postal mail bags under the provisions of Punjab Passengers and Goods Act, 1952. The demand of tax for carrying postal mail bags, therefore, cannot be sustained and the writ petitions deserve to be allowed.

The writ petitions are, therefore, allowed and the impugned assessment order in so far as it relates to the imposition of tax on carrying postal mail bags is hereby quashed. However, there will be no order as to costs.