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TMI Blog2010 (3) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... e plants and factory premises of the petitioner are situated. Respondent No. 2 is the Tahsildar of Pune, city Pune, appointed under the provisions of Maharashtra Land Revenue Code 1966. Respondent No. 3 is the Police Inspector of the Pimpri Police Station at Pimpri, Pune. Respondent No. 4 is the Appellate Authority, under Rule 28 of the Bombay Motor Vehicles Tax Rules 1959 (hereinafter referred to as the 'Tax Rules') against all the orders passed by any Taxation Authority i.e. respondent No. 1. Respondent No. 5 is the Deputy Transport Officer, Pune and respondent No. 6 is the Assistant Regional Transport Officer, Pune. 3. The brief facts, which have given rise to filing of the petition, are as under- (a) The petitioner is engaged in the business of manufacturing and sale of commercial vehicles and passenger cars at its manufacturing plants at Pimpri, Chinchwad and Chikhli, Pune. (b) The petitioner also owns a number of motor vehicles of various kinds such as buses, trucks, jeeps, cars, forklifts etc. in connection with its business. On the date of filing the appeal before respondent No. 4, the petitioner had 1417 (one thousand four hundred seventeen) motor vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice of the Regional Transport Office, Pune has from time to time, carried out inspections, granted non-use certificates and has duly exempted the petitioner from payment of tax in respect of the said Motor Vehicles. (f) The petitioner states that said motor vehicles were always rightly granted exemption from payment of tax under the provisions of the Tax Act and Rules framed there under. There has been no change of circumstances calling for cancellation or variation or review of the issuance of the 'nonuser' certificates. The petitioners are entitled to hold the 'nonuse' certificate in respect of the said motor vehicle. Since the said vehicles continue to satisfy all conditions entitling it continuously to such 'non-use' certificates till date. (g) Respondent No. 1 vide letter dated March 19, 2005 directed the petitioner to furnish complete information about the motor vehicles belonging to the petitioner, and being used in the said Factory Premises. (h) The petitioner vide letter dated March 24, 2005 replied to the said letter of respondent No. 1 and provided the list of the motor vehicles owned by the petitioners as well as list of the motor vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven opportunity of hearing by respondent No. 1 to submit its say before levying the tax on the motor vehicles. In fact not even show-cause notice was issued to the petitioner nor even an explanation of the petitioner was called for before issuing the demand notices and therefore, even the principles of natural justice were not followed before issuing the demand notice. (m) The petitioner was shocked by the illegal demand notices issued by respondent No. 1, the manner in which the same was made and threats contained in 173 demand notices dated 25th March 2005. Immediately thereafter petitioner filed 150 appeals against each of the impugned demand notice before respondent No. 4, as per the provisions of Section 14 of the Tax Act on the grounds that the impugned demand notices were ex-facie illegal, mala-fide, arbitrary and issued for the sole purpose of some how generating revenue before the end of the Financial year on 31-3-2005 by adopting coercive and highhanded tactics and the impugned notices were issued in gross violation of the principles of natural justice. The petitioner made ad-hoc payment of ₹ 24,00,000/- without prejudice to his rights and contentions raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat (i) 156 appeals dated 28th March 2005, (ii) Review Application dated 17th November 2006, and (iii) Appeal dated 10th January 2007 were all heard by respondent No. 4 on 22nd March 2007. Thereafter on 8th November 2008 the petitioner directly received through post an order dated 18th November 2008 passed by respondent No. 4 (hereinafter referred to as the 'impugned orders'). By the impugned orders, respondent No. 4 has dismissed the said 156 appeals filed by the petitioner and has upheld the impugned demand notices issued by respondent No. 1. 4. It is case of the petitioner that one of the issues which fell for the consideration of respondent No. 4 was whether the said motor vehicles were used or kept for use within the State as envisaged under the provisions of the Tax Act and Tax Rules. Respondent No. 4 by the impugned order dated 14th October 2008 has held that factory premises of the petitioner are public place and therefore under Rule 5(1) of the Tax Rules, the petitioner was not entitled to exemption from payment of taxes under the Tax Act. Respondent No. 4 has held that factory premises of the petitioner are public place as defined under Motor Vehicles Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner contended that similar issue was involved in the case of - Travancore Tea Company Ltd. v. State of Kerala AIR 1980 SC 1546 as to whether the vehicles of the petitioner therein, which were plying exclusively within the premises of the petitioner were liable to be taxed? It is contended that the Supreme Court once again has held that the tax is levied on the vehicles only if they use public roads and not otherwise. The learned Senior Counsel for the petitioner further contended that similar legal position is emerging from the another decision of the Supreme Court in the case of - State of Gujarat v. Kaushikbhai K. Patel AIR 2000 SC 2175. The learned Senior Counsel for the Petitioner therefore, contended that the Supreme Court has consistently held that the tax on vehicles can be levied under the provisions of the Tax Act if and only if the vehicles use public road and not otherwise, since the tax imposed on vehicles is regulatory and compensatory in nature for the purpose of raising revenue to meet the expenditure for making the roads, maintaining them and for regulation of traffic. 8. It is further contended that in the context of Entry 57 of the list II of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices dated 28th December 2006 (Exhibit G and G-1 to the petition) and the petition deserves to be allowed. 