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of <h1>Court sets aside demand notices, treats as show cause notices. Petitioners granted time to object. Officer to decide within 6 months.</h1> The court allowed the appeal, setting aside the demand notices and directing the assessing officer to treat them as show cause notices. The petitioners ... - Issues Involved:1. Whether the machines/dumpers are 'motor vehicles' under the Rajasthan Motor Vehicles Taxation Act, 1951.2. Applicability of Order 2, Rule 2 CPC and constructive res judicata.3. Availability and adequacy of alternative remedy.4. Compliance with principles of natural justice in issuing demand notices.Issue-wise Detailed Analysis:1. Whether the machines/dumpers are 'motor vehicles' under the Rajasthan Motor Vehicles Taxation Act, 1951:The petitioners challenged the demand notices on the ground that the machines/dumpers are not 'motor vehicles' within the meaning of the Rajasthan Motor Vehicles Taxation Act, 1951, despite being registrable under the Motor Vehicles Act, 1988. The court analyzed the definition of 'motor vehicle' and considered whether the dumpers, used exclusively within the mining area, fall under this definition. The court noted that the determination of whether the dumpers are 'motor vehicles' involves assessing if they are adapted for use upon roads and whether they are of a special type adapted for use only in a factory or enclosed premises. The court emphasized that the dominant use of the vehicle is the determining factor, not incidental movement on roads.2. Applicability of Order 2, Rule 2 CPC and constructive res judicata:The court held that the principle of Order 2, Rule 2 CPC was misconceived in this case because the demand notices were issued after the earlier writ petition was decided. The cause of action for the present proceedings arose after the earlier decision, making the principle of Order 2, Rule 2 inapplicable. Regarding constructive res judicata, the court noted that the earlier decision had not attained finality as it was subject to appeal. Therefore, the findings in the earlier petition could not operate as res judicata in the subsequent proceedings. The court also highlighted that the issues in tax liability for different periods are distinct and independent, and the principle of constructive res judicata does not apply to proceedings for different assessment periods.3. Availability and adequacy of alternative remedy:The court acknowledged that an appeal under Section 14 of the Taxation Act is available to any person aggrieved by an order relating to the determination of recovery of tax. However, the court found that no such order was made before raising the demand, and the demand notices were issued without determining the tax liability after hearing the petitioners. The court reiterated that where orders are passed in violation of principles of natural justice, the existence of an alternative remedy does not bar the maintainability of a petition under Article 226 of the Constitution. The court concluded that the petition could not be rejected on the ground of alternative remedy as the demand notices were issued without affording an opportunity of hearing to the petitioners.4. Compliance with principles of natural justice in issuing demand notices:The court found that the demand notices were issued without affording the petitioners an opportunity to be heard, which is a violation of the principles of natural justice. The court emphasized that before recovering tax, an order determining the tax liability must be made after hearing the affected party. The court set aside the demand notices and treated them as show cause notices, directing the assessing officer to decide the objections raised by the petitioners after affording them an opportunity to lead evidence.Conclusion:The court allowed the appeal, set aside the demand notices, and directed the assessing officer to treat the notices as show cause notices. The petitioners were given six weeks to file objections, and the assessing officer was directed to decide the objections within six months, adhering to the principles of natural justice. The amount deposited by the petitioners was to remain as security for the proposed demands.
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