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Issues Involved:
1. Validity of 173 demand notices for outstanding motor vehicle tax and interest. 2. Definition and interpretation of "public place" under the Motor Vehicles Act, 1988. 3. Applicability of non-use certificates for motor vehicles used exclusively within factory premises. 4. Compliance with principles of natural justice in issuing demand notices. 5. Refund of amounts paid under protest by the petitioner. Issue-wise Detailed Analysis: 1. Validity of 173 demand notices for outstanding motor vehicle tax and interest: The petitioner challenged 173 demand notices amounting to Rs. 97,48,461/- for alleged outstanding tax and interest on motor vehicles used exclusively within their factory premises. The petitioner argued that these vehicles were granted non-use certificates and were never used on public roads, thus exempt from tax. The court noted that the petitioner had consistently declared non-use and obtained certificates from the Taxation Authority, which were valid and in force. The demand notices were issued without any prior show-cause notice or hearing, violating principles of natural justice. The court quashed the demand notices, deeming them illegal and unsustainable. 2. Definition and interpretation of "public place" under the Motor Vehicles Act, 1988: The core issue was whether the factory premises of the petitioner constituted a "public place" under the Motor Vehicles Act, 1988. Respondent No. 4 held that the factory premises were a public place, thus denying exemption from tax under Rule 5(1) of the Bombay Motor Vehicles Tax Rules, 1959. The court, however, distinguished the case from the Full Bench decision in Pandurang Chimaji Agale v. New India Life Insurance Company, which defined public place in the context of insurance claims and third-party risks. The court concluded that the term "public place" in Rule 5(1) should be interpreted in light of the Tax Act's purpose, which is to levy compensatory taxes for vehicles using public roads. Since the petitioner's vehicles did not use public roads, the factory premises could not be considered a public place for taxation purposes. 3. Applicability of non-use certificates for motor vehicles used exclusively within factory premises: The petitioner had been granted non-use certificates for vehicles used exclusively within their factory premises, exempting them from tax. The court emphasized that these certificates were issued after due inspection and verification by the Taxation Authority. The court referred to the Supreme Court's decisions in Bolani Ores Ltd. v. State of Orissa and Travancore Tea Company Ltd. v. State of Kerala, which held that vehicles not using public roads are not liable for tax. The court concluded that the petitioner's vehicles, used solely within private factory premises, were rightly exempted from tax under the provisions of the Tax Act and Rules. 4. Compliance with principles of natural justice in issuing demand notices: The petitioner argued that the demand notices were issued without any prior notice or opportunity to be heard, violating principles of natural justice. The court agreed, noting that no show-cause notice or explanation was sought from the petitioner before issuing the demand notices. The court held that the demand notices were issued arbitrarily and in gross violation of natural justice principles, making them unsustainable in law. 5. Refund of amounts paid under protest by the petitioner: The court directed the respondents to refund Rs. 24,00,000/- and Rs. 45,348/- paid by the petitioner under protest, along with interest. If the amounts were kept in fixed deposits, the interest accrued thereon should be refunded. If not, the amounts should be refunded with simple interest at the rate of 8% per annum from the date of payment till the date of refund. Conclusion: The court quashed the impugned demand notices and orders, holding that the petitioner's vehicles, used exclusively within private factory premises, were exempt from tax. The court directed the respondents to refund the amounts paid under protest by the petitioner, along with interest. The judgment emphasized the importance of adhering to principles of natural justice and the proper interpretation of statutory provisions in light of their legislative intent and purpose.
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