1987 (7) TMI 577 - SC - Indian Laws

Summary

Issues Involved:

1. Scope and effect of Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957 (now the Karnataka Motor Vehicles Taxation Act, 1957).
2. Liability to pay tax when a vehicle is not in use or not fit for use.
3. Interpretation of the words "suitable for use on roads" in the context of motor vehicle taxation.
4. Interaction between Section 3(1) of the Taxation Act and Section 38 of the Motor Vehicles Act.

Summary:

1. Scope and Effect of Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957:
The Supreme Court examined the scope and effect of Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957, which mandates a tax on all motor vehicles suitable for use on roads, kept in the State of Mysore. The Court emphasized that the Explanation to Section 3(1) deems a motor vehicle with a current Certificate of Registration as suitable for use on roads, thus liable for tax irrespective of its actual roadworthiness or possession of a Certificate of Fitness.

2. Liability to Pay Tax When a Vehicle is Not in Use or Not Fit for Use:
The Court held that the liability to pay tax under Section 3(1) is absolute and not contingent on the vehicle being in a roadworthy condition or having a current Certificate of Fitness. The owner or person in possession must pay the tax in advance and can seek a refund under Section 7 if the vehicle was not used for the whole or part of the period for which tax was paid, provided they satisfy the prescribed authority with appropriate proof.

3. Interpretation of "Suitable for Use on Roads":
The Court clarified that the words "suitable for use on roads" describe the kind of vehicles subject to tax and not their condition. This interpretation aligns with Entry 57 of List II of Schedule VII of the Constitution, which allows states to levy taxes on vehicles designed for road use, excluding non-road vehicles like farm machinery and aeroplanes.

4. Interaction Between Section 3(1) of the Taxation Act and Section 38 of the Motor Vehicles Act:
The Court noted that Section 38 of the Motor Vehicles Act, which deals with the necessity of a Certificate of Fitness for transport vehicles, does not impact the liability under Section 3(1) of the Taxation Act. The deeming provision in Section 38 is limited to the purposes of Section 22 of the Motor Vehicles Act and does not extend to the Taxation Act. Therefore, the absence of a Certificate of Fitness does not negate the tax liability under Section 3(1).

Conclusion:
The Supreme Court concluded that the respondents were liable to pay the tax as mandated by Sections 3 and 4 of the Taxation Act, despite the vehicle's unfit condition and lack of use. However, the Court upheld the acquittal of the respondents, as the State did not wish to pursue the prosecution further, and one of the respondents had passed away. The appeal was allowed in terms of clarifying the legal position on the scope and effect of Section 3(1) and its Explanation.