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PETITIONER: STATE OFGUJ’ARAT & ORS.

       Vs.

RESPONDENT: KAUSHIKBHAI K.  PATEL & ANR.  ..

DATE OF JUDGMENT:       09/05/2000

BENCH: S.P.  Bharucha, Shivaraj V.Patil

JUDGMENT:

     SHIVARAJ V.  PATIL, J.

     In  this appeal the judgment and order dated 23.4.1998 made  by  the High Court of Gujarat at Ahmedabad in  Special Civil  Application  No.   10356 of 1996 are  impugned.   The Respondents  herein filed the said Special Civil Application in  the  High  Court  for setting  aside  the  notice  dated 29.3.1996 demanding payment of composite tax and penalty and for  declaration  that  Section 3-A(5) of the  Bombay  Motor Vehicles  Tax  Act,  1958  as amended by  the  Bombay  Motor Vehicles

     Tax  (Glljarat Amendment) Act.  1992.  is ultra  vires being violative of Articles 14 and 19 of the Constitution of India.

     2.   The  Respondent  No.  I is the owner  of  omnibus bearing  registration  No.  GRQ 8403.  The said vehicle  had not  been  used  or  kept for use  during  the  period  from 1.7.1995  to  31.3.1996.  He intimated the non-user  of  the said  omnibus  to the Motor Vehicle Inspector.   He  claimed refund of the tax for the said period.  His claim for refund was not allowed on the ground that the omnibus had been kept in non-use for a period exceeding three months and he failed to satisfy that such non-use was for the reasons, beyond his control.   Consequently, the appellant issued demand  notice dated  29.3.1996  demanding payment of composite tax of  Rs. 14,000/- and penalty of Rs.  3,500/- from the Respondent No. I.   Under  these circumstances, the Respondents  filed  the aforementioned Special Civil Application.

     3.   Section 3 of Bombay Motor Vehicles Tax Act,  1958 (for  short the "Act") authorises levy and collection of tax on motor vehicles used or kept for use in the State.  As per sub-section  2 of Section 3, a motor vehicle shall be deemed to have been used or kept for use in

     the  State  during  the  currency  of  certificale  of registration except during the period for which the taxation authority  has  certified that the vehicle was not  used  or kept  for use.  Section 3-A of the Act provides for levy  of tax on omnibuses which are used or kept for use in the State as contract carriages.  The Act was amended by Gujarat State by  the  Bombay Motor Vehicles Tax (Gujarat Amendment)  Act. 1992.   Sub-section  5 of Section 3-A was substituted.   The said  substituted sub-section 5 of Section 3-A to the extent

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it is relevant reads as follows:-

     "5(a)  Where the registered owner or any person having possession  or control of a designated omnibus who has  paid tax  under  this section proves to the satisfaction  of  the taxation authority that the designated omnibus in respect of which  a tax has been paid has not been used or kept for use for a continuous period of not less than one month, he shall be  entitled  to the refund of an amount equal to 1/12th  of the  annual rate of tax paid in respect of such omnibus  for each complete month of the period for which the tax has been paid  so however that, except as otherwise provided inclause (b)  the total amount of a refund in a year shall not exceed -

     (b)  Where  a  registered, owner or  a  person  having possession  or control of a designated omnibus who has  paid tax  under  this section proves to the satisfaction  of  the State  Government or such officer not below the rank of  the Director of Transport, Gujarat State, as may be notification in  the Official Gazette be authorised in this behalf by the State Government that the

     designated  omnibus  in respect of which the  tax  has been  paid has/or reason’s beyond the control of such  owner or person not been used or kept for the use for a continuous period of not less one month but exceeding three months in a year,  he shall be entitled to the refund of an amount equal 1/12th of the annual rate of the tax paid in respect of such omnibus  for each complete month of the period of which  the tax has been paid.

     (Emphasis supplied)

     4.  As per this amended Section, a registered owner or a  person  having  possession or control of  the  designated omnibus could claim refund of tax already paid upto a period of  three  months  for non-user of vehicle on proof  to  the satisfaction  of the taxation authority that the  designated omnibus  in  respect of which the tax has been paid has  not been  used or keptforuse for acontinuous period of not  less than one month.  In case the claim for refund exceeded three months,  the owner or person in possession or control of the omnibus  has  to  satisfy  the   State  Government  or   the authorised  officer that such non-use of vehicle was for the reasons  beyond  his  control.  Hence  the  controversy  was raised  as to whether satisfaction as to the reasons  beyond the  control of the owner or in possession or control of the omnibus  was  justified  and  tenable when  the  refund  was claimed on the basis of non-user of the vehicle for a period exceeding three

     months within one year.

