TaxTMI 
TaxTMI 
2025 (8) TMI 1845
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....ng equipments. 5. Appellant was awarded a contract dated 17.11.2020 for handling and storage of iron and steel materials at central dispatch yard within Visakhapatnam Steel Plant, Andhra Pradesh, a corporate entity of Rashtriya Ispat Nigam Limited ('RINL'). 6. Pursuant to the contract and consequential work order dated 19.01.2021, appellant deployed 36 numbers of motor vehicles bearing various registration numbers, details of which are mentioned in the paperbook, for plying within the central dispatch yard premises. 7. It may be mentioned that prior to the contract, appellant had duly paid the requisite tax for the aforesaid registered motor vehicles and had obtained fitness certificate, insurance certificate and pollution under control certificate as per requirement of the statutory provisions. 8. Upon allotment of the contract, appellant deployed the motor vehicles inside the central dispatch yard premises and with effect from 01.04.2021 all the motor vehicles stopped plying on the public roads as those were confined to within the central dispatch yard premises only. Appellant was under obligation to retain these vehicles within the premises till continuation ....
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....efore the High Court being W.P. No. 6206 of 2022 which was disposed of vide order dated 26.04.2022 directing the respondents to consider the prayer of the appellant expressed vide letters dated 07.12.2020 and 05.10.2021 for grant of exemption from payment of motor vehicle tax. Relevant portion of the order dated 26.04.2022 reads as under: 11. Accordingly, the Writ Petition is disposed of with a direction to the respondents to consider the representations of the petitioner dated 07.12.2020 and 05.10.2021 for grant of exemption from payment of tax. Needless to say, the 2nd respondent shall also permit the petitioner to produce all such material or evidence necessary to demonstrate that the vehicles of the petitioner have not been used or kept for use on the public roads in the State of Andhra Pradesh and shall pass an order, setting out reasons, after due opportunity of hearing being given to the petitioner. 12. Thereupon, the respondents shall either refund or retain the amounts collected from the petitioner in accordance with the orders passed by the 2nd respondent. The said exercise is to be completed, within a period of eight weeks from the date of receipt of th....
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....er dated 19.12.2024 that the related Special Leave Petition (Civil) No. 1547 of 2025 came to be filed. On 24.01.2025, this Court while issuing notice, stayed the operation of the impugned judgment and order dated 19.12.2024 but clarified that appellant would not be entitled to enforce the directions of the learned Single Judge as contained in the judgment and order dated 13.06.2023. 21. Mr. Vijay Hansaria, learned senior counsel appearing for the appellant submits that the issue involved in this case is with regard to liability to pay motor vehicle tax under Section 3 of the A.P. Act, 1963. Referring to Section 3, he submits that on a plain reading thereof it is evident that a tax shall be levied on every motor vehicle if three situations are satisfied: (i) the tax is on a motor vehicle; (ii) the motor vehicle is used or kept for use; (iii) in a public place in the State. 21.1. Mr. Hansaria submits that the expression in a public place' is not only descriptive but also qualifies and limits both the words 'used' and 'kept for use'. Legislature has consciously fastened the liability to pay tax on a motor vehicle keeping in mind tha....
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.... its motor vehicles are plying inside the operational area only i.e. within the enclosed premises of RINL, the corporate entity of Visakhapatnam Steel Plant. The central dispatch yard situated inside Visakhapatnam Steel Plant is evidently a restricted area where the public is not allowed entry without prior permission. The gates are guarded by CISF personnel. As such, central dispatch yard cannot be treated as or deemed to be a 'public place' as defined under Section 2(34) of the M.V. Act. 21.6. On a query by the Court, learned senior counsel submits that appellant is not seeking exemption from payment of tax for the entire period of registration of the vehicles; exemption has been sought only for the limited period when the vehicles were used exclusively within the enclosed premises of RINL which is not a 'public place'. He submits that the licensing authority dismissed the exemption application of the appellant taking a completely erroneous view that since RINL is a government company, therefore, it is also a 'public place'. This view is wholly untenable and rightly interfered with by the learned Single Judge. Placing reliance on a decision of a three-J....
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....order dated 14.06.2022 before the appellate authority. However, the appellate authority dismissed the appeal vide the order dated 27.08.2022 placing reliance on Rule 12A. It was held that Rule 12A requires complete non-use not merely non-use in a 'public place'. 22.5. This order came to be assailed by the appellant before the High Court in W.P. No.38285 of 2022 which was allowed by the learned Single Judge vide the judgment and order dated 13.06.2023. Respondents were directed to refund the amount of Rs. 22,71,700.00 to the appellant on the ground that RINL premises was not a 'public place'. 22.6. Aggrieved thereby, respondents herein preferred W.A. No. 711 of 2023. Division Bench of the High Court was of the view that the decision of this Court in Bolani Ores Limited (supra) was distinguishable; rather, placed reliance on the decision of this Court in Akhil Gujarat Pravasi V.S. Mahamandal (supra). According to the Division Bench, liability to pay motor vehicle tax is not contingent on actual use. Rule 12A of the A.P. Rules, 1963 creates a presumption that a motor vehicle is 'kept for use' unless a written intimation of non-use is provided. Appellant f....
