TaxTMI 
TaxTMI 
TaxTMI 
2005 (9) TMI 644
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....porters of heavy equipments using mechanized carriage depending upon the items to be transported. During the period 8.12.1989 to 31.3.1990, they were engaged by Central Power Research Institute of India (CPRI) to transport for them six units of transformers from Madras Port to its site at Bangalore. The goods were to be lifted from Madras Port and transported to CPRI at Bangalore by vehicular transport mode through the States of Tamilnadu, Andhra Pradesh and Karnataka. In the matter of transportation of over-dimensional cargo, the appellant made use of a drawing vehicle, called by the appellant as a tractor to push/pull the trailers loaded with the abovementioned equipments. Between 8.12.1989 and 11.1.1990, three units of the tractor-trailer carrying transformers entered the State of Karnataka via Tamilnadu and Andhra Pradesh. On 18.1.1990, on account of the entry of three units of tractor-trailer, the taxation authority issued four demand notices calling upon the appellant to pay a sum of Rs. 5.69 lacs as tax under section 3(2) read with item 10 of part B of the schedule to the said 1957 Act on the ground that the said three units were transport vehicles, which required permits ....
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....4) and consequently, a transport vehicle under section 2(47) of the M.V. Act liable for permit under section 66 of that Act. In the circumstances, the learned single judge dismissed the writ petition. 6. Aggrieved by the decision of the learned single judge, the appellant carried the matter in appeal to the division bench of the Karnataka High Court by way of writ appeal no. 2324 of 1998. By impugned judgment dated 23.9.1999, the division bench of the High Court held that in the present case, the appellant had obtained national permit for the trailers but did not obtain permits for the tractor-trailer combination under section 66 of the M.V. Act; that, under section 66, permits were required to be obtained for such combinations as they came under the definition of "goods carriage" under section 2(14) and consequently, under definition of "transport vehicle" under section 2(46) of the M.V. Act; that any vehicle though not constructed or adapted to carry goods became a "goods carriage" when it was used for carrying the goods and, therefore, the tractor-trailer combination would attract section 66 of the M.V. Act, requiring the appellant to obtain permits for their combination(s) and....
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....nd does not tax a tractor-trailer combination; that item 10 of Part B does not tax a combination of tractor-trailer per se but only taxes a tractor alone which is in the non-transport category and that if a tractor was a transport vehicle, it would be taxable under item 3 of Part B of the schedule to the Taxation Act. Learned counsel further submitted that section 3 of the Taxation Act is the charging section which levies tax on all motor vehicles suitable for use on the road; that in the present case, since the motor vehicle was used for a period not exceeding 30 days, the tax became leviable under section 3(2), but for the exemption granted to non-transport vehicle and the reciprocal agreement not to tax transport vehicles. In this connection, learned counsel has placed reliance on the notification issued by the State of Karnataka on 12.10.1959 under section 16 of the 1957 Act. Learned counsel submitted that the tractors are registered in the State of Maharahstra as non-transport vehicles because they cannot carry goods on it and because its purpose is only to draw and haul another goods carriage such as a "trailer". On the other hand, according to the learned counsel, the traile....
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....cation dated 19.6.1992 under section 41(4) of the 1988 Act by which it has classified motor vehicles into transport and non-transport vehicles; and that under the said notification, trailers have been classified as transport vehicles whereas tractors have been classifieds as non-transport vehicles. Learned counsel submitted that the said notification is binding on the taxation authority and, therefore, the taxation authority was not entitled to embark upon the classification of motor vehicles in the process of interpreting exemption notification under the Taxation Act. The learned counsel, therefore, submitted that the taxation authority under the Taxation Act was not entitled to create a new category of vehicle and insist on compliance of section 66 of the M.V. Act while denying exemption to the appellant. 9. At the outset, we may point out that we are concerned with the period 1989-90 in this matter. 10. To appreciate the above arguments, we have to consider the Schemes of the Taxation Act, 1957 and the M.V. Act, 1988. 11. The Taxation Act has been enacted to consolidate and amend the law relating to the levy of tax on motor vehicles in the State of Karnataka. Under section 2(....
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....up and sign addition declaration in the prescribed form showing the nature of alteration made and containing the prescribed particulars. Section 7 deals with refund of tax. Section 8 deals with payment of additional tax. 12. On examination of the provisions of the Taxation Act, we find that the principle underlying therein is, that, it is the use of the motor vehicle on the given occasion which determines the category of the motor vehicle, whether it is adapted for that purpose or not. Under section 3, levy of tax is on all motor vehicles suitable for use on the roads. Therefore, under the proviso, tractors and trailers used in the farms are excluded as they are not used on the roads. The expression "suitable for use on roads" finds place in section 3(1) as well as in entry 57 list II of the seventh schedule to the Constitution. Therefore, tramways, railways and farm machinery though mechanically propelled are excluded as they are not suitable for use on roads. Moreover, section 3 of the Taxation Act and its explanation have to be construed on their own force. The combined effect of sections 3, 4, 6, 7 and 8 of the Taxation Act is that the State is empowered to levy tax on all mo....
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....urther held that the consequence of the said explanation to section 3(1) is that the owner is obliged to pay the tax in advance as long as the certificate of registration is current, irrespective of the condition of the vehicle for use on the roads and irrespective of the fact whether the vehicle has a certificate of fitness under the Motor Vehicles Act. In the said judgment, it has been laid down that section 3(1) of the Taxation Act and its explanation have to be construed on their own force and not with reference to section 38 of the M.V. Act, 1939 (section 56 of the MV Act, 1988) which dealt with certificate of fitness read with section 22 of the M.V. Act, 1939 (section 39 of the MV Act, 1988) which dealt with the certificate of registration. Therefore, one has to read sections 3 and 4 of the Taxation Act on their own force and not with reference to the provisions of the M.V. Act dealing with registration of motor vehicles and issuance of fitness certificate. 15. On reading the aforestated judgment, it is clear that the categorization of motor vehicle for taxation under the 1957 Act will depend upon the use of the motor vehicle on the given occasion, whether it is adapted for ....
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....f the M.V. Act, 1988. Taxation is governed by the Taxation Act, which falls under entry 57 list II of the seventh schedule to the Constitution. Taxation is governed by a separate Code which in the present case happens to be the Karnataka Motor Vehicles Taxation Act, 1957 and as held by this Court in the case of K. Gopalakrishna Shenoy (supra), the provisions of sections 3 and 4 of the Taxation Act have to be construed on their own force and not with reference to the provisions of registration or fitness certificate under the M.V. Act, 1988. 17. The question still remains as to whether the taxation authority was right in categorizing tractor-trailer as a separate assessable entity and whether that authority was right in calling upon the appellant to obtain permit under section 66 of the M.V. Act, 1988. 18. In order to answer this issue, we have to examine briefly section 2, which is the definition section in the M.V. Act, 1988. In that connection, we reproduce herein below the following: 2. Definitions.- In this Act, unless the context otherwise requires, (14) "goods carriage" means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor....