26 August 2004
Supreme Court
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COMMNR.,TRANSPORT-CUM-CHAIRMAN Vs TAPAN KUMAR BISWAS

Case number: C.A. No.-007033-007033 / 2003
Diary number: 16106 / 2002
Advocates: RADHA SHYAM JENA Vs SUBHASH SHARMA


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CASE NO.: Appeal (civil)  7033 of 2003

PETITIONER: Commissioner, Transport-cum-Chairman & Ors.            

RESPONDENT: Tapan Kumar Biswas                                                    

DATE OF JUDGMENT: 26/08/2004

BENCH: S. N. Variava & G. P. Mathur

JUDGMENT: J U D G M E N T

S. N. VARIAVA, J.

       This Appeal is against the Judgment of the High Court of Orissa  dated 8th January, 2002.   

       Briefly stated the facts are as follows.

       The Respondent is the owner of a Truck bearing No.WMK-7067.   In respect of this Truck, the registration and fitness certificate had  been issued and motor vehicle tax was being paid regularly.  The said  vehicle met with an accident on 23rd January 1991. The Respondent  gave off-road intimation as required for the period January 1991 to  December 1991.  He did not, however, submit any off-road intimation  for the period from January 1992 to December 1995.  As the accident  was severe, the fitness certificate was cancelled by the Appellant on  24th January 1991.   

       The Taxing Officer-cum-Regional Transport Officer of the  Appellant by his letter dated 10th January 1996 called upon the  Respondent to pay a sum of Rs.27,750/- being the tax for the period  from January 1992 to December 1995.  The Respondent preferred an  Appeal, against this demand, before the Chairman, Regional Transport  Authority.  By an Order dated 23rd August 1996, the appellate  authority dismissed the Appeal.  Revision filed by the Respondent,  before the Transport Commissioner, also stood dismissed.

       The Taxing Officer also raised further demands for subsequent  periods.  The Respondent thus filed a Writ Petition in the High Court.   The Writ Petition has been allowed by the impugned Judgment.  It has  been held that the tax on motor vehicle can only be levied on vehicles  which are suitable for use on roads, kept in the State of Orissa.  It is  held that under the Orissa Motor Vehicles Act unless a vehicle had both  a certificate of fitness as well as a valid certificate of registration, the  vehicle cannot be presumed to have been kept for use.  It is held that  the demand was thus unsustainable in law and the notices of demand  were quashed.

       We have heard the parties.

       The relevant provisions of the Orissa Motor Vehicles Taxation  Act, 1975 read as follows:-

"3. Levy of tax\027(1) Subject to the other  provisions of this Act, there shall be levied on  every motor vehicle used or kept for use within  the State a tax at the rate specified in

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Schedule-I;

       (2) The State Government may by  notification, from time to time, increase the  rate of tax specified in Schedule-I:

       Provided that such increase shall not  exceed fifty per cent of the rate specified in  Schedule-I.

       (3) All references made in this Act to  [Schedule-I] shall be construed as references  to Schedule-I as for the time being amended in  exercise of the powers conferred by this  section.

Explanation\027An owner who keeps a transport  vehicle for which the certificate of fitness and  the certificate of registration are valid, or an  owner who keeps any other motor vehicle, of  which the certificate of registration is valid,  shall, for the purpose of this Act, be presumed  to keep such vehicle for use :

       Provided that if the Taxing Officer finds a  motor vehicle having been used on any day  during the period for which the registration  certificate of a vehicle has been suspended or  cancelled under the relevant provisions of the  Motor Vehicles Act such vehicle shall be  deemed to have been kept for use for the  whole period without payment of tax.   

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10. Prior intimation of temporary  discontinuance of use of a vehicle\027(1)  Whenever any motor vehicle is intended not to  be used for any period, the registered owner or  person having possession or control thereof  shall on or before the date of expiry of the  term for which tax has been paid, deliver to  the Taxing Officer, an undertaking duly signed  and verified in the prescribed form and manner  specifying the period aforesaid and the place  where the motor vehicle is to be kept  alongwith such other particulars as may be  prescribed and the registration certificate,  fitness certificate, permit and tax token, then  current and shall from time to time by  delivering, further undertakings give prior  intimation to the concerned Taxing Officer of  the extension, if any, of the said period and  the changes, if any, of the place where the  motor vehicle shall be kept :

       Provided that no such undertaking shall  relate to a period exceeding one year at a  time.

