9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2004 (4) TMI 604 - SC - Indian LawsDiscrimination against designated omnibuses in tax imposition - Validity of Section 3A (1) and (2) of the Bombay Motor Vehicles Tax Act, 1958 - After the decision of the High Court, the Bombay Motor Vehicles Tax Act was amended by Gujarat Act in order to validate the imposition and collection of tax on designated omnibuses, which was published in the Gazette - non-use of the vehicles - HELD THAT - The language used in Section 3A - all omnibuses which are used or kept for use in the State exclusively as contract carriages - is in conformity with Entry 57 of List II. The consistent view taken by this Court is that if a vehicle is used or is kept for use in the State, it becomes liable for payment of tax and the actual use or quantum of use is not material. The fact that the statute provides for refund of the tax, if the authority is satisfied that the vehicle has not been used, does not mean that the legislature can only make a provision for levy of tax which is limited for the period of actual use or that no tax can be levied during the period the vehicle is not put to use in the State. The provision for the refund has been made only for the advantage of the operator so that he may be relieved of the burden of tax when he is not getting any income from the vehicle on account of its non-use but it has no relevance to the competence or authority of the State to enact a law providing for imposition of a tax on vehicles which are used or are kept for use in the State. In Mahakoshal Tourist v. State of M.P. 2002 (9) TMI 863 - SUPREME COURT the challenge made with regard to the absence of a machinery for assessment of tax for the vehicles plying in the State of Madhya Pradesh on the basis of All India Tourist permit and denying them refund of tax for the period they were not used or kept for use in the said State was considered. In view of the language used in Section 3 of the relevant Act which provided for levy of tax on every motor vehicle used or kept for use in the State at the rate specified in the schedule, it was held that the expression used or kept for use means, either the actual use of the vehicle on the roads of the State of Madhya Pradesh or keeping the vehicle (which is in condition and capable of being used) available for use in the State, if so desired. It was further held that while plying outside the State in connection with the contract, a vehicle will, nonetheless be within the import of kept for use in the State and it is immaterial for the purpose of Section 3 whether a vehicle is actually being used or is kept for use in the State. Nothing new has been pointed out to challenge Gujarat Act No.9 of 2002 by which the Bombay Motor Vehicles Taxation Act, as adopted in the State of Gujarat with up to date amendments, was further amended after the decision of the High Court which was rendered on 17th August, 2001. In fact, the main argument of the learned counsel for the writ petitioners is that the said amending Act merely rearranged the Sections and suffered from the same infirmity as the previous Act. Since we are of the opinion that the view taken by the High Court is not correct and Section 3A and Rule 5 of the Rules, as incorporated vide notification dated 6.2.2001 are intra vires and are perfectly valid, the challenge made to Gujarat Act No.9 of 2002 has no substance and must fail. Conclusion The Supreme Court allowed the appeals filed by the State of Gujarat, set aside the High Court's judgment, and upheld the validity of Section 3A and Rule 5. The Court dismissed the writ petitions challenging the amendments made by Gujarat Act No.9 of 2002.
Issues Involved:
1. Validity of Section 3A (1) and (2) of the Bombay Motor Vehicles Tax Act, 1958. 2. Validity of Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959. 3. Legislative competence under Entries 56 and 57 of List II of the Seventh Schedule of the Constitution. 4. Discrimination against designated omnibuses in tax imposition. 5. Refund mechanism for advance tax paid. Summary: 1. Validity of Section 3A (1) and (2) of the Bombay Motor Vehicles Tax Act, 1958: The Supreme Court examined the challenge to Section 3A, which mandates the levy and collection of tax on designated omnibuses used or kept for use in the State. The High Court had struck down these provisions, deeming them beyond legislative competence and discriminatory. However, the Supreme Court upheld the validity of Section 3A, stating that the tax is levied on vehicles "used or kept for use" in the State, aligning with Entry 57 of List II. The Court emphasized that the actual use or quantum of use is immaterial for tax liability. 2. Validity of Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959: Rule 5, which provides the procedure for claiming a refund of advance tax, was also struck down by the High Court. The Supreme Court, however, found Rule 5 to be intra vires and valid, stating that the provision for refund is an advantage for the operator and does not affect the legislative competence to impose the tax. 3. Legislative competence under Entries 56 and 57 of List II of the Seventh Schedule of the Constitution: The Supreme Court clarified that Entries 56 and 57 authorize the State to levy taxes on passengers and vehicles suitable for use on roads. The Court reiterated that the tax is compensatory and does not require actual use of the roads. The Court dismissed the argument that the tax should be based on the actual use or distance covered by the vehicle. 4. Discrimination against designated omnibuses in tax imposition: The writ petitioners argued that designated omnibuses were discriminated against compared to other vehicles. The Supreme Court rejected this contention, citing previous judgments that upheld higher taxes on contract carriages as reasonable and based on local conditions. The Court found no merit in the claim of discrimination. 5. Refund mechanism for advance tax paid: The Supreme Court addressed the issue of the refund mechanism, noting that the provision for refund in case of non-use of the vehicle is not illusory. The Court emphasized that the refund mechanism is a relief for operators and does not invalidate the tax imposition. Conclusion: The Supreme Court allowed the appeals filed by the State of Gujarat, set aside the High Court's judgment, and upheld the validity of Section 3A and Rule 5. The Court dismissed the writ petitions challenging the amendments made by Gujarat Act No.9 of 2002.
|