     5.   The  High  Court referred to and  relied  on  the pronouncements of this Court and held that under the Act the tax  imposed is regulator and compensator in nature for  the purpose  of  raising  revenue to meet  the  expenditure  for making  the  roads, maintaining them and for  regulation  of traffic.   The Act does not provide for levy and  collection of  tax on vehicles which do not use, or are kept for use of the  public roads in the State.  The High Court also noticed that  other measures and provisions are already available to check  the  evasion of tax.  The High Court  concluded  that insistence  to  satify  the State Government  or  authorised

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officer  as  to  the  reasons  beyond  the  control  of  the registered owner or the person in possession for non- use of the  vehicle  was beyond tile legislative competence of  the Slats.   In  this  view, the words "for reasons  beyond  the control  of such owner or person" occurring in clause (by of sub-section 5 of Section 3-A of the Act were struck down.

     6.   The  learned  senior counsel for  the  appellants urged  that  the  condition imposed in sub-section  5(b)  of Section  3-A  of  the  Act was not to impose  tax  on  those vehicles which arc not running on the roads

     for  a  period beyond three months but it was only  to check  evasion o.r fax and to see that the refand is granted only  in  genuine  cases;  for the initial period  of  three months of non-use of vehicle in a financial year.  refund of tax  is available on proof of non-use of the vehicle without insisting  for  the  reasons  beyond   the  control  of  the registered owner or a person in possession of a vehicle.  He pointed  out to the inquiry report of the Inspector of Motor Vehicles  dated 2L10.1995 (Annexure P-4) and submitted  that the  vehicle  did  not require any repair and  as  such  the reason  given by the owner for non-user of the vehicle could not  be accepted.  He also contended that ordinarily  owners having  purchased  the  omnibus investing several  lakhs  of rupees  cannot keep vehicles off the road or put to  non-use for  a  period  more  than three  months;   hence  requiring satisfaction of the State Govt.  or authorised officer as to reasons  beyond  the  control for non-use of  a  vehicle  is sustainable   and  justified  particularly   when  such   an amendment was made with a view to prevent evasion of tax.

     7.   Per  contra, the learned senior counsel  for  the respondents  while  supporting the judgment and order  under challenge  drew our attention to the Form NT (Annexure P/3). He submitted as per the form place

     where the vehicle was kept for non-use was shown and a declaration  was also made that he would not remove the said vehicle  from  the place mentioned in the Form  without  the previous  permission of the taxation authority and that  the certificate  of taxation in respect of the said vehicle  was also  surrendered.   This  apart the  authorities  have  got powers  to  detect the use of the vehicle on the road  which otherwise  was shown as in non-use and to impose penalty  or to prosecute for the contravention as the case may be.

     8.   We  have  considered submissions of  the  learned counsel  for the parties.  The facts that are not in dispute are;   the Respondent No.  I filed Form NT declaring non-use of the vehicle in question for ths period 1.7.95 to 31.3.96; the   report  submitted  by   the  motor  vehicle  Inspector regarding  non-user of the vehicle for three months from I ^ July, 1995 to 30^ September, 1995 was accepted and refund of tax  was  ordered.  For the remaining period refund was  not granted  as the Director of Transports was not satisfied  of the  non-user of the vehicle for reasons beyond the  control of the respondents.  It is well- settled in law that the tax imposed  on vehicle under the 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.  To put it differently, the taxes are levied  on  the  vehicies  using tfac roads or  in  any  way forming the partofthe flow of traffic on the

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     roads which is required to be regulated and not on the vehicles which

     <  do not use the roads at all.  What is material  and relevant is use of

     road  by vehicles for levy of tax under the Act.   The reasons  tor non- use of roads is immaterial and  irrelevant when the nature of the tax itself is compensatory for use of roads.  Jt follows from sub-section (2) Section 3 of the Act that  where a motor vehicle is not using the roads no tax is levied  thereon.   If any tax has been paid in  relation  to such vehicle then the fax for the period during which it was not  put  on  the  road is refundable.  In  order  to  avoid evasion  of tax the State can compel the owner to pay tax in advance.   In fact sub-section 5(a)&(b) of Section 3-A speak of refund of tax that had been collected earlier.

