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2015 DIGILAW 252 (AP)

V. Syamala v. State of Telangana

2015-04-10

K.J.SENGUPTA, P.V.SANJAY KUMAR

body2015
ORDER 1. "In this batch of matters, the grievances of all the petitioners are common and identical. They have challenged G.O. Ms. No. 15, Transport, Roads & Buildings (Tr.I) Department, dated 30.03.2015 issued by the State of Telangana, as to its validity and legality. By the impugned Government Order, the State of Telangana has decided and further notified to levy the motor vehicles tax at the specified rates and periods on all the transport vehicles including Contract Carriages, Goods Carriages, Motor Cabs, Maxi Cabs, Commercial Tractor Trailers, Passenger Auto rickshaws entering into the State of Telangana from Andhra Pradesh State, treating them to be as other State Vehicles. The petitioners and each of them are the owners of the State-wide contract carriage buses for which permits are granted by the transport authorities of the undivided State of Andhra Pradesh, which are valid as on today. These permits enable the petitioners' buses to ply over the entire area of the undivided State of Andhra Pradesh. On bifurcation of the erstwhile State of Andhra Pradesh, State of Telangana was formed w.e.f. 2.6.2014, consequent upon such bifurcation the area under districts mentioned in Section 3 of the Andhra Pradesh Reorganization Act, 2014 (hereinafter referred to as 'Act 2014') have become part of the State of Telangana. Under Section 5 of the Act 2014, Hyderabad is to be common capital for both the States of Telangana and the State of Andhra Pradesh, for a period not exceeding ten years. In view of the above status of Hyderabad city, people from different places in the present Andhra Pradesh State have to come to Hyderabad. Under Section 72(2) of the said Act 2014, no tolls, entrance fees or other charges of a like nature shall be levied after the appointed day in respect of any transport vehicle for its operations in any of the successor States under any such permit, if such vehicle was, immediately before that day, exempt from the payment of any such toll, entrance fees or other charges for its operation in the transferred territory. 2. In order to achieve the purpose of Section 5 of Act 2014 and in the public interest, the erstwhile State of Andhra Pradesh issued G.O. Ms. 2. In order to achieve the purpose of Section 5 of Act 2014 and in the public interest, the erstwhile State of Andhra Pradesh issued G.O. Ms. No. 43, Transport, Roads and Buildings (Tr-1) Department, dated 1-6-2014 directing the quarterly tax paid for any quarter upto 31-03-2015 in any of the successor States shall be deemed to have been paid for both the successor States. The respective Governments are directed to decide for the subsequent period. 3. As the State of Telangana was not implementing the aforementioned order and forcibly collecting tax in the State of Telangana, some of the operators filed W.P. No. 21257 of 2014 and batch, and this Court was pleased to pass an interim order dated 30.07.2014 thereon to the effect that the tax already collected by both the States, if any, shall abide by the result of the writ petition. In future as an interim measure, we directed both the States must respect the decision taken on 1.6.2014 and no official shall act contrary thereto. 4. The State of Telangana has adopted the Andhra Pradesh Motor Vehicles Act, 1988, A.P. Motor Vehicles Taxation Act, 1963 and certain laws, rules and notifications issued thereunder. It is stated that the impugned notification is contrary to the provisions of Section 72 of the said Act 2014, as the petitioners' vehicles holding valid permits in undivided State shall be treated to be the vehicles of the Telangana State as well and not of other State vehicles. 5. It is the contention of the petitioners that since they have paid motor vehicles tax in the State of Andhra Pradesh, the Telangana State has no power or jurisdiction to collect and levy the motor vehicles tax insofar as the petitioners' vehicles are concerned. 6. It is asserted that all the transport vehicles, including the petitioners' ones, were exempted from paying the tax in Telangana State and vice versa in terms of G.O. Ms. No. 43, dated 1.6.2014. Hence, Telangana State has no power or jurisdiction to impose motor vehicles tax on the petitioners' vehicles w.e.f. 1.4.2015. The Central Government has not authorized the State Government to levy the same as provided under the first proviso to sub-section (2) of Section 72 of Act 2014. 7. No. 43, dated 1.6.2014. Hence, Telangana State has no power or jurisdiction to impose motor vehicles tax on the petitioners' vehicles w.e.f. 1.4.2015. The Central Government has not authorized the State Government to levy the same as provided under the first proviso to sub-section (2) of Section 72 of Act 2014. 7. Sri E. Manohar, the learned Senior Advocate appearing for the petitioners, while placing the aforesaid factual and legal issues, contends that the petitioners and each of them have been able to make out strong prima facie case as the action of State of Telangana by the impugned G.O. tantamounts to double taxation and further violative of sub-section (2) of Section 72 of Act 2014. He submits that in almost identical situation, the Supreme Court has dealt with the problem in the case of Hansraj and Sons v. State of Jammu and Kashmir and others (2002) 6 SCC 227 : 2002 (5) ALT 27.3 (DN SC) wherein and whereunder this kind of intendment to impose tax was discarded. 8. The learned Advocate General for the State of Telangana says that in exercise of sovereign power the tax has been imposed. He contends that Section 72 of Act 2014 deals with subject of permit and it has nothing to do with the imposition of tax and this provision is a temporary provision and only applicable to existing valid road transport permit. 9. According to him, it is a tax and it is neither a toll nor entrance fee nor other charges. He further submits that mere mention of Hyderabad as being common capital for both the States does not become part of Andhra territory. It will appear from Section 3 of the said Act 2014, Hyderabad is a part and parcel of the State of Telangana and the State of Andhra Pradesh is merely a user of this city. Under these circumstances, the petitioners cannot avoid tax imposed by the State of Telangana. 