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TMI Blog1985 (8) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... ld exercise full control over the vehicle and several passengers had separately contracted for the use of the vehicle and paid individual fares, the transport vehicle used in such manner falls within the definition of 'stage carriage' and not 'contract carriage', . (5) Tax is levied on the basis of the use of the transport vehicle and not on the nature of the permit held by the owner in respect of the vehicle and the power contained in section 3 read with section 4 of the Taxation Act is sufficient to enable the State Government to levy the tax from time to time when the nature of the use of the vehicle is changed and the class of the motor vehicle is thereby altered, and. (6) There is no prohibition in the Act for the levy and collection of tax as authorised under section 3 (1) of the Taxation Act in cases where action is taken for the breach of any of the conditions of the permit against the holder of the permit under section 60 of the Act. The two actions are quite different - one for the user of the vehicle and the other for the breach of the conditions of the permit. . - - - - - Dated:- 6-8-1985 - Bench: P C Reddy, Kodandaramayya, L Rao JUDGMENT P. Chennakesav Red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice to the registered owner of the contract carriage AAA 1999 to show cause within seven days from the date of receipt of the said notice as to why the maximum tax of Rs. 11,500/- applicable to a stage carriage should not be collected from him for the quarter ending with 30-9-1984. The registered owner submitted his explanation. He stated in his explanation that the Regional Transport Authority had issued a notice for taking action under section 60 of the Act for the said alleged offence and requested the Regional Transport Officer to await the decision of the Regional Transport Authority. The Regional Transport Officer on a consideration of the report of the checking officer found that the contract carriage had been misused as a stage carriage holding that all the passengers that boarded the contract carriage pad individual fare of Rs. 5/-, that there was no express or implied contract between the passengers and the contract carriage owner and that the list of passengers maintained did not tally with the passengers that were actually found travelling in the bus. The registered owner was therefore directed to pay the difference of Rs. 2750/- for the quarter ending 30-9-1984 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the definition of 'stage carriage' under section 2 (29) which is as follows : "stage carriage' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey." 5. Section 2 (33) defines 'transport vehicle' to mean a public service vehicle or a goods vehicle. 6. Sections 46 to 48 deal with the procedure for the grant of stage carriage permits and the conditions subject to which a stage carriage permit could be granted by a Regional Transport Authority. Sections 49 to 51 deal with the procedure for the grant of a contract carriage permit and the conditions subject to which a permit can be granted. Section 57 prescribes the procedure to be observed in applying for and granting stage carriage or contract carriage permits. Section 59 enumerates the general conditions that are applicable to the holder of any permit. Section 60 invests the transport authority which granted the permit with the power to cancel or suspend the permit for violation of any of the conditions enumerated therein. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended : The mere fact that individual fares were collected from the passengers does not make the vehicle a stage carriage. There must be a valid permit for the use of the vehicle as a stage carriage. The valid permit held by the petitioners in these cases was only for the use of the vehicle as a contract carriage and to ply between two fixed places and all the passengers who travelled in the vehicle were travelling only between those two places and no passenger was picked up on the way and the user of the vehicle was as a contract carriage and not as a stage carriage. It is essential for a contract carriage to be classified as a stage carriage, that the contract carriage should be able to pick up or set down along the line of the route passengers not included in the contract. If no passengers were picked up or set down along the line on the route, the vehicle cannot be classified as a stage carriage. This contention, in our view, ignores the essential part of the definition of 'contract carriage', namely, that the contract, express or implied, to use the vehicle must be as a whole for a fixed sum. The essential condition is that a single party or person should be exercising full c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vehicle must be as a whole at or for a fixed or agreed rate or sum under a contract express or implied without stopping to pick passenger not included in the contract. The learned Judge further observed that "The contract contemplated under section 2 (3) must be only one contract and the use of the vehicle must also be as a whole. It does not admit two or more contracts for the purpose of use of the vehicle as a contract carriage by different parties." 13. The Supreme Court in Roshan Lal v. State of U. P., pointed out the distinction between a contract carriage and a stage carriage as defined under section 2 (3) and 2 (29) thus "contract carriage is engaged for the whole of the journey between two points for carriage of a person or persons hiring it, but it has not the right to pick up other passengers en route. The stage carriage, on the other hand, runs between two points irrespective of any prior contract and it is boarded by passengers en route who pay the fare for the distance they propose to travel." 14. Thus, the essential difference between a contract carriage and a stage carriage is that in the former there is a prior contract between the passenger or passenger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the definition of contract carriage is not permissible on the plain language employed in the definition. 17. Then the question is whether the mere user of a contract carriage as a stage carriage attracts the liability to pay the tax payable on a stage carriage. Is it essential that only when the owner plies a transport vehicle under permit issued by the competent authority authorising the owner to use it as a stage carriage under section 48 of the Act that tax authorities can levy tax on the following that the vehicle was a stage carriage. 18. Let us therefore examine the structure of the Taxation Act. Section 2 (h) defines 'Tax' to mean tax leviable under the Act'. Section 3 (1) empowers the State Government to levy tax on every motor vehicle used or kept for use in a public place in the State by notification from time to time. Sub-section (2) to section 3 provides that the notification issued under sub-section (1) shall specify the class of motor vehicles on which the rates for the periods at which and the date from which the tax shall be levied. Thus, section 3 clearly stated that it is the nature of the use of the vehicle that attracts the levy of tax on a motor vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs to a particular class referred to in that notification tax is levied on that footing and an entry is made in the certificate of registration to that effect. But it does not follow that if the class of vehicle is changed during the quarter by reason of the use it was put to tax cannot be levied according to the class to which the vehicle then belongs. As soon as the class of the vehicle is changed, the rate of tax which applies to that class according to the notification is automatically attracted. There is no need for the Act to provide specifically that if there is a change in the class of vehicle, the authorities can levy tax afresh on that vehicle as belonging to that class. The power contained in Section 3 read with section is sufficient to enable the Government to levy the tax from time to time when the class of the vehicle is changed." 20. We entirely agree with the reasoning and conclusion of the learned Judges. 21. There remains lastly the contention that for violation of any of the conditions of the permit granted under section 51 or the conditions imposed under section 59, only action can be taken for cancellation or suspension of the permit under section 60 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any of the conditions of the permit against the holder of the permit under section 60 of the Act. The two actions are quite different - one for the user of the vehicle and the other for the breach of the conditions of the permit. 23. Now turning to the facts, it is the clear and categorical finding of the Transport Authorities that there was a single contract with the owner of the contract carriage for the use of the vehicle as a whole and individual fare was collected from each passenger. On such a finding, the only right conclusion, applying the aforesaid principles, that can be reasonably reached is that the contract carriage and thereby attracted the levy of tax as a stage carriage. 24. The learned counsel however submitted that an appeal is provided for under section 12 of the Taxation Act against an order of levy of penalty under section 6 of the Taxation Act, that no appeal is provided for against an order of levy of tax on the basis of change in the user or in the classification of the vehicle and that therefore this Court in the interests of justice could and should re-examine the evidence and arrest the oft arbitrary and high-handed action of the checking officers. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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