TaxTMI 
TaxTMI 
1987 (11) TMI 383
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....at Court in Noorullha Khan v. State of Karnataka (Writ Petition No. 8302 of 1980 and connected cases decided on 26.6.1985). The appellant has filed this appeal by special leave against the decision of the High Court dismissing his writ petition The facts of the case are briefly these. The appellant is the registered owner of the motor vehicle which he has been running as a stage carriage under a permit issued by the Regional Transport Authority under the provisions of the Motor Vehicles Act, 1939. He is liable to pay tax in respect of the said motor vehicle under section 3 of the Act which provides that a tax at the rates specified in Part A of the Schedule to the Act shall be levied on all motor vehicles suitable for use or roads. Item 4 in Part A of the Schedule to the Act, as it stood in the year 1985, which related to the levy of tax on motor vehicles which were used as stage carriages reads thus:- Class of vehicles Quarterly tax for vehicle fitted withpneumatic tyres (1) (2) "4. Motor Vehicles other than those mentioned in items 5, 6 and 7 plying for hire and used for transport of passengers and in respect of which permits have been issued under the Motor Vehicl....
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....e WAS permitted to carry. Section 8 of the Act which provides for payment of additional tax in respect of motor vehicles reads thus:- "8. Payment of additional tax-When any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in a such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle shall pay an additional tax or a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used and taxation authority shall not grant a fresh taxation card in respect of such vehicle so altered or proposed to be so used until such amount of tax has been paid. It appears that on some stray occasions prior to the institution of the writ petition it had been found that in the motor vehicle which the appellant was operating as a stage carriage there were few passengers in excess of the number of passengers which he was allowed to carry under the permit ....
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....s a central act, which was enacted pursuant to Entry 20 of List III of the Seventh Schedule to the Government of India Act, 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution of India. The Act under which a tax is leviable on motor vehicles has been enacted by the Karnataka State Legislature in exercise of its powers under Entry 57 of List II of the Seventh Schedule to the Constitution of India. Thus the scope of the Act and the scope of the Motor Vehicles Act, 1939 are entirely different Section 42 of the Motor Vehicles Act, 1939 provides that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorities the use of the vehicle in that place in the manner in which the vehicle is being used. The expression 'permit' is defined under section 2(20) of the Motor Vehicles Act, 1939 as a document issued by the Commission or a State or Regional Transport Authority authorizing the use of a transpor....
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.... of the motor vehicle in the above case has carried on one occasion in a given quarter 47 passengers (inclusive of the driver and the conductor) and on another occasion in the same quarter 50 passengers (inclusive of the driver and the conductor). In this illustration the question which arises for consideration is whether the registered owner is liable to pay Rs. 6,535 for that quarter or Rs. 6,535 plus the additional tax in respect of two more passengers or Rs. 6,535 plus the additional tax for five more passengers during that quarter. Section 8 of the Act PROVIDES that when any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle shall pay an additional tax of a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used and the taxation authority shall not grant a fresh taxation ....
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....vour under the Motor Vehicles Act, 1939 and thus his liability is limited by the condition incorporated in the permit. It would have been possible to levy higher tax on the appellant p only if the words 'which the vehicle is permitted to carry' in item 4(2) of Part A to the Schedule to the Act had been omitted The Court cannot ignore those words while construing the said item since it relates to the levy of a tax. Moreover the provision in section 8 is specific. It says that the additional tax shall be equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable is consequence of its being altered or so proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. There is another difficulty in applying section 8 to stray cases of overloading. Additional tax is payable for the period during which the vehicle is proposed to be used for a purpose which will attract a higher rate of tax. The rate of tax is fixed taking one quarter i.e. 3 months as a unit of time for taxation. Is it reasonably po....
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....rry in item 4(2) become meaningless and ineffective. The High Court in Noorullha Khan's case (supra) overlooked the presence of the words 'which the vehicle is permitted to carry' which are found in clause (b) of item 7 of the Act also. It is no doubt true that it is not in the public interest that a registered owner of a motor vehicle should be allowed to carry more passengers than the maximum number of passengers that he is allowed to carry under his permit and such a tendency on the part of any registered owner should be checked That fact, however, cannot be relied upon for the purpose of construing the items in Part A of the Schedule to the Act liberally and in favour of the State Government. It is needless to say that a law which imposes a tax should be construed strictly. If the action on the part of the registered owner is contrary to the provisions of the Motor Vehicles Act, 1939 there is sufficient provision in that Act to take appropriate action against him and either to cancel the permit or to suspend it. In the instant case we feel that when a registered owner of a motor vehicle which is permitted to be used as a stage carriage cannot be asked to pay addi....