10. The aforesaid contention of the petitioners, no doubt, in our view clearly establish prima facie case for decision for which we have already admitted the writ petitions for hearing. However, prima facie, we find that the State of Telangana is empowered to levy tax on motor vehicles under Section 3 of A.P. Motor Vehicles Taxation Act, 1963. 10. The aforesaid contention of the petitioners, no doubt, in our view clearly establish prima facie case for decision for which we have already admitted the writ petitions for hearing. However, prima facie, we find that the State of Telangana is empowered to levy tax on motor vehicles under Section 3 of A.P. Motor Vehicles Taxation Act, 1963. There is no dispute at present with regard to such power, however dispute is whether this power can be exercised in view of the provision of sub-section (2) of Section 72of the said Act 2014. 11. We, therefore, set out sub-section (2) of Section 72 of Act 2014 hereunder: 72. Temporary provisions as to continuance of certain existing road transport permits:-- (1)............ (2) No tolls, entrance fees or other charges of a like nature shall be levied after the appointed day in respect of any transport vehicle for its operations in any of the successor States under any such permit, if such vehicle was, immediately before that day, exempt from the payment of any such toll, entrance fees or other charges for its operations in the transferred territory: Provided that the Central Government may, after consultation with the State Government or Governments concerned, authorize the levy of any such toll, entrance fees or other charges, as the case may be: Provided further that the provisions of this sub-section shall not be applicable where any such tolls, entrance fees or other charges of a like nature are leviable for the use of any road or bridge which is constructed or developed for commercial purpose by the State Government, an undertaking of the State Government, a joint undertaking in which the State Government is a shareholder or the private sector. 12. It is settled position of law that tax simpliciter is an impost of sovereign and distinguishable from tolls, entrance fee and other charges. In case of the tax, there cannot be any apparent element of quid pro quo, but in case of tolls, entrance fee and other charges, element of quid pro quo is traceable. 13. We are of the view that in case of motor vehicles tax imposed by the State of Telangana is not a tax simpliciter, it is really levy for user of motorable road provided by the State. We get support apparently from paragraph-18 of the judgment of Apex Court cited by Mr. E. Manohar. 13. We are of the view that in case of motor vehicles tax imposed by the State of Telangana is not a tax simpliciter, it is really levy for user of motorable road provided by the State. We get support apparently from paragraph-18 of the judgment of Apex Court cited by Mr. E. Manohar. Therefore, the element of quid pro quo in levying this tax is obvious as it is sought to be collected for usage of road within the State. However, this has to be decided finally after completion of filing of affidavits as directed earlier. The benefit of exemption indicated in sub-section (2) of Section 72 of the Act 2014, though strongly argued by Mr. E. Manohar, cannot be extended to the petitioners by reason of the fact that it was available till 31st March, 2015 by G.O. Ms. No. 43, dated 1st June, 2014. However this observation and findings are prima facie. After examining prima facie case, we now lean towards aspect of balance of convenience and inconvenience. All the vehicle owners are non-resident of the State and are coming from Andhra Pradesh State. 14. In the event, if we suspend operation of the impugned notification unconditionally, and eventually the writ petitions fail and it will be very difficult to recover the taxes from them. On the other hand, if interim order as prayed for is refused and State of Telangana is allowed to collect tax and in case the writ petitions succeed it will not be difficult to recover the same from the State Government. Under these circumstances, we direct in modification of ad interim order dated 1st April, 2015 all the petitioners shall pay the taxes at the rates demanded and the same shall not be appropriated by the State of Telangana for the time being, and be kept in a separate account by the Commissioner of Transport for the State of Telangana. On such payment being made, indemnity bond shall be returned forthwith, if furnished. This order is passed without prejudice to the rights and contentions of the parties and this collection will be subject to result of these writ petitions. This order however will confine to these batch of the writ petitions. On such payment being made, indemnity bond shall be returned forthwith, if furnished. This order is passed without prejudice to the rights and contentions of the parties and this collection will be subject to result of these writ petitions. This order however will confine to these batch of the writ petitions. W.P.M.P. No. 12138 of 2015 in W.P. No. 9213 of 2015 And W.P.M.P. No. 12161 of 2015 in W.P. No. 9230 of 2015 After this interim order is pronounced, Sri E. Manohar, learned Senior Counsel submits that his clients will pay the motor vehicles tax as demanded in terms of the impugned notification within ten days in due discharge of the indemnity bond. This assurance has been given by Sri E. Manohar, learned Senior Counsel upon taking instructions from his clients. In case of breach of this assurance, legal consequences will follow. W.P.M.P. No. 12162 of 2015 in W.P. No. 9231 of 2015, W.P.M.P. No. 12194 of 2015 in W.P. No. 9259 of 2015, W.P.M.P. No. 12393 of 2015 in W.P. No. 9410 of 2015, W.P.M.P. No. 12419 of 2015 in W.P. No. 9433 of 2015, W.P.M.P. No. 12405 of 2015 in W.P. No. 9421 of 2015, W.P.M.P. No. 12421 of 2015 in W.P. No. 9435 of 2015, W.P.M.P. No. 12431 of 2015 in W.P. No. 9445 of 2015, W.P.M.P. No. 12448 of 2015 in W.P. No. 9462 of 2015, W.P.M.P. No. 12659 of 2015 in W.P. No. 9615 of 2015, W.P.M.P. No. 12713 of 2015 in W.P. No. 9666 of 2015, W.P.M.P. No. 12714 of 2015 in W.P. No. 9667 of 2015 AND W.P.M.P. No. 12757 of 2015 in W.P. No. 9705 of 2015 Learned counsel appearing for the petitioners in these matters also seek ten days time to pay the motor vehicles tax as demanded in terms of the impugned notification in due discharge of the indemnity bond. Accordingly, ten days time is granted to do so.