Motor vehicle tax liability on two-wheelers and mandatory delay penalty sustained under the Bihar taxation scheme.

Two-wheelers traded by dealers fall within the adopted definition of "motor vehicle" under the Bihar Motor Vehicles Taxation Act, 1994, because section 2(c) incorporates section 2(28) of the Motor Vehicles Act, 1988; they are therefore liable to tax under section 6. The statutory scheme also treats delayed payment penalty as mandatory: section 23, read with rule 4, fixes the penalty rate according to the period of delay and leaves no discretion to waive or reduce it. On that basis, the tax demand and prescribed penalty for delayed payment are sustained.

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Issues: (i) Whether two-wheelers traded by dealers fall within the expression "motor vehicles" for the purpose of tax under section 6 of the Bihar Motor Vehicles Taxation Act, 1994. (ii) Whether penalty for delayed payment of tax under section 23 of the Bihar Motor Vehicles Taxation Act, 1994 read with rule 4 of the Bihar Motor Vehicles Taxation Rules is discretionary or mandatory.

Issue (i): Whether two-wheelers traded by dealers fall within the expression "motor vehicles" for the purpose of tax under section 6 of the Bihar Motor Vehicles Taxation Act, 1994.

Analysis: Section 2(c) of the Bihar Motor Vehicles Taxation Act, 1994 adopts the definition of "motor vehicle" from section 2(28) of the Motor Vehicles Act, 1988. On that statutory scheme, two-wheelers, including motor cycles, are included within the adopted definition. The question had also already been concluded against the petitioners in earlier decisions relied upon in the judgment.

Conclusion: The petitioners' two-wheelers are liable to tax under section 6 of the Bihar Motor Vehicles Taxation Act, 1994.

Issue (ii): Whether penalty for delayed payment of tax under section 23 of the Bihar Motor Vehicles Taxation Act, 1994 read with rule 4 of the Bihar Motor Vehicles Taxation Rules is discretionary or mandatory.

Analysis: Section 23 provides for penalty when tax is not paid within the prescribed period, and rule 4 prescribes the rate of penalty according to the period of delay. The statutory scheme leaves no discretion to the taxing authority to waive or reduce the prescribed penalty. The opportunity earlier granted to make representations did not alter the statutory mandate.

Conclusion: The penalty for delayed payment is mandatory and the demand under section 23 read with rule 4 is justified.

Final Conclusion: The writ petitions fail because the tax liability on two-wheelers stands confirmed and the prescribed penalty for delayed payment cannot be avoided or reduced by administrative discretion.

Ratio Decidendi: Where the taxing statute itself fixes liability and prescribes penalty for delayed payment at a notified rate, the authority has no discretion to waive or alter the statutory penalty.

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