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2010 DIGILAW 1262 (KAR)

Rajashree Cement v. State of Karnataka

2010-12-10

B.MANOHAR, K.L.MANJUNATH

body2010
Judgment : 1. The appellants being aggrieved by the order dated 24-05-2010 (Rajashree Cement, Gulbarga District v State of Karnataka and Others (2010 (5) Kar.L.J.592)) made in W.P. No. 16188 of 2007 connected with W.P. Nos. 16507 of 2007, W.P.Nos.8738 and 8739 of 2008 passed by the learned Single Judge, files these appeals. 2. Appellants are the companies registered under the provisions of Companies Act, 1956 and is engaged in manufacturing, sales and distribution of cement at Sedum Taluk, Gulbarga District. The Limestone is the essential raw material required for the manufacture of cement and for the purpose of obtaining the said Limestone, the appellants have entered into mining lease with the State Government by paying royalty. For the purpose of excavating the limestone, the appellants own Earth Moving Equipments, such as dumpers, shovels, forklift, pay loaders, cranes and excavators (hereinafter referred to as ‘EMEs’) for the mining purpose within the factory limits or in the mining area. 3. The State Government in exercise of its power conferred under sub-section (1) of Section 16 of Karnataka Motor Vehicles Taxation Act, 1957 by its notification dated 8-5-1980 exempted the dumpers, rockers, shovels which are exclusively used by the owners in the mining area or the project area for payment of tax, subject to condition that the exemption is admissible only for a period, during which the vehicle is exclusively used by the owner within the mining area or the factory premises thereof and the same is certified by the Officer of Public Works Department above the rank of Assistant Executive Engineer. The appellants have been issued with the certificate by the Competent Authorities of PWD of Gulbarga District to the effect that the area in possession of the appellants-companies for the purpose of installation of cement factory and its limestone quarry is a cement factory area. From the year 1980, the appellants are enjoying the exemption of payment of Motor Vehicles Tax to the EMEs held by the appellants. However, the State Government by its notification dated 7-12-2000 withdrew the said exemption granted earlier and from 7-12-2000 the appellants are liable to pay the motor vehicles tax on all vehicles owned by them including the EMEs owned by the appellants. Subsequently, the second respondent issued a demand notice demanding the payment of tax due in respect of EMEs owned by the appellants. Subsequently, the second respondent issued a demand notice demanding the payment of tax due in respect of EMEs owned by the appellants. The said demand notice has been questioned before this Hon’ble Court in W.P.No.15131 of 2005 and other connected writ petitions contending that before issuing the demand notice demanding for payment of the motor vehicles tax, the appellants were not heard and the demand notice issued is in violation of principles of natural justice. This Hon’ble Court allowed the writ petitions and directed the appellants to treat the demand notice as show-cause notice and also directed them to file objections to the said show-cause notice, further the second respondent was directed to consider the objections and issue demand notice in accordance with law. In pursuance to the order passed by this Hon’ble Court, the appellants filed objections to the demand notice treating the same as show-cause notice. The second respondent considered the objections and held that the appellants are liable to pay tax. 4. The appellants being aggrieved by the order passed by the second respondent preferred an appeal before the third respondent contending that the EMEs owned by the appellants cannot be treated as motor vehicles within the meaning of Section 2(28) of the Motor Vehicles Act, 1988. The said vehicles are not capable of being used in the public road. Further, the second respondent has no jurisdiction to levy tax in view of the judgment of this Hon’ble Court in R. Pampapathi v Senior Inspector of Motor Vehicles, RTO, Hospet and Others(1996(7) Kar.L.J.625: ILR 1996 Kar.3480). The notification dated 7-1-2000 by which, earlier notification dated 7-12-1980 has been withdrawn cannot override the law declared by the High Court. The Appellate Authority after considering the matter in detail dismissed the appeal filed by the appellants upholding the demand notice issued by the second respondent. 5. The notification dated 7-1-2000 by which, earlier notification dated 7-12-1980 has been withdrawn cannot override the law declared by the High Court. The Appellate Authority after considering the matter in detail dismissed the appeal filed by the appellants upholding the demand notice issued by the second respondent. 5. Being aggrieved by the said order, the appellants filed W.P. No.16188 of 2007 connected with W.P.Nos.16507 of 2007, 8738 and 8739 of 2008 before this Hon’ble Court challenging the same on various grounds and also contending that in view of the law laid by the Hon’ble Supreme Court in the case of Bolani Ores Limited v State of Orissa ( AIR 1975 SC 17 : (1974) 2 SCC 777 ), and in a case in Pampavathi, the respondents have no power to collect the tax only on the ground that the said vehicles have been registered under the Motor Vehicles Act. The learned Single Judge relying upon the judgment in the case of Chief General Manager, Jagannath Area and Others v State of Orissa and Another ( (1996)10 SCC 676 ) and in another case of State of Gujarat and Others v Akhil Gujarat Pravasi V.S. Mahamandal and Others ( AIR 2004 SC 3894 : (2004) 5 SCC 155 : 2004 AIR SCW 3665), held that non-use of the vehicle on the public roads, the petitioners’ liability to pay the tax does not ceases. There is no nexus between the actual use of the vehicle on the road and liability to pay the tax. Relying upon the judgment in Central Coal Fields Limited v State of Orissa and Others ( AIR 1992 SC 1371 : 1992 Supp. (3) SCC 133), held that dumpers and rockers are liable to be taxed. However, liberty has been reserved to the petitioners to challenge the notification dated 7-12-2000 and also to seek for exemption or reduction of the tax in respect of EMEs. 6. Being aggrieved by the order passed by the learned Single Judge in the above writ petitions, the appellants have preferred these appeals. 7. Sri Pramod N. Kathavi, the Advocate appearing for the appellants reiterated the arguments addressed before the learned Single Judge and contended that the demand notice issued by the second respondent which was confirmed by the third respondent and the learned Single Judge is contrary to the law laid down by the Hon’ble Supreme Court. 7. Sri Pramod N. Kathavi, the Advocate appearing for the appellants reiterated the arguments addressed before the learned Single Judge and contended that the demand notice issued by the second respondent which was confirmed by the third respondent and the learned Single Judge is contrary to the law laid down by the Hon’ble Supreme Court. He also submitted that the learned Single Judge has gravely erred in overlooking the provision of Section 2(1)(j) of the Karnataka Motor Vehicles Taxation Act, 1957 while rejecting the contention of the appellants the EMEs in question were not motor vehicles as defined under the provisions of Motor Vehicles Act, 1988. The judgment relied upon by the learned Single Judge are inapplicable to the case of the appellants. He further contended that the conclusion of the learned Single Judge that the appellants are liable to pay tax in respect of EMEs in question in view of the currency of the registration certificates of the EMEs is totally incorrect and without any basis. The currency of registration certificates of the EMEs has no bearing on the liability of the appellants to pay tax in respect of EMEs. The mere registration of these EMEs by the appellants and currency of registration certificates will not render these EMEs liable for the payment of the tax. He further contends that the reasoning of the learned Single Judge is fallacious and contrary to the authoritative pronouncement of the Hon’ble Supreme Court and this Hon’ble Court and sought for setting aside the same by allowing these appeals. 8. On the other hand, Sri M. Kumar, learned Additional Government Advocate for the respondents contended that these EMEs have been treated as motor vehicles and registered under the Motor Vehicles Act. However, the State Government by its notification dated 8-5-1980 in exercise of its power conferred by Section 16(1)(a) of the Karnataka Motor Vehicles Taxation Act, 1957, exempted the tax payable in respect of EMEs subject to certain conditions. Further, the appellants have been complying with the conditions stipulated therein. However, the State Government by its notification dated 7-12-2000 rescinded the earlier notification dated 7-5-1980. Thus when the exemption is withdrawn, the appellants are liable to pay the tax on EMEs. The appellants have not challenged the notification dated 7-12-2000, withdrawing the exemption. In view of the withdrawal of the exemption, the appellants are liable to pay the tax. However, the State Government by its notification dated 7-12-2000 rescinded the earlier notification dated 7-5-1980. Thus when the exemption is withdrawn, the appellants are liable to pay the tax on EMEs. The appellants have not challenged the notification dated 7-12-2000, withdrawing the exemption. In view of the withdrawal of the exemption, the appellants are liable to pay the tax. He also relied upon the judgment of the Hon’ble Supreme Court in the cases of Chief General Manager, Jagannath Area and Central Coal Fields and sought for dismissal of the appeals. 9. We have carefully gone through the arguments addressed by the appellants as well as respondents. 