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Judgment
Dev Darshan Sud, J.—The Petitioner challenges the action of the Respondents in not granting him a ''No Dues Certificate'' for plying a new bus replacing the accidented vehicle purchased by the Petitioner, on the ground that the Petitioner has not cleared all his outstanding taxes etc. This information was conveyed to the Petitioner by the Regional Transport Officer-cum-Assessing and Taxation Authority, Kullu vide Annexure P-15.
The brief facts necessary for determination of the controversy may be noticed. The Petitioner was owner of bus having a seating capacity of 42 passengers bearing Registration No. HP-66-8051 which was duly registered with the Respondents. The Petitioner had a valid route permit and had complied with all the other conditions as required under the Motor Vehicles Act. The bus met with an accident on 11.8.2004 and the Petitioner lodged a First Information Report with the Police and claim with the Insurance Company. He deposited the documents including route permit with the Regional Transport Officer, Kullu which fact was acknowledged by Respondent No. 3 vide Annexure P-4, which records:
CERTIFICATE
Certified that bus No. HP66-8051 met with a fatal accident near Jari on dated 11.8.2004 and the R.C. & R.P. are deposited with R.T.O. Kullu on 24.8.2004.
Position of taxes at that event are as under:
Special Road Tax: upto 31.8.2004 Token: upto 30.9.2004.
It is undisputed before me that the bus was a totally write-off and nothing could be salvaged. By a communication Annexure P-5, dated 23.8.2005 Respondent No. 3 informed the Petitioner that he has deposited route permits on 24.8.2004. Permit No. 108-Reg/2002 was valid for the Bhunter-Barsaini via Manikaran route up to 29.10.2007. In these circumstances his case for cancellation of permit would be initiated by the Transport Authority as the Petitioner had failed to purchase a substitute vehicle. The Petitioner responded vide Annexure P-6, dated 10.10.2005, giving the complete details of the accident, informing Respondent No. 3 that the vehicle started plying on 3.7.2003 after its purchase, which was financed by the ICICI Bank, Chandigarh, it was duly insured and the claim of the Petitioner had not been settled, with the result that he was forced to approach the District Consumer Redressal Forum, Mandi. He was not possessed of sufficient funds to replace the bus till and so long the insurance claim was not settled. In these circumstances, he requested that no action be taken against him.
The claim of the Petitioner was allowed by the District Consumer Redressal Forum, Mandi by its judgment dated 16.12.2005 (Annexure P-7) granting a sum of Rs. 4,84,000/- alongwith interest and costs. The Insurance Company did not satisfy the award immediately and it was only on 27.3.2006 that a sum of Rs. 5,24,133/- was paid to the Petitioner which is evident by a communication issued by the United India Insurance Company Limited to the Petitioner (Annexure P-8). Immediately, on 7.4.2006 vide Annexure P-9 the Petitioner approached Respondent No. 3 informing him that his claim has been settled by the District Consumer Redressal Forum and that he had been paid the amount by the Insurance Company only on 27.3.2006. He requested for permission for purchase of a new bus. This was again followed by another request vide Annexure P-10. On 7.12.2006, vide Annexure P-11, Joint Commissioner Transport, Himachal Pradesh, granted permission to the Petitioner in the following terms:
No.C.T.-9-Deposite of permit/Kullu/06-32907 O/O the Commissioner Transport Himachal Pradesh Shimla-4.
To
The Regional Transport Officer, Kullu Distt. Kullu, H.P.
Dated: Shimla-171004, the 7/12/2006
Subject: Release of route permit "Bhunter-Barsaini via Manikaran, IRT in favour of Sh. Rajesh Sood s/o Sh. Pitamber Sood VPO Shamshi Distt., Kullu, H.P.
Sir,
On the subject cited above. The permission to release the permit of bus No. HP-66-8051 "Bhunter-Barsaini via Manikaran.... IRT is hereby granted in favour of Sh. Rajesh Sood s/o Sh. Petamber sood R/O VPO, Shamshi Distt. Kullu, H.P. subject to the following conditions:
The bus purchased shall be approved from Director Transport.
He will clear all SRT due as per the provisions of Section 14(2) of H.P. MV Taxation Act, 1972.