     9.   Ln the Statement of Objects and Reasons  appended to the amending Act 3 of 1992, it is stated:  "Having regard to  the  commercial  use of omnibuses  exclusively  used  as contract  carriages in normal circumstances, it is generally uneconomic for the registered.

     owners  of  such  omnibuses to put such  omnibuses  to non-use  fr-r  a  very long time.  Cases have  come  to  the notice  of  the Government indicating that many a time  such omnibuses  which purported to have been put to non-use  were operated  clandestinely resuiting in evasion of the tax  and consequent  loss  of revenue to the Government.   In  order, therefore  to  prevent  evasion of tax,  it  was  considered necessary  to make a provision to restrict the refund of the tax  to  a  total  period of three months of  non-use  in  a financial year, in normal circumstances.  However;  in order to  meet  with the genuine cases where such an  omnibus  may have  to  be  put to non-use for a pcri,od  exceeding  three months  on  account  of reasons beyond the  control  of  the registered  owner, provision is made .for refund of tax  for non-use  of the omnibus for a period exceeding three months" Otherwise  also  various  provisions   and  safeguards   are available in the Act.  The authorities have enough powers to check evasion of tax even without

     insisting  for  the  reasons  beyond  the  control  of registered  owner or person as to tlie reasons for  non-use. A  registered owner or the person in possession in  addition to  filing  of  Form NT, can be directed  to  surrender  the registration  certificate, fitness certificate etc.  for the period of non-use.  If the vehicles are clandestinely put to use

     without  the  certificate  of  registration.,  fitness certificate  or  taxation  certificate, it is  open  to  the authorities  to take action against the owner in  accordance with law.  Mere apprehension of clandestine use of a vehicle cannot  be a ground for imposing tax on omnibuses which  are not put on road or kept away from use.  In form NT (Annexure P-4) a declaration is made as to the place where the vehicle is kept for non-use and further declaration is made that the owner  shall not remove the said vehicle from the said place without  the previous permission of the taxation  authority. In  the said Form it is also stated that the certificate  of taxation in respect of the said vehicle is also surrendered. Motor  Vehicle Inspectors could also check and verily  about

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the  availability of the vehicle in place of "non-use".  Any clandestine  operation  or the absence of vehicle  from  the declared  place  of non-use whenever and  wherever  detected attracts  heavy penalty to the extent of 25% of the tax  due and  for  repetition  of such contraventions the  amount  of penalty  is coercively increased.  Further claim for  refund of  tax for the period of non-use of vehicleis allowed  only if the owner or any person having possession or control of a designated  omnibus  proves  to   the  satisfaction  of  the tfiXation authorify that the bus in respect of which

     the  fax  has been paid has not been used or kept  tor use  for  a particulai period.  If the authorities  are  not .satisfied  as to the non-use of vehicle it is open to  them to deny claim for refund.  There is sufficient authority and machinery  to  the appellants to prevent evasion of  tax  in this regard.  Lookng to the Statement of Objects and Reasons tor  the  amendment, it appears that the appellants  do  not trust  the  owners  of omnibuses or their own  officers  and machinery.   Mere  apprehension  of   the  appellants   that omnibuses  will be clandestinely operated and claim would be made  for  refund  on the ground of their  non-use,  in  our opinion,  cannot justify for the insistence of  satisfaction as  to the reasons beyond the control of the owner or person for  non-use  of  a omnibus.  This apart, there is  no  good reason  put forward as to why the omnibuses are singled out. Even  heavy  goods transport vehicles are also purchased  by investing  heavy amount.  In other words, the condition that for  a period of non-use beyond three months, the owner or a person  in  possession or control of vehicle should  satisfy the  reasons  beyond the control for non-use of  vehicle  is attached  to  omnibuses and not to other vehicles.   If  the appellants  see any lifficulty in working of their  officers in the matter of checking vasion of tax.  that itself is not a good ground to uphold the validity

     of  the  condition  that an owner or  possessor  of  a vehicle  should satisfy as to die non-use of omnibus for the reasons  beyond his control in order to claim refund of  tax for a period exceeding three months.

     Thus.   having  regard to aJI aspects, we do not  find any  good or valid reason to interfere with the judgment and order under appeal.  Consequently we dismiss it with costs.