10. It is not in dispute that the appellants have been enjoying the exemption of payment of tax from 8-5-1980. The State Government in exercise of its power under Section 16 (1)(a) of the Karnataka Motor Vehicles Taxation Act, 1957 is of the opinion that it is necessary in the public interest so to do hereby exempt with effect from 1st October, 1967, the tax payable under the said Act in respect of dumpers, rockers, shovels subject to certain conditions. Further, the owners of those vehicles had to use those vehicles within the mining area or the factory premises. The State Government by its notification dated 7-12-2000 rescinded the earlier exemption granted with immediate effect. In view of the withdrawal of earlier notification dated 8-5-1980, the appellants are liable to pay the tax in respect of these EMEs. The appellants are fully aware of the fact that these EMEs are registered under the Motor Vehicles Act and got registration numbers. For all practical purposes these vehicles have been treated as motor vehicles. The State Government has power to levy tax on these vehicles. However, the appellants enjoyed exemption of payment of tax all these years. By the Government notification dated 7-12-2000 that exemption has been withdrawn. In view of that, the appellants are bound to pay the tax. 11. The Hon’ble Supreme Court in a judgment in Chief General Manager, Jagannath Area’s case, clearly held as follows.- “We are unable to persuade ourselves to agree with the submission of the learned Senior Counsel for the petitioner. The Crux of the question is whether the dumper is a motor vehicle and whether the vehicle attracts liability of tax under Section 3 of the Taxation Act? The Crux of the question is whether the dumper is a motor vehicle and whether the vehicle attracts liability of tax under Section 3 of the Taxation Act? The very question came up for consideration before this Court in the case of Central Cool Fields Limited v State of Orissa, wherein the various provisions of the Orissa Motor Vehicles Taxation Act was under consideration and the vehicles which had been taxed under the Taxation Act in the said case were dumpers and rockers. This Court after tracing the legislative history and the decisions of this Court commencing from Bolani Ores Limited v State of Orissa, repelled argument of the mine owners who used dumpers within their mining premises to the effect that the dumpers are vehicles not adapted for use upon roads and, therefore, are outside the scope of the Taxation Act and held that these dumpers run on tyres, in marked contrast to chain plates like caterpillars or military tanks. It was also held that by the use of rubber tyres it is evident that they have been adapted for use on roads, which means they are suitable for being used on public roads and on the mere fact that they are required at places to run at a particular speed is not to detract from the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles make it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the dumpers or rockers as suggested are heavy and cannot move on the roads without damaging them is not to say that they are not suitable for use on roads. The word ‘adapted’ in the provision was read as ‘suitable’ in Bolani Ores case by interpretation on the strength of the language in Entry 57, List II of the Constitution. On the fact situation, therefore, it must be held that dumpers and rockers are vehicles adapted or suitable for use on roads and being motor vehicles per se, were liable to taxation on the footing of their use or kept for use on public roads. On the fact situation, therefore, it must be held that dumpers and rockers are vehicles adapted or suitable for use on roads and being motor vehicles per se, were liable to taxation on the footing of their use or kept for use on public roads. On these facts it is difficult for us to hold that the vehicles are not adapted or suitable or capable of being used on public roads, even though for most of the time they might actually be used within the mining areas on the roads prepared by the mining owners. Following the two earlier judgments of this Court in Central Cool Fields Limited’s case and Union of India and Others v Chowgule and Company Private Limited, AIR 1992 SC 1376 : 1992 Supp. (3) SCC 141, we hold that the dumpers in question are motor vehicles and are taxable within the ambit of the Taxation Act”. 12. In view of the authoritative pronouncement of law by the Hon’ble Supreme Court the appellants had to pay the motor vehicles tax. Apart from that, none of the appellants have challenged the legality and correctness of the Government notification dated 7-12-2000, even though the learned Single Judge had reserved liberty to the appellants to challenge the said notification. Further liberty was also reserved to the appellants to give appropriate representation to the State Government seeking for exemption of payment of tax or reduction of tax in respect of EMEs. 13. We find that there is not irregularity or illegality in the order passed by the learned Single Judge. The learned Single Judge after examining the matter in detail, relying upon various judgments of Hon’ble Supreme Court and this Hon’ble Court passed the order and the same is not liable to be interfered by this Court in an intra-Court appeal. 14. Hence, we pass the following.- ORDER All the appeals are dismissed.