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....d. 25. The Andhra Pradesh Motor Vehicles Taxation Act, 1963, already referred to as the A.P. Act, 1963, is an Act to consolidate and amend the law relating to levy of a tax on motor vehicles in the State of Andhra Pradesh. Section 3 is the charging section. Heading of Section 3 is 'levy of tax on motor vehicles'. Sub-section (1) of Section 3 is relevant and the same reads thus: Section 3: Levy of tax on motor vehicles: (1) The Government may, by notification, from time to time, direct that a tax shall be levied on every motor vehicle used or kept for use, in a public place in the State. 25.1. From a reading of Section 3(1), it is evident that the government i.e. the State Government may by notification direct that a tax shall be levied on every motor vehicle used or kept for use in a 'public place' in the State. Focus of sub- section (1) of Section 3 is on the motor vehicle which is used or kept for use in a 'public place' in the State. We will deal with this aspect in a more detailed manner at a subsequent stage. 26. Section 4 deals with payment of tax and grant of licence. Sub-section (1)(b) of Section 4 entitles a person whose v....
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....or vehicles kept for use: For the purpose of Section 3 of the Act, a motor vehicle shall be deemed to be kept for use and is liable to tax unless the registered owner or the person having possession or control of the motor vehicle intimates in writing to the Licensing Officer before the commencement of the quarter for which tax is due that the motor vehicle shall not be used after expiry of the period for which tax has already been paid. The Licensing Officer shall on receipt of the intimation, acknowledge its receipt. Provided that in the case of non-transport vehicles, if the owner of the vehicle fails to submit the stoppage report within the period specified above but subsequently gives an affidavit with full details to the effect that the vehicle was not in existence or that it was already disposed of to another person and that he is no more in possession of it, or that the tax in respect of the vehicle was paid elsewhere in the same State or in some other State and as such he is not liable for payment of tax in the jurisdiction of that Licensing Officer or proves to the satisfaction of the Licensing Officer that the vehicle has not been used, it may be deemed....
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....ring in Section 2 (34) of the Motor Vehicles Act in view of Section 3 of the Bihar and Orissa Motor Vehicles Taxation Act which mandated that no person shall drive a motor vehicle in any 'public place' unless he holds an effective driving license issued to himself authorizing him to drive the vehicle and no person shall so drive a motor vehicle as a paid employee or shall so drive a transport vehicle unless his driving license specifically entitled him to do so. It was in the aforesaid context that this Court examined the meaning of the expression 'public place' and held as under: A 'motor vehicle' under Section 2(18) has been defined as "any mechanically propelled vehicle adapted for use upon road .... " Having regard to the context of the definition of "public place" in Section 2(24) of the Act, the regulatory character of the Act, and the use of the word 'road' used in a public Act, road would mean a "public road" which word as already noticed has been used in the Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act. The word "public place" has been defined in Section 2(24) as meaning "a road, street, way or other place whether a thor....
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....d exclusively for use in the tea estates and intended to be used only for agricultural purposes; those were not used nor kept for use in the State as contemplated under Section 3 of the aforesaid Act. Appellant had eight tea estates contiguous to each other. This Court agreed with the contention of the appellant that the tax was only exigible on vehicles used or kept for use on public roads. If the words 'used or kept for use' in the State are construed as used or kept for use on the public roads of the State, the said Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II. If the vehicles were suitable for use on public roads, they were liable to be taxed. 33. This brings us to the case of Akhil Gujarat Pravasi V.S. Mahamandal (supra) heavily relied upon by the respondents. In that case, the High Court of Gujarat declared Section 3A (1) and (2) of the Bombay Motor Vehicles Tax Act, 1958 and also Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959 ultra vires and those were accordingly struck down. Consequential mandamus was issued to the State authority not to recover any tax in pursuant thereto from the vehicles of the r....
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....be levied and collected on all omnibuses which are used or kept for use in the State exclusively as contract carriages a tax at the rate specified in the table. 33.3. Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959 as amended reads thus: 5. (1) A registered owner or any person who has possession or control of a motor vehicle in respect of which tax is paid in advance, not intending to use or keep for use such vehicle in the State and desiring to claim refund of tax on that account shall before the commencement of the period for which the refund of tax is to be claimed, make a declaration in Form NT for any specified period not exceeding beyond the period for which the tax is paid in advance to the taxation authority in whose jurisdiction such vehicle is to be kept under non- use along with the certificate of taxation as well as certificate of fitness in case of transport vehicles and a fee of rupees ten: Provided that where a vehicle is rendered incapable of being used or kept for use on account of an accident, mechanical defect or any other sufficient cause, which makes it impossible to give an advance declaration as aforesaid then such declaration shall b....