He will ply the bus on same route.
He will get the vehicle registered after completing all the codal formalities.
You are requested to complete all the codal formalities before grant the permission of release of permit and the matter be placed before the RTA in its next meeting for ex post facto approval.
By Annexure P-12, Respondent No. 3 granted permission for replacement imposing five conditions:
The permission to replace the bus(es) is hereby granted subject to the following conditions:
The replacement bus should be produced within two months of the sale of the old bus.
The seating capacity of the new vehicle should be same as that of the sold vehicle.
The proof of sale of the old b us should be produced in the office at the time of effecting transfer of the Bus.
All dues in respect of the sold vehicle should be clear.
The bus purchased shall be approved from Director Transport.
The Petitioner thereafter purchased the bus and submitted all the documents to the Respondents. It is thereafter that communication Annexure P-15 which has been challenged in this petition was issued to Petitioner calling upon him to clear his taxes including penalty at the rate of 25% per annum only then "No Dues Certificate" could be issued to the Petitioner. He immediately represented vide Annexure P-16 stating that these terms could not be attached as his was case of the total write-off and not mere cessation to operate while retaining the bus. This request was rejected by the Joint Commissioner Transport, Respondent No. 2, by a communication, Annexure P-17, dated 28.2.2007 stating therein that according to the provisions of Section 7A(6) of the Himachal Pradesh Motor Vehicles Taxation Act, 1972, (hereinafter referred to as the ''Act'') the Petitioner could not be granted permission without payment of the outstanding dues.
In reply, the Respondents submit that no permission for "No Dues Certificate" could be granted to the Petitioner as the law did not permit it and that the provision of Section 7 was preemptory. Another objection urged is that u/s 14(3) of the Act, the State Government is empowered to grant tax exemption to any class of vehicles in the public interest. The Petitioner has not availed of this remedy of representing to the Government and approached this Court directly under Article 226 of the Constitution of India which is impermissible in law. The alternate remedy must first be exhausted.
Adverting to the provisions of Section 7 of the Act and the Motor Vehicles Taxation Rules, 1999, (hereinafter referred to as the ''Rules'') learned Counsel for the Petitioner submits that the Act and Rules do not contemplate payment of tax for the period when the vehicle is not useable and is a total write off.
Sub-section 6 of Section 7A provides:
7A. Owner to furnish security:
1....
2....
3....
4....
5....
Where an owner makes default in the payment of tax or penalty under this Act, for a continuous period of two months or more and makes a request to allow him to deposit the tax and penalty due, in instalments, the taxation authority may after obtaining surety bond equal to the amount of tax or penalty due from him, allow such owner to deposit the outstanding tax and penalty thereon, in six monthly instalments, subject to the condition that such owner deposits twenty five percent of the amount of tax and penalty due, immediately as the first instalment.
At this juncture the provisions of Sub-section 3 of Section 14 may also be noticed:
Exemptions:
1....
2....
Where the State Government is of opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, and subject to such conditions as it may specify in the notification, exempt either totally or partially any class of motor vehicle {***} or any motor vehicle belonging to any person or class of persons **** {or any motor vehicle plying on any route or part thereof} from the payment of tax.
Adverting to the charging Section which is 3(1) and (2), it is provided that tax shall be charged by the State Government on all motor vehicles specified in Column (2) of Schedule I, used or kept for use in Himachal Pradesh, at the rate specified etc. Sub-section (2) provides for levy of tax on motor cycles/scooters or personal vehicles etc., used or kept for use within the State of Himachal Pradesh.
Sub-section (2) of Section 14, which is the exemption clause, provides that when the registered owner or the person having possession or control of a motor vehicle specified in Schedule 1 or Schedule III has intimated in writing to the taxation Authority that the motor vehicle would not be used in any public place, for a particular period, being not less than one month but not more than three months, and deposits the certificate of registration of such motor vehicle alongwith route permit with the taxation authority concerned and obtains an acknowledgement thereof, he shall be exempted from the payment of tax for that period.
Learned Additional Advocate General submits that exemption u/s 14(2) could only be for a period of three months. She submits that the Respondents were well within their powers to have charged tax or to demand tax for the period beyond that which has been specified in Sub-section 2 of Section 14.
