State motor vehicles tax can apply to trade-certificate vehicles held by manufacturers or dealers, with statutory penalty for delayed payment.

A State motor vehicles tax may validly apply to roadworthy vehicles kept by manufacturers or dealers in the course of business under a trade-certificate regime, because the charging provision operates before final registration and is separate from temporary registration. The fact that the Motor Vehicles Act excludes manufacturers from the dealer definition did not limit the State's taxing power, since the two enactments operate in different fields and the levy falls within the State Legislature's competence. Statutory penalty and interest for delayed payment were also upheld because the Act expressly provides for them, and the challenge based on lack of notice did not arise once notice and hearing were given.

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Issues: (i) Whether tax was leviable under Section 6 of the Bihar Motor Vehicles Taxation Act, 1994 on motor vehicles in the possession of manufacturers or dealers holding the vehicles in the course of business under trade certificates. (ii) Whether penalty and interest imposed for non-payment of such tax were sustainable.

Issue (i): Whether tax was leviable under Section 6 of the Bihar Motor Vehicles Taxation Act, 1994 on motor vehicles in the possession of manufacturers or dealers holding the vehicles in the course of business under trade certificates.

Analysis: Section 6 was held to be a distinct charging provision operating at the stage prior to final registration under Section 5 and separate from temporary registration under Section 7(4). The tax under Section 6 applies to vehicles suitable for use on roads while in the possession of a manufacturer or dealer in the course of business and is an annual levy in lieu of the rate under Schedule I. The Court further held that the amendment in the Motor Vehicles Act, 1988 excluding manufacturers from the definition of dealer did not affect the State's power to levy tax under the Bihar Act, because the two enactments operate in different fields. The levy was also held to be within the State Legislature's competence under Entry 57 of List II.

Conclusion: Tax under Section 6 was validly leviable, and the challenge to the levy failed.

Issue (ii): Whether penalty and interest imposed for non-payment of such tax were sustainable.

Analysis: Section 23 of the Bihar Motor Vehicles Taxation Act, 1994 expressly provides for penalty where tax is not paid within the prescribed period, and Rule 4 prescribes the rates. The Court held that the penalty scheme under the Act is statutory and revenue-protective, and that the earlier challenge to the provision had already been rejected, with the only defect in the earlier round being absence of show-cause notice. Since notice was issued and hearing was granted, the penalty could not be interfered with. The plea of bona fide conduct was not accepted as a ground to displace the statutory consequence.

Conclusion: The penalty and interest were upheld.

Final Conclusion: The levy under Section 6 and the consequential penalty were sustained, leaving no ground for interference in the appeals.

Ratio Decidendi: A State motor vehicles tax may validly be levied on manufacturers or dealers in possession of roadworthy vehicles in the course of business under a trade-certificate regime, and statutory penalty for delayed payment follows once the taxing provision and procedural safeguards are satisfied.

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