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Madhya Pradesh High Court · body

2017 DIGILAW 1144 (MP)

Puspraj Singh Baghel v. State of M. P.

2017-11-09

HEMANT GUPTA, VIJAY KUMAR SHUKLA

body2017
JUDGMENT : HEMANT GUPTA, CJ. The challenge in the present writ petition is to the legality of sub-sections (1) and (2) of section 3 of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991 (for short “the State Act”) on the ground that they are contrary to the provisions of section 56 of the Motor Vehicles Act, 1987 (for short “the Central Act”). The impugned sub-sections (1) and (2) of section 3 of the State Act, read as under:— “3. Levy of tax on Motor Vehicles. — (1) A tax shall be levied on every motor vehicle used or kept for use in the State at the rate specified in the First Schedule: Provided that the lifetime tax on every motor vehicle shall be levied at the rates specified in the second Schedule: Provided further that in respect of a motor vehicle passing through the State from a manufacturer to a dealer under a temporary certificate of registration for a period not exceeding one month, the rate of tax shall be one third of the tax payable for a quarter. (2) A Transport vehicle of which the certificate of registration is current, shall, for the purposes of this Act, be presumed to have been in use or kept for use, notwithstanding the expiry of the certificate of fitness in case of such transport vehicle.” 2. The argument of the learned counsel for the petitioner is that a vehicle, which does not have a valid certificate of fitness, cannot be taxed at the rates specified in the second Schedule of the State Act, as such vehicle cannot be plied on the road in absence of a fitness certificate. Reliance is placed upon the judgment of the Supreme Court reported as 2006 MPLJ Online (S.C.) 18 : (2006) 8 SCC 613, Hardev Motor Transport v. State of M.P. wherein it has been held as under:— “16. Tax imposed on motor vehicles in terms of the provisions of the 1991 Act is a regulatory one. It was so held in Bolani Ores Ltd. v. State of Orissa, (1974) 2 SCC 777 (SCC p. 794, para 29) stating: “If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed.” 17. It was so held in Bolani Ores Ltd. v. State of Orissa, (1974) 2 SCC 777 (SCC p. 794, para 29) stating: “If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed.” 17. We may, however, hasten to add that even if a vehicle is roadworthy and can be plied on a road, a tax may be imposed, but if a vehicle is not capable of being plied on the road, no tax would be leviable.” 3. Before we consider the argument raised by the learned counsel for the petitioner, certain provisions of the Central Act, are required to be taken into consideration, which read as under:— “53. Suspension of registration. — (1) If any registering authority or other prescribed authority has reason to believe that any motor vehicle within its jurisdiction— (a) is in such a condition that its use in a public place would constitute a danger to the public, or that it fails to comply with the requirements of this Act or of the rules made there under, or (b) has been, or is being, used for hire or reward without a valid permit for being used as such, the authority may, after giving the owner an opportunity of making any representation he may wish to make (by sending to the owner a notice by registered post acknowledgment due at his address entered in the certificate of registration), for reasons to be recorded in writing, suspend the certificate of registration of the vehicle— (i) in any case falling under clause (a), until the defects are rectified to its satisfaction; and (ii) in any case falling under clause (b), for a period not exceeding four months. ********* 55. Cancellation of registration. — (1) If a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner shall, within fourteen days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward to that authority the certificate of registration of the vehicle. 56. Certificate of fitness of transport vehicles. 56. Certificate of fitness of transport vehicles. — (1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorized testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder: Provided that where the prescribed authority or the “authorized testing station” refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal. ********* 65. Power of the State Government to make rules. — (1) A State Government may make rules for the purpose of carrying into effect the provisions of this Chapter other than the matters specified in section 64. (2) Without prejudice to the generality of the foregoing power, such rules may provide for— ********* (d) the issue or renewal of certificates of registration and fitness and duplicates of such certificates to replace the certificates lost, destroyed or mutilated; (e) the production of certificates of registration before the registering authority for the revision of entries therein of particulars relating to the gross vehicle weight; ********* (1) the extension of the validity of certificate of fitness pending consideration of applications for their renewal; ********* 4. The question: as to whether in absence of fitness certificate, the levy of tax under the State Act is legal and valid has been considered by a Division Bench of this Court in Writ Petition No. 14557/2017, Rajesh Kumar Miglani v. State of M.P. decided on 3-10-2017 [2017 MPLJ Online 11] wherein challenge was to sub-rule (2) of Rule 48 of the M.P. Motor Vehicles Rules, 1994. Such Rule contemplated that a fitness application for vehicle shall be accompanied with a tax clearance certificate. Considering the provisions of section 65 of the Central Act, it was held as under:— “12. Section 65(2)(d) of the Act of 1988 (Central Act) empowers the State Government to frame the Rules regarding grant of fitness certificate. In exercise of such power, the State Government has notified the Rules of 1994, which deal with the procedure of issuance of fitness certificate. Section 65(2)(d) of the Act of 1988 (Central Act) empowers the State Government to frame the Rules regarding grant of fitness certificate. In exercise of such power, the State Government has notified the Rules of 1994, which deal with the procedure of issuance of fitness certificate. The payment of tax is made conditional for issuance of the fitness certificate for the reason that a defaulter of payment of tax should not be issued fitness certificate in respect of every vehicle so as to ensure due compliance of the statutory provisions. We find that the issue of fitness certificate and payment of tax falls within the legislative competence of the State in terms of section 65(2)(d) of the Act of 1988 and under section 3 of the 1991 Act. Therefore, Sub-Rule (2) of Rule 48 of the Rules of 1994 contemplating that no dues certificate shall be required for grant of fitness certificate, cannot be said to be beyond the legislative competence of the State Government. The Central Legislation does not contemplate the grant of fitness certificate or the condition thereof. They have been left to be framed by the State Government; therefore, condition imposed of payment of tax before grant of fitness certificate is in larger public interest to ensure that tax dues are paid by the transporters. 