Learned Counsel for the Petitioner contends that from the date of the accident till purchase of the vehicle he did not possess any motor vehicle and there was no question of payment of any tax as there could be no user etc. He was, therefore, not liable to pay any tax for this period.
As would be noticed from the provisions, Section 3, which is charging section, is clear and unequivocal. It makes tax chargeable on motor vehicles for their use or being kept for use in the State of Himachal Pradesh. Section 3 of the Act provides:
Levy of Tax:
(1) Subject to the other provisions of this Act, on and from the commencement of the Himachal Pradesh Motor Vehicles Taxation (Amendment) Act, 2004, there shall be levied, charged and paid to the State Government, a tax on all motor vehicles specified in coloumn (2) of Schedule I, used or kept for use in Himachal Pradesh, at the rate as may be specified by the State Government, by notification, but not exceeding the rates specified in column (3) of Schedule I.
(2) On and from the commencement of the Himachal Pradesh Motor Vehicles Taxation (Amendment) Act, 2004, there shall be levied, charged and paid to the State Government, a tax on motor cycles/scooters or personal vehicles, used or kept for use in Himachal Pradesh, for a period of fifteen years from the date of issue of certificate of registration under Sub-section (3) of Section 41 of the Motor Vehicles Act, 1988 (59 of 1988) at the rates as may be specified by the State Government, by notification, on the basis of the price of such motor cycle/scooter or personal vehicle, subject to the maximum of ten percent of the price thereof.
(3) Notwithstanding anything contained in Sub-sections (1), on and from the commencement of the Himachal Pradesh Motor Vehicles Taxation (Amendment) act, 2004, there shall be levied, charged and paid to the State Government, a tax on motor cabs or maxi cabs which are allowed to be converted as personal motor vehicles, and on second hand personal motor vehicles which are to be registered in the State of Himachal Pradesh for the first time, used or kept for use in Himachal Pradesh, at the rates as may be specified by the State Government, by notification, subject to the maximum of ten percent of the price of such motor vehicles to be determined by the taxation authority after deducting eight percent depreciation per annum from the original price of the motor vehicle provided that:
(a) in the case of motor vehicles having original price upto two lacs fifty thousand rupees, the floor price shall not be less than fifty thousand rupees, or
(b) in the case of motor vehicles having original price more than two lacs fifty thousand rupees but not exceeding five lacs fifty thousand rupees, the floor price shall not be less than one lac rupees, or
(c) in the case of motor vehicles having original price more than five lacs fifty thousand rupees but not exceeding ten lacs rupees, the floor price shall not be less than two lacs rupees, or
(d) in the case of motor vehicles having original price more than ten lacs rupees, the floor price shall not be less than four lac rupees, or
(e) in the case of two wheelers, the floor price shall not be less than five thousand rupees.
Notwithstanding anything contained in Sub-sections (2) and (3), on and from the commencement of the Himachal Pradesh Motor Vehicles Taxation (Amendment) Act, 2004, there shall be levied, charged and paid to the State Government, a tax on motor cycles/scooters or personal motor vehicles, used or kept for use in Himachal Pradesh, for every further period of five years from the date of their renewal of certificate of registration under Sub-section (10) of Section 41 of the Motor Vehicles Act, 1988, at the rates as may be specified by the State Government, by notification, but not exceeding fifty percent of the tax paid at the time of first registration of such motor cycles/scooters or personal motor vehicles.
In State of Mysore and Others Vs. T.V. Sundaram Iyengar and Sons (P) Ltd., the Supreme Court interpreting the charging section of Mysore Motor Vehicles Taxation Act i.e. Section 3(1) and (2) which are also in perimateria with the provisions of the Himachal Act, held:
The material part of Section 3 reads as follows:
Section 3. Levy of tax.- (1) A tax at the rates specified in Part A of the Schedule shall be levied on all motor vehicles suitable for use on roads, kept in the State of Mysore:
Provided that in the case of motor vehicles kept by a dealer in or manufacturer of such vehicles for the purpose of trade, the tax shall only be levied and paid by such dealer or manufacturer on vehicles permitted to be used on roads in the manner prescribed by rules made under the Motor Vehicles Act, 1939.
