TMI Blog2003 (11) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Sub-section (8), where upon receipt of report about the seizure of the vehicle under Sub-section (3), the Taxation Authority is satisfied that the owner has committed offence u/s 66 read with Section 192A of the MV Act of plying vehicle without permit and he may by order in writing and for reasons to be recorded confiscate the vehicle seized under the said provision. Under Section 16(3) of the Act, a vehicle seized for non-payment of tax or other dues is liable to be returned on showing that tax has been paid. Thus if tax with regard to the seized vehicle is paid that vehicle has got to be released. So far as the link that is sought to be established with taxation procedures, snaps the moment tax is paid and vehicle is released. In such an event also motor vehicle can be confiscated on a report that such vehicle had been seized. The cause or basis for confiscation of motor vehicle is driving such vehicle contrary to Section 66 of the MV Act read with Section 192A of the MV Act and a report of seizure u/s 16(3) of the Act. The mere fact that such vehicle is seized for that purpose by itself will not result in confiscation of the vehicle. For confiscation of the vehicle t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are additional penalties arising u/s 16(6) of the Act. This discussion is enough to dispose of this case and we do not propose to deal with other contentions raised by the learned counsel of the appellants and are left open. These appeals are thus allowed quashing Section 16(6) and the consequential provisions of Sections 16(7), 16(8), 20-A and 20-B of the Act and the order of the High Court stands set aside. - S. Rajendra Babu and G.P. Mathur, JJ. For Appellant: K. Parasaran, Sr. Adv., K.K. Venugopal, Rani Chhabra, B.K. Rawat, Sudhir Rawat, M.C. Gupta, Sudha Pal and Krishnamurthi Swamy, Advs For Respondents: Vivek K. Thanka, Adv. General, B.S. Banthia, Prashant Kumar and Pragati Nikhara, Advs. JUDGMENT S. Rajendra Babu, 1. A batch of writ petitions was filed before the High Court of Madhya Pradesh challenging the constitutional validity of Sections 16(6), (7) (8), 20-A and 20-B of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991 [hereinafter referred to as 'the Act'], inserted by the Madhya Pradesh Motoryan Karadhan [Sanshodhan] Adhiniyam, 1999 [hereinafter referred to as 'the Amendment Act'], published in the official gazette on 8.12.1999 received the assen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut permit he is essentially avoiding the taxation which is the pith of the permit; that permit is intrinsically connected with the taxation; that applying the test of pith and substance, the Amendment Act is within the ken of Entry 57 List II, Seventh Schedule; that it is not rendered invalid even assuming it incidentally touches upon matters reserved for federal legislature; that the power of forfeiture being an incidental power to taxation there is no conflict in the provisions of Section 192A of the MV Act and Section 16(6) of the Act; that under Section 16(6) of the Act, confiscation will be by the taxation authority whereas a criminal prosecution of a person is initiated under the MV Act and Section 192A is an alternate to confiscation proceeding; that there are adequate safeguards with regard to the confiscation procedure; that the power of confiscation can co-exist with the power to prosecute the offender and the provisions in the Act do not conflict with each other and on that basis dismissed the writ petitions. Hence these appeals by special leave. 5. Sri K.K.Venugopal, learned senior advocate appearing on behalf of the appellants, contended that the Act is a law relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct by which the tax can be levied and collected with penal interest. If that is so, he submitted, the motor vehicles worth several lacs of rupees cannot be confiscated for non-payment of tax, may be running in a few thousands of rupees. He contended that such an action is wholly disproportionate exercise of power and calls for interference. 6. Sri K. Parasaran, learned senior advocate appearing for the owners of the motor vehicles, who had entered into a hire purchase agreement, submitted that in the first place confiscation is really directed against the ownership of the motor vehicles and the owner had, in no way, committed any breach of the Act or the Rules as the primary liability to pay the taxes is that of the hire purchaser and thus the provisions cannot be applied to such owners. He further submitted that even if confiscation is to be ordered for non-payment of tax by hire purchaser, what can be confiscated is only the extent of the interest of the hire purchaser and not beyond that. He further contended that the ownership of the appellants does not get affected by the reason of confiscation. 7. The learned advocate general for the State of Madhya Pradesh, contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle to the magistrate having jurisdiction to try the offence on account of which the seizure has been made; (b) issues a notice in writing to the person from whom the vehicle is seized and to the registered owner; (c) affords an opportunity to the persons referred to in Clause (b) of making a representation within such reasonable time as may be specified in the notice against the proposed confiscation; and (d) gives to the officer effecting the seizure and the persons to whom notice has been issued under Clause (b), a hearing on due date to be fixed for such purpose. (8) No order of confiscation under Sub-section (6) of any vehicle shall be made if any person referred to in Clause (b) of Sub-section (7) proves to the satisfaction of the Taxation Authority that such vehicle was used under valid documents required under the Act. 20-A Appeal against order of confiscation- (1) Any person aggrieved by an order of confiscation may, within thirty days of the order or if fact of such order has not been communicated to him, within thirty days of the date of knowledge of such order, prefer an appeal in writing accompanied by such fee and payable in such form as may be prescribed, and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92A of the MV Act provides that if a motor vehicle is driven in contravention of Section 66(1), that is, if a vehicle is driven or caused to be driven as a transport vehicle without permit, or in contravention of any or in contravention of any condition thereof relating to the route on which or the area in which or the purpose for which the vehicle may be used, the user is punishable with fine for the first offence and imprisonment for the subsequent offence but this section does not provide for confiscation of the vehicle. Section 16(6) of the Act provides that subject to the provisions of Sub-section (8), where upon receipt of report about the seizure of the vehicle under Sub-section (3), the Taxation Authority is satisfied that the owner has committed offence under Section 66 read with Section 192A of the MV Act of plying vehicle without permit and he may by order in writing and for reasons to be recorded confiscate the vehicle seized under the said provision. Under Section 16(3) of the Act, a vehicle seized for non-payment of tax or other dues is liable to be returned on showing that tax has been paid. Thus if tax with regard to the seized vehicle is paid that vehicle has got t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Parliament. In effect, the scheme is that Article 254(2) gives power to the State Legislature to enact a law with the assent of the President, on any subject covered under List III of the Seventh Schedule to the Constitution, even though the Central Act may be inconsistent operating in that State relating to that subject. 12. The short question, therefore, for consideration arises is whether there is any conflict or repugnancy between the State Law and the Union Law. In T. Barai v. Henry Ah Hoe's case (supra) this Court has held : ...A State Law would be repugnant to the Union Law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together, for example, where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed... 13. In the case on hand the prescription of punishment is for the same offence arising under Section 66 read with Section 192A of the MV Act and further punishment is prescribed under the State MV Taxation Act for forfeiture of the vehicle. Thus, there is clear conflict between the two en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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