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PETITIONER: THE REGIONAL TRANSPORT OFFICER-CUM-TAXING AUTHORITY, ROURKEL

       Vs.

RESPONDENT: STEEL AUTHORITY OF INDIA LTD.

DATE OF JUDGMENT09/11/1995

BENCH: PUNCHHI, M.M. BENCH: PUNCHHI, M.M. MANOHAR SUJATA V. (J)

CITATION:  1996 AIR  536            1995 SCC  Supl.  (4) 165  JT 1995 (8)   105        1995 SCALE  (6)298

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      The Steel  Authority  of  India,  the  sole  respondent herein,  employs  a  fleet  of  buses  meant  to  carry  its employees from its township to its factory at Rourkela. This has been  so for  over three  decades. For some inexplicable reasons, the  Steel Authority  of India  Ltd. was  all along being made  to pay  tax under  Item 3 of the Schedule to the Orissa Motor Vehicles Taxation Act, 1975 on buses kept by it on the  footing of  being goods  carriers. As is the case of both sides,  Item 3  was hardly  applicable and  yet tax was kept asked  and  paid.  With  effect  from  19-12-1990,  the appellant herein,  i.e., State  of Orissa  and its officers, put  to  change  the  head  of  taxation  and  required  the respondent to  pay higher  tax under Item 4 of the Schedule, whereunder rates  of tax  are prescribed  for motor vehicles plying for  hire and  used  for  conveyance  of  passengers, including motor cabs. Challenging such step the respondent - Steel Authority  of India, moved the High Court of Orissa in a writ petition under Article 226 of the Constitution.      Right at the outset, the High Court in dealing with the controversy fell  into a  factual error in assuming that the change effected  was from  Item No.  6 to  Item No. 4 of the Schedule. Item  No. 6,  however, is  a  residuary  item  and covers up  the cases  of motor  vehicles  other  than  those liable to  tax under the earlier provisions of the Schedule. Since the  case of the respondent - Steel Authority of India Ltd. is  that the  vehicles kept  by it  are for  use of its employees for  the purpose  stated above, without obligating them to  pay hire charges, it was a facility extended to the employees, and  thus per  se, would  not attract exigibility under Item  No. 4  but may  fall under Item No.6, subject to the right  of the  respondent to claim relief under Sections 10 and  15 of  the aforesaid  Act. The  High Court, in these circumstances, pronounced  on certain  legal aspects  of the matter on  the  supposition  that  the  respondent  -  Steel

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Authority of India Ltd. had to prove its facts to claim that it was  not liable  to pay  tax at  all on  the vehicles  in question and  thereby effected  a remand  of  a  sort.  That aspect apparently  was in  the area  where relief  could  be sought under  sections 10  and/or 15  of the Act. As we have been able  to examine the judgment, the question whether the Steel Authority  of India  Ltd. - the respondent herein, was liable to pay tax under Item 6 or Item 4 of the Schedule was not gone into.      Having heard learned counsel for the parties in detail, we do not feel inclined to pronounce upon the correctness or otherwise, of  the judgment  of the  High Court,  when it is conceded by learned counsel for the Steel Authority of India Ltd. that an inquiry may be held on the footing that the tax is exigible  from the  Authority for  keeping its  fleet  of vehicles. And further, the change effected straightaway from rates under Item No. 3 to Item No.4 was uncalled for without there being  a categorical finding by the taxing authorities that those  vehicles were  being run for hire. The appellant on the other hand, has demonstrably not been able to justify before us  how straightaway  that jump  in the rate could be made without  the necessary  fact establishment.  So  we  go through a limited area of consensus to say that till reliefs (if due)  can successfully  be sought by the Steel Authority of India  Ltd. under sections 10 and/or 15 of the Act, it is exigible to  tax and the corrective measure presently can be for changing  the rates of tax under Item No.3 to Item No.6, reserving the  right to  the appellant-State  to come  to  a different conclusion  after a fact finding inquiry, in which of course,  the respondent  would be  associated. The  State cannot be  permitted to act arbitrarily in choosing the Item of  taxation  and  leave  it  to  the  subject  to  disprove liability. It  is the  State which  has to examine the facts and then  apply the  charging Item  on the plain language of the provision  obviating any  unjust imposition.  Till  such stage is arrived at, there is no occasion for the appellant- State to demand tax over and above which in any event is due to it  under Item  No.6 Nonetheless,  we make it clear, that this opinion  of ours  is only  embedded  in  that  area  of consensus and  shall not  be taken  to be a pronouncement on the  applicability   of  Item   No.6,  in   the  facts   and circumstances of the case.      The appeal stands disposed of accordingly. No costs.