Fresh tax demand and natural justice: liability must be determined first, and prior proceedings did not bar the challenge.

A subsequent motor vehicle tax demand based on a fresh period or fresh cause of action is not barred by Order 2 Rule 2 CPC or constructive res judicata, and the availability of an appellate remedy does not by itself defeat writ jurisdiction where natural justice is breached. Where liability to tax is disputed, the authority must first determine the foundational facts, including whether the vehicles are taxable and used within the State, after giving notice and hearing. A demand issued without such prior determination and opportunity to contest cannot operate as a final recovery order and must instead be treated as a show-cause notice, with liability determined afresh in accordance with law.

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Issues: (i) whether the writ petition was barred by Order 2 Rule 2 of the Code of Civil Procedure, 1908 or by constructive res judicata, and whether availability of an appellate remedy justified dismissal; (ii) whether demand notices for motor vehicle tax could be issued without prior determination of liability and without hearing the assessee.

Issue (i): Whether the writ petition was barred by Order 2 Rule 2 of the Code of Civil Procedure, 1908 or by constructive res judicata, and whether availability of an appellate remedy justified dismissal.

Analysis: The subsequent demand notices arose after disposal of the earlier writ petition, so the later challenge rested on a fresh cause of action and could not be barred by Order 2 Rule 2. Constructive res judicata also did not apply because the earlier matter had not attained finality and, in tax matters, liability for different periods is generally treated as distinct. The Court further held that the existence of an appellate remedy did not by itself bar writ jurisdiction where the demand had been raised in breach of natural justice.

Conclusion: The preliminary objections based on Order 2 Rule 2, constructive res judicata, and alternative remedy were rejected in favour of the assessee.

Issue (ii): Whether demand notices for motor vehicle tax could be issued without prior determination of liability and without hearing the assessee.

Analysis: The charging provision required existence of a motor vehicle and its use or keeping for use in the State, and the scheme of the Act contemplated determination of the foundational facts before recovery. Since liability was disputed, the assessee was entitled to notice and an opportunity to contest whether the dumpers were motor vehicles and whether they were used on public roads within the State. A demand made without such prior determination and hearing offended the principles of natural justice and could not stand as a recovery order in the first instance.

Conclusion: The impugned demand notices were invalid as final recovery demands and had to be treated as show-cause notices, with the matter remitted for fresh determination after hearing the assessee.

Final Conclusion: The demand notices were set aside, the assessee was given an opportunity to file objections and evidence, and the taxing authority was directed to determine liability afresh in accordance with law.

Ratio Decidendi: In tax matters, a subsequent demand based on a fresh period or fresh cause of action is not barred by constructive res judicata or Order 2 Rule 2, and where the very liability to tax is disputed, the authority must first determine the foundational facts after affording hearing before proceeding to recovery.

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