11. The learned AGP on the other hand supported the action of the respondent and contended that the petitioners are liable to pay vehicle tax on for the following reasons - Section 3 of the Bombay Motor Vehicles Tax Act, 1958 is the charging section. Under this provision tax can be levied and collected on all motor vehicles used or kept for use in the State at the rate prescribed. The motor vehicles in question are used or kept for use in the State as the premises wherein the petitioner claims to have been using the vehicles is the part of the State territory. 12. The learned AGP further contended that though initially exemption certificate was issued in respect of the vehicles belonging to the petitioner, tax is sought to be recovered because of provisions of Rule 5 of the Bombay Motor Vehicles Tax Rules which deals with certificate for non-user and the circumstances under which it can be granted. 13. The learned AGP further contended that if a registered owner of or any person who has possession or control of a motor vehicle intends to use it exclusively wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus liable to pay a compensatory tax for the availability of roads for them to run upon commission. 16. The learned AGP in the light of above referred decisions has submitted that action of respondent in withdrawing the exemption under Section 3(2) of the Bombay Motor Vehicles Act 1958 was justified and the petitioners are liable to pay the vehicle tax. 17. We have given anxious thought to various contentions canvassed by the learned Counsel for the respective parties. In the instant case, it is not in dispute that the petitioner owns number of vehicles of various kinds which are registered with the Registration Authorities under the Motor Vehicles Act. The petitioner had been using some motor vehicles exclusively within its factory premises at Pimpari, Chinchawad and Chikhali, Pune for the purpose of internal transportation of materials and equipment within its own factory premises and for other purposes, necessary and incidental to the manufacturing process. These motor vehicles are used exclusively on roads maintained by the Petitioner within the factory premises. The said motor vehicles are never used or kept for use on any of the roads maintained by the State of Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntimation. Rule No. 5 of the Tax Rules: 5. Certificate for non-user (1) A registered owner of or any person who has possession or control of, a motor vehicle, not intending to use or keep for use such vehicles in the State or intending to use it exclusively in a place which is not a public place and desiring to be exempted from payment of tax on that account and not on account of any of the reasons falling under the first proviso to Sub-section (2) of Section 3 shall before the commencement of the period of non-use and before the expiry of the current period for which the tax on such vehicle has been paid, make a declaration in writing to the appropriate Taxation Authority containing the following particulars, namely: (i) name and address of the registered owner or, as the case may be, of the person in possession or control of the motor vehicles; (ii) registration mark of the motor vehicle; (iii) the date from which and the date upto which the motor vehicle will not be used; (iv) full address of the place where the motor vehicle will be kept during the period of non-use; (v) reasons for non-use; (vi) a declaration to the effect that the motor vehicle will no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the entire complexion and therefore, it will be appropriate to consider the said decision in the light of the relevant provisions of the Motor Vehicles Act 1939 and the Tax Rules made there under and the other decisions of the Apex Court as well as the High Courts, cited on behalf of the petitioner and the respondents. 19. Before we consider the law laid down in the Pandurang's case, it is necessary to take into consideration the relevant facts involved in the said case. In the said case, an engineer had met with an accident in the factory premises of the appellant No. 2, involving a truck belonging to appellant No. 2 therein. The said engineer succumbed to the injuries sustained by him during the accident. When an insurance claim was raised by respondent Nos. 2 and 3 against respondent No. 1, the said claim was resisted by respondent No. 1 on the ground that the place where the accident took place was not a 'public place' since it was within the compound of appellant No. 2 therein. The question which was referred by Division Bench to the Full Bench for consideration in Pandurang's case (supra) was- whether a private road or private place to which the publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a right of access and includes any place or stand at which passengers are picked up or set down by a stage carriage. The first thing to remember with regard to the definition is that it is an inclusive one. Secondly, it in terms makes it clear that any road, street, way or other place, whether a thoroughfare or not, is a public place for the purposes of the Act, the only condition being that the public should have a right of access to it. Thirdly, the expression used in the definition is a right of access and not access as of right . Lastly, when it states that any place or stand at which passengers are picked up or set down by a stage carriage, is a public place. It shows that it is not so much concerned with the ownership of the place as with its user. Stage carriage is defined in Sub-clause (29) of Section 2 and it means a motor vehicle which is used to carry or adapted to carry more than six persons excluding the driver and 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. In short, it means a public passenger carrier. In other words by virtue of the last part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public place' defined in Section 2(24) of the Motor Vehicles Act, 1939 was construed in the light of the object of the Act of 1939 and in the context of scheme of the Chapter VIII of the said Act which deals with compulsory insurance of the vehicle to cover risks to third parties, with claims to be filed for recovering compensation, no fault liabilities and liabilities arising out of hit and run accidents etc. It is therefore, evident that the word 'public place' defined in Section 2(24) of the Act of 1939 was construed by the Full Bench while deciding the scope of Chapter VIII of the Act of 1939 which is a piece of welfare legislation, providing benefit of insurance cover to the engineer who met with an accident involving motor vehicles. Similarly the observations made by the Full Bench in paragraph 8 of the decision would show that word 'public place' defined in Section 2(24) of the Act of 1939 has considered the object, provisions and the legislative intent of the said Act of 1939, more particularly keeping in view the purpose of Chapter VIII of the said Act of 1939. The legal position which emerges from the observations made by the Full Bench, particularly i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this sub-rule shall affect the rights of the Taxing Authority to recover tax due for the period of the non-use, so certified, if at any time it is found that the vehicle was actually used or kept for use in the State during such period. 24. It is no doubt true that the words used or kept for use in the State finding place in Section 3(2) of the Tax Act would mean vehicle is used or kept for use on the public roads of the State and the owner would be liable to pay tax on such motor vehicle. However, while considering the scheme of whole Section 3(2) of the Tax Act read with Rule 5(1) and 5(2) of the Tax Rules, what we find is that these are enabling provisions which enable the owner of the motor vehicle to obtain a certificate of non-user from the Competent Authority under the Tax Act to claim exemption from payment of vehicle tax, if the owner is not intending to use or keep for use such vehicles in the State or intending to use it exclusively in a place which is not a public place. The word public place used under Section 5(1) of the Tax Rule will have to be construed in the light of the scheme of the provisions of Section 3(2) of the Tax Act read with Rule 5(1) of the Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed. This very concept is embodied in the provisions of Section 7 of the Taxation Act as also the relevant sections in the Taxation Acts of other States, namely, that where a motor vehicle is not using the roads and it is declared that it will not use the roads for any quarter or quarters of a year or for any particular year or years, no tax is leviable thereon and if any tax has been paid for any quarter during which it is not proposed to use the motor vehicle on the road, the tax for that quarter is refundable... 26. The above referred observations made by the Apex Court clearly demonstrates that considering the Entry 57 of List II of Seventh Schedule of the Constitution of India, the power of taxation cannot exceed the compensatory nature which must have same nexus with the vehicles using the road i.e. public road. It is not the purpose of the Tax Act to levy the tax on the vehicles which do not use the road or in any way form part of the flaw of traffic on the roads which is required to be regulated. The word 'public place' appearing in Rule 5(1) of the Tax Rules wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same time the interest of the bona fide owner is safeguarded by enabling him to claim and obtain a certificate of non-user from the prescribed authority. In order to enable the owner of the vehicle or the person who is in possession or being in control of the motor vehicle of which the certificate of registration is current to claim exemption from tax he should get a certificate in the prescribed manner from the Regional Transport Officer. 7. Section 5 of the Act provides for exemption from payment of tax under certain circumstances. It enables the registered owner or the person having possession or control of such vehicle to give previous intimation in writing to the RTO that the vehicle would not be used for such period and at the same time surrender certificate of registration and permit of the vehicle. Section 6 enables the registered owner or a person in possession or control of such a vehicle to get refund of tax if conditions specified in Section 6 are satisfied. Thus, in order to enable the registered owner or person in possession or control of a vehicle to get exemption of tax advance intimation to the RTO along with the surrender of certificate of registration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed decisions and the law declared by the Apex Court on the subject, the clear legal position which is emerging is that tax imposed on vehicles under the Tax Act is compensatory in nature for the purpose of raising revenue to meet the expenditure for making and maintaining the roads and regulation of traffic. Even as per the law declared by the Full Bench in the case of Pandurang (supra), the word 'public place' defined under Section 2(24) of the Act of 1939 was construed in the light of the object, purpose and provisions of the Act of 1939 by the Full Bench and therefore, going by the same analogy the word 'public place' defined in Rule 5(1) of the Tax Rules will have to be construed in the light of the object, purpose and scheme of the Tax Act of 1958 and the Rules made there under, coupled with the law declared by the Apex Court on the subject. Consequently, the meaning of the word 'public place' declared by the Full Bench in the case of 'Pandurang' (supra) in the context of Motor Vehicles Act, 1939 will not be attracted to the word 'public place' defined under Rule 5(1) of the Tax Rule. 30. Another important aspect which cannot be ignor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisite taxes. In the said matter, exemption from payment of tax on vehicles was claimed on the ground that the same dumpers were not 'motor vehicles' and therefore, no tax could be levied on the dumpers which were 'motor vehicles'. The Apex Court in paragraph 9 of the judgment has held thus- On these facts it is difficult for us to hold that the vehicles are not adapted or suitable or capable of being used on public roads, even though for most of the time they might actually be used within the mining areas on the roads prepared by the mining owners. Following the two earlier judgments of this Court in Central Coal Fields Ltd. Union of India v. Chowgule Co. we hold that the dumpers in question are motor vehicles and are taxable within the ambit of the Taxation Act. The decision of the Apex Court in Chief General Manager, Jagannath Area (supra), cited by the respondent in our view is of no help to the respondent, since the issue involved in the present case is entirely different. In the present case the question raised by the respondent is that the factory premises of the petitioner are 'public place' under Section 2 of the Motor Vehicles Act 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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