15. In view of the foregoing analysis of the provisions of the Act and the Rules made thereunder and the law laid down by the Supreme Court, the condition that an application for issue or renewal of certificate of fitness shall be accompanied with a tax clearance certificate in Form M.P.M.V.R.-23 (TCC) is not inconsistent with any provision of the Central Act (Act of 1988), therefore, the offending clause i.e. sub-rule (2) of Rule 48 of the Rules of 1994 cannot be said to be illegal or beyond the legislative competence of the State.” 5. In Hardev Motor Transport's case (supra), the challenge was to the detention of the vehicles for the reason that the same were being plied as stage carriages without any permit. It was held as under:— “29. Section 3 of the 1991 Act is the charging section. It provides that the tax shall be levied on every motor vehicle used or kept for use in the State at the rates specified in the First Schedule. The levy of tax, therefore, is on the motor vehicles. It was held as under:— “29. Section 3 of the 1991 Act is the charging section. It provides that the tax shall be levied on every motor vehicle used or kept for use in the State at the rates specified in the First Schedule. The levy of tax, therefore, is on the motor vehicles. Its rate may vary keeping in view its use or the nature thereof. However, the use of a motor vehicle so far as public service vehicles are concerned would depend upon the nature of permit held by it. It is not in dispute that appellants herein have been granted permit for plying their buses as contract carriage. Allegation against this is that they have been violating the terms and conditions of the permit by plying their vehicles as stage carriage. It is, however, not in dispute that the rate of tax of a contract carriage permit is more than the stage carriage permit. Clause (g) of Entry IV specifies the rate of tax of motor vehicle plying without permit at the rate of Rs. 1500/- per seat per month. 32. We have noticed that the Constitution Bench categorically states that compensatory tax cannot be progressive. We have furthermore noticed that, according to the Constitution Bench, imposition of tax cannot be a term or condition of a licence. If a permit has been granted, the holder of a permit is liable to comply with the conditions of permit. If he violates the terms and conditions of permit, law will take its own course. A permit is granted under the 1988 Act. If there is violation of the terms of permit, the consequences therefor, shall ensue as contained in section 192-A of the 1988 Act. A distinction must be borne in mind that a tax cannot be imposed by way of penalty although penalty can be imposed for non-payment of tax or evasion of tax. The State may make suitable legislations in this behalf. But the same would not mean that while specifying a rate of tax, the executive Government of the State can indirectly levy a penalty which it cannot do directly.” 6. The said judgment is not helpful to the arguments raised by the learned counsel for the petitioner as it was a case of claim of penalty for the reason that the vehicles were being plied without any permit. The said judgment is not helpful to the arguments raised by the learned counsel for the petitioner as it was a case of claim of penalty for the reason that the vehicles were being plied without any permit. But, in the present case, the argument is that in absence of fitness certificate, the vehicle cannot be plied, therefore, there cannot be any liability to pay tax under the State Act. Section 56 of the Central Act contemplates that a transport vehicle shall not be deemed to be validly registered for the purposes of section 39 unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government. The issuance of registration certificate is dependent upon fitness certificate to be issued in respect of the vehicle in question but once the vehicle is registered, section 56 does not lead to the consequence that the registration certificate is deemed to be cancelled or it becomes ineffective for the reason that the fitness certificate ceased to be valid for any reason. Once the vehicle is registered, the registration certificate can be suspended in terms of section 53 or cancelled under section 55 of the Central Act but there is no deemed cancellation of registration for not possessing the fitness certificate. 7. The levy of tax is not only on a vehicle, which is used but also on a vehicle which is kept for use in terms of section 3 of the State Act. Therefore, in absence of fitness certificate even if the vehicle cannot be put to use for want of fitness certificate but that does not absolve the liability of an owner of the vehicle to pay tax under the State Act, as it is kept for use. Sub-section (2) of section 3 of the State Act raises a statutory presumption that if the certificate of registration is valid then the transport vehicle is presumed to be in use or kept for use notwithstanding the expiry of the certificate of fitness. Therefore, once a statutory presumption has been raised in respect of a transport vehicle in use or kept for use, the same cannot be disputed only for the reason that in absence of fitness certificate, the owner of the vehicle is absolved to pay the tax under the State Act. 8. Therefore, once a statutory presumption has been raised in respect of a transport vehicle in use or kept for use, the same cannot be disputed only for the reason that in absence of fitness certificate, the owner of the vehicle is absolved to pay the tax under the State Act. 8. In view of the above, we do not find any merit in the present writ petition. The same is dismissed.