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....le 5 of the Bombay Rules where the expressions 'public place' or 'public road' are conspicuously absent. Whether a motor vehicle is used or kept for use in a 'public place' in the State and hence liable to pay motor vehicle tax was not an issue in Akhil Gujarat Pravasi V.S. Mahamandal (supra). On the contrary, the three- Judge Bench of this Court in Bolani Ores Ltd. (supra) has categorically held that if the public have no right of access to any place which is not a road, street, way or thoroughfare, it will not be a 'public place'. A motor vehicle which is not adopted for use upon roads to which the public have no right of access is not a motor vehicle. It was held that dumpers and rockers would not be taxable as long as those were working solely within the private premises of the respective owners. Bolani Ores Ltd. (supra) is directly on the point in issue. 35. Reliance placed by the respondents upon Aravind Ramakant Modawdakar (supra) is also totally misconceived inasmuch as in that case, this Court held that once a vehicle becomes liable for payment of tax, the extent and quantum of use of the vehicle is not a decisive factor for the purpose o....
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....t he is operating his vehicles in the premises of RINL, which is situated in the State of Andhra Pradesh. As per the contract between the petitioner and RINL, the petitioner is receiving hire charges, but he is not willing to pay motor vehicle tax that is due to the government. It is also to be noted that RINL, Visakhapathnam, is a government company established with government funds and it is also a public place, for that matter. It is to be noted that the other companies that are executing the contract at RINL, and operating their vehicles in the premises of RINL, are paying motor vehicles tax, for their vehicles. It is also to be noted the actual use or non-use of public roads cannot be a ground for escaping liability. Thus, it is established beyond reasonable doubt that the vehicles of the petitioner-owner, are under use in the State of Andhra Pradesh and hence, liable to pay applicable motor vehicles tax. 40.1. Thus, according to the Regional Transport Officer, appellant was operating his vehicles in the premises of RINL for which he was receiving hire charges. RINL is a government company established with government funds; and thus it is a 'public pla....
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....hly restricted area with no ordinary member of the public having any access to enter the premises, the definition of 'public place' under Section 2 (34) of the Act would not apply to the above said Yard. 21. Even this Court, earlier W.P.No.6206 of 2022 was disposed of by directing the respondents to consider the representation of the company dated 07.12.2020 and 05.10.2021 for grant of exemption from payment of tax upon the company producing all such material or evidence necessary to demonstrate that the vehicles of the company have not been used or kept for use on the public roads in the State of Andhra Pradesh, after giving due opportunity of hearing to the company, the respondents shall refund or retain the amount collected from the company thereafter. 22. In the present case, though the petitioner has submitted representations to the 3rd respondent on 25.05.2022 seeking for grant of exemption from payment of tax and refund of Rs.22,71,700/- along with interest @ 6%, which was rejected by the 3rd respondent vide order dated 14.06.2022 by stating that RINL is a Government company therefore falls within the definition of 'public place', which is a....
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....es, 'suitable for use on the roads' is not dependent upon the actual user of such roads. 35. In fact, Rule 12A of the Rules which is not specifically under challenge, deems a motor vehicle to be kept for use and liable to tax unless an intimation is given in writing by the owner/possessor or the person who controls the vehicle that the motor vehicle shall not be used after expiry of the period for which tax has already been paid. 36. The proviso to the said Rule 12A, however, further envisages that where an owner of a non- transport vehicle fails to submit the stoppage report but proves to the satisfaction of the licensing officer that the vehicle has been used, it may be deemed that the vehicle has not been kept for use. Rule 12A therefore envisages a 'stoppage report' or a 'non-use report' which cuts across the barriers of private and public spaces as regards user of such vehicles. Thus, the argument that the user of the vehicles in a premises such as the CDY in the Visakhapatnam Steel Plant, which is not a public place, would entitle the petitioner to seek exemption from payment of tax. goes contrary to Rule 12A, which specifica....
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....to give effect to Section 3. It is trite law that a rule cannot traverse beyond the scope and ambit of the parent statute. Rule 12A has to be interpreted in such a way so as to be in sync with Section 3. Question is not of the motor vehicle being deemed to be kept for use and hence liable to tax. Requirement of law is that the motor vehicle should be used or kept for use in a 'public place'. When admittedly the motor vehicles of the appellant were confined for use within the RINL premises which is a closed area then question of the vehicles being used or kept for being used in a 'public place' does not arise. In the ultimate analysis, the core of the controversy lies in interpretation of Section 3. Rule 12A, as already discussed above, has to be read to give effect to the charging section. Therefore, the words appearing in Rule 12A i.e. 'a motor vehicle shall be deemed to be kept for use' has to be read as 'a motor vehicle deemed to be kept for use in a public place'. 48. Another way of looking at Rule 12A is that intimation in writing to the Licensing Officer would be required only when there is stoppage of user of the motor vehicle, be it in a &....