Explanation.- A motor vehicle of which the certificate of registration is current shall, for the purpose of this Act, be deemed to be a vehicle suitable for use on roads.
(2) Notwithstanding anything contained in Sub-section (1), taxes at the rates specified in Part B of the Schedule shall be levied on motor vehicles belonging to or in the possession or control of persons, not ordinarily residing in the State of Mysore and kept in the State of Mysore by such persons for periods shorter than a quarter, but not exceeding thirty days.
(3)....
The Appellant-State maintains that Sub-section (2) of the section was applicable to such vehicles because while passing through the territory of the State, they use the roads of the State over a distance of 400 miles during their journey interspersed by halts in the State, and therefore, it can be said that such vehicles are ''kept'' for use on roads in the State within the meaning of Section 3(2). According to the learned Counsel for the Appellant the test of whether a vehicle is exigible to tax u/s 3(2) is, whether it is suitable for use on roads and, in fact, substantially uses the roads in the State of Mysore. In the present case, the argument proceeds, this test was satisfied because for an appreciable period such vehicles remain in the territory of the State and use its roads, and as such, are taxable under Sub-section (2) of Section 3.
The contention does not stand a close examination. Sub-section (2) is to be read with Sub-section (1). Thus read, it is plain that in order to be taxable under the section a motor vehicle must be capable of use on road, and further it must be kept in the State of Mysore, though in the case of vehicle belonging to persons not resident in the State, the duration of such ''keeping'' may be for a period shorter than a quarter but not exceeding thirty days. In the present case, there is no dispute that the vehicles concerned are capable of use on roads, and, in fact, they journey by road through the State. The problem thus resolves itself into the issue: whether the motor vehicles of the Respondent which merely pass through the State of Mysore within the meaning of Section 3(2)? In our answered this question in the negative.
The word ''kept'' has not been defined in the Taxation Act. We have, therefore, to interpret it in its ordinary popular sense, consistently with the context. The word ''kept'' has been repeatedly used in the section. In Sub-section (1), it occurs in association with the phrase "for use on roads". In that context, the ordinary dictionary meaning of the word ''keep in'' is ''to retain'', ''to maintain'' or cause ''to stay'', or remain in a place, ''to detain'', ''to stay or continue in a specified condition, position etc.'' In association with the use of the vehicle, therefore, the word ''kept'' has an element of stationariness. It is something different from a mere state of transit or a course of journey through the State. It is something more than a mere stoppage or halt for rest, food or refreshment etc., in the course of transit through the territory of the State.
(PP.149 - emphasis added)
The Court did not accept the contention of the State of Mysore that vehicle capable of use on road owned by a non-resident who remained in the State of Mysore could be charged tax. Similarly, in Travancore Tea Estates Co. Ltd. and Others Vs. State of Kerala and Others, again the Court interpreting the provisions of the Kerala Motor Vehicles Taxation Act, held:
...Though the purpose of the Act is to tax vehicles that are used or kept for use on the public roads of the State, the State is entitled for the purpose of safeguarding the revenues of the State and to prevent evasion of the tax to enact provision like provision as in Section 3 raising a presumption that the vehicle is used or kept for use in the State without any further proof unless exemption is claimed u/s 3(2), Section 5 and Section 6. It may be observed that reading Sections 3, 5 and 6 it is clear that a levy of tax is contemplated only on the vehicles that are used or kept for the use on the public roads of the State.
While we agree with the contentions of the learned Counsel for the Appellant that the tax is only exigible on vehicles used or kept for use on public roads, we must observe that in order to claim exemption from payment of tax requirements of Section 3(2) or Sections 5 and 6 should be satisfied....