       (2) If at any time during the period  covered by an undertaking as aforesaid the  motor vehicle is found being used or is kept at  a place in contravention of any such

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undertaking, such vehicle shall, for the  purposes of this Act, be deemed to have been  used throughout the said period without  payment of tax.

       (3) In the absence of any undertaking  delivered under Sub-section (1) every motor  vehicle liable to tax under this Act shall be  deemed to have been used or kept for use  within the State."

       Thus, under Section 3 tax has to be paid on every motor vehicle  used or kept for use within the State.  If a transport vehicle has a  certificate of fitness as well as a valid certificate of registration then  that vehicle will be presumed to have been kept for use.  However,  this does not mean that a vehicle which does not have a certificate of  fitness and/or a certificate of registration is not capable of being used  on the road.  Merely because, legally, a vehicle cannot be plied on the  road without a certificate of fitness and/or the registration certificate  would not mean that all such vehicles are not capable of being used on  the road.  Under the Act, the owner of the vehicle has to pay tax.  That  is why Section 10 provides that whenever any motor vehicle is  intended not to be used on the road for any period, the registered  owner or person having possession or control thereof has to give an  undertaking duly signed and verified in the prescribed form and  manner and the taxing authority must be given intimation about the  period the vehicle is intended not to be used and the place where the  motor vehicle is going to be kept.  The relevant documents including  the registration certificate, fitness certificate, permit and tax token,  etc. are to be delivered to the Taxing Officer.  The undertaking  contemplated by Section 10 can only be for a period of one year at a  time.  Thus, it is clear that such an intimation and undertaking has to  be given from year to year if the vehicle is intended not to be used on  the road for more than one year.  If no intimation, as required under  Section 10 along with the undertaking, has been given then, by virtue  of proviso (3) to Section 10, it will be deemed that the vehicle had  been used or kept for use within the State.   

       In this case, admittedly, during the initial period the required  intimation and undertaking had been filed.  But for the subsequent  periods the undertaking has not been filed and intimation not given.   The undertaking filed for the initial period would not operate beyond  the period of one year.  As no subsequent undertaking was filed, it has  to be presumed that the vehicle had been used or kept for use within  the State.  The High Court was not right in concluding that merely  because the certificate of fitness was cancelled, it could not be said  that the vehicle had not been kept for use in the State.

       Our view is supported by a decision of this Court in Mahakoshal  Tourist, Napier Town & Ors. Vs. State of M.P. & Ors. reported in  (2002) 7 SCC 245.  In this case, the vehicle had been registered in  Madhya Pradesh but was plying out of the State for a long period.  Tax  was demanded on that vehicle by the State of Madhya Pradesh.  A  submission that tax was not payable as the vehicle had not been used  in the State was negatived.  It was held that mere non-use of the  vehicle was not sufficient.  This Court held that in order to avoid tax  liability the fact of non-use of the vehicle had to be declared to the  concerned authority.   

       A similar view has also been taken in an unreported Judgment of  this Court dated 26th February 2004 in Civil Appeal No. 3599 of 1998.   In this case, the vehicle had not been used as a stage carriage permit  had not been granted.  The submission that without the stage carriage  permit, the vehicle could not be used and, therefore, there was no

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liability to pay tax was not accepted.  This Court held that under  Section 10 of the Orissa Motor Vehicles Taxation Act, in the absence of  any undertaking and intimation it had to be presumed that the vehicle  had been used or kept for use within the State.   

       In this view of the matter, the decision of the High Court cannot  be sustained.  It is set aside.  The Writ Petition filed by the Respondent  stands dismissed.

       The Appeal is accordingly allowed.  There will be no order as to  costs.