(PP.1550)
One other judgment i.e. Maharaja Tourist Service, Vs. State of Gujarat, may be considered. In this case the Court while dealing with the provisions of the Punjab Motor Vehicles Taxation Act, particularly the words ''kept for use'' in the exemption provisions of the relevant part of the statute, held:
The second contention which has been raised is applicable to the States of Punjab and Haryana and that depends upon the scope of Rule 8(v) of the Punjab Motor Vehicles Taxation Rules, 1925. We note that the provision prescribes that a motor vehicle temporarily brought into Punjab and kept, for use therein for a period not exceeding 30 days is entitled to total exemption and that is not in dispute before us. Nor is it in dispute that the rule applies to Haryana. The words ''kept'' for use came up for consideration in the case of International Tourist Corporation AIR 1981 SC 374 (supra) where this Court held that once a vehicle is used within the State the taxable event occurred and it must be taken for use. In State of Mysore and Others Vs. T.V. Sundaram Iyengar and Sons (P) Ltd., the meaning of ''kept'' was examined at length and this Court held that a vehicle in transit through the State of Mysore, or even making a necessary halt for a short interval, during transit, cannot be said to be a vehicle ''kept'' for use on roads in the State of Mysore. The word ''kept'' has not been defined in the Act. It must, therefore, be interpreted in its ordinary popular sense consistent with the context. The ordinary dictionary meaning of the word ''keep'' is ''to retain'', ''to maintain'' or ''cause to stay or remain in a place'' or ''to detain'' or ''to stay or continue in a specified condition, position etc.'' It is something different from a mere transit or a course of journey through the State. It is something more than a mere stoppage or halt for rest, food or refreshment, etc. in the course of transit through the territory of the State. That being the position Rule 8(v) which uses the term ''kept for use'' may not cover a case of bare transit and in terms of the Rule exemption is available for vehicles kept up to 30 days in a year. In that view of the matter tourist vehicles registered outside the States of Punjab and Haryana when brought into these two States for regular use and not by way of transit and when used for more than 30 days in a year would attract taxability otherwise the exemption provision in Rule 8(v) would be available. We have settled the legal position and we leave it to the individual taxing authorities as also the operators of tourist vehicles to work out their respective rights.
(PP.1653 & 1654)
When considered in its totality, the facts of this case are clear. Information was communicated to the Regional Transport Authority that the vehicle was a total write-off. This was conveyed to them within the period prescribed under Rule 106 regarding which there is no dispute. It is also not disputed that the new vehicle was purchased by the Petitioner pursuant to permission granted on 7.12.2006 (Annexure P-11) and such purchase infact was made by the Petitioner on 29.1.2007 (Annexure P-13) pursuant to permission granted on 14.12.2006 (Annexure P-12) which reads:
No. RTA(K)-1977
Office of the Secretary, Regional Tpt. Authority, Kullu, H.P.
To
Sh/Smt./M/s Sh. Rajesh Sood S/o Sh. Pitamber Sood, V.P.O. Shamshi The. Distt. Kullu.
Dated, Kullu, the 14/12/06
Subject: PERMISSION FOR THE REPLACEMENT OF BUS NO(s) H.P.66-8051
Kindly refer to your application dated ___ vide which you have requested for the grant of permission to replace your above mentioned bus(es).
The permission to replace the bus(es) is hereby granted subject to the following conditions:
The replacement bus should be produced within two months of the sale of the old bus.
The seating capacity of the new vehicle should be same as that of the sold vehicle.
The proof of sale of the old bus should be produced in the office at the time of effecting transfer of the Bus.
All dues in respect of the sold vehicle should be clear.
The bus purchased shall be approved from Director Transport.
Sd/- Secretary, Regional Transport Authority Kullu, H.P.
It is also not disputed and established on the record that the claim of the Petitioner was allowed by the District Consumer Redressal Forum, Mandi, on 16.12.2005 and actual payment was made by the Insurance Company on 27.3.2006. In other words after the date of accident, there was no Motor Vehicle in question.
In these circumstances there was no question of the vehicle being allowed for use on any public road. The Act does not vest power in the State to tax that which does not exist. In these circumstances, no tax could have been demanded from the Petitioner under the Act. Tax as apparent and evident, is only levied on the use of the vehicle or on that vehicle which has been kept for use.
In these circumstances, I hold that Annexures P-15 and P-17 are illegal and ultravires the Himachal Pradesh Motor Vehicles Act and Rules framed thereunder which is accordingly quashed and set aside. The Petitioner is not liable for the demand as asked. This writ petition is disposed of. The case of the Petitioner shall be considered without insisting on the demand raised in Annexure P-15. There shall be no order as to costs.