Madras High Court
N.S. Tourist, Rep By Partner K.R. Suresh ... vs The State Of Tamil Nadu, By Secretary ... on 28 August, 2001
ORDER P. Shanmugam, J.
1. All these petitioners have sought for similar reliefs namely a direction to the respondents to accent the authorisation to operate in Tamil Nadu granted to the petitioners by the State Transport Authority, Thiruvananthapuram in respect of their vehicles and a direction not to insist on payment of more than Rs. 12,000 as composite fee for their vehicles.
2. Petitioners are recognised Tourist Operators plying their buses in the states of Karnataka, Tamil Nadu and Kerala. They have applied for the issuance of authorisation., under Rule 14(1) of the All India Permit for Tourist Transport Operators Rules, 1993 before the State Transport Authority, Trivandrum, Kerala State. The said authority, by their proceedings, granted authorisation for the states of Karnataka and Tamil Nadu subject to payment of tax due to the concerned states. The said proceeding make's it clear that the states of Tamil Nadu and Karnataka have already withdrawn the scheme of authorisation under concessional rates. The respondents are demanding Quarterly tax of about Rs. 70,000 and odd instead of a composite tax of Rs. 12,000. Contending that the respondents have no authority to demand quarterly tax and that they are to be directed to collect only the authorisation Fee of Rs. 12,000, the above writ petitions have been filed.
3. The contention of the learned counsel for the petitioners is that once a certification of recognition has been issued under the All India Permit for Tourist Operators Rules 1993, respondents 3 and 4 have no authority to demand tax in excess of Rs. 12,000 and their action is violative of the right of the petitioners guaranteed under Article 19(1)(g) of the Constitution of India.
4. Learned Special Government Pleader, taking notice on behalf of the respondents, submits that the authorisation certificate issued by the Transport Authority, Kerala has clearly recognised the stand of the state of Tamil Nadu and that once the state of Tamil Nadu is not in the scheme of issuing authorisation under concessional rate, petitioners cannot insist that they will pay only a concessional rate of tax. Petitioners, with the full knowledge, have obtained the authorisation certificate and the certificate itself states so. Having obtained such a certificate, they are estopped from demanding a concessional rate of tax in the state of Tamil Nadu. The Special Government Pleader also produced a copy of the notification made In G.O.Ms. No. 1122, Home (Transport A) Department dated 10.7.1992, which states as follows :
"In exercise of the powers conferred by clause (1) of Section 20 of the Tamil Nadu Motor Vehicles Taxation Act. 1974 (Tamil Nadu Act 13 of 1974), the Governor of Tamil Nadu hereby makes reduction in rate of the tax payable under the said Act, with effect on and from the 7th November 1990. In respect of tourist vehicles granted permits under Sub-section (9) of Section 88 of the Motor Vehicles Act, 1988 (Central Act 59 of 1988) by the authorities of any State other than the State of Tamil Nadu at the rate specified in column (2) of the Table below for the period of use specified in the corresponding entries in column (1) thereof:-
The Table Period of Use Tax Payable
(i) Not exceeding seven days A sum equivalent to one tenth of the quarterly tax specified in the first schedule of the Tamil Nadu Motor Vehicles Taxation Act, 1974 (Tamil Nadu Act 13 of 1974)
(ii) Exceeding seven days but not exceeding thirty days A Sum equivalent to one third the quarterly tax specified in the first schedule to the Tamil Nadu Motor Vehicles Taxation Act, 1974 (Tamil Nadu Act 13 of 1974)
(iii) Exceeding thirty days but not exceeding ninety days.
A sum equivalent to the quarterly tax specified in the first schedule to the Tamil Nadu Motor Vehicles Taxation Act, 1974 (Tamil Nadu Act 13 of 1974) The tax shall be paid on entering the State of Tamil Nadu at the nearest check post or any office of the Transport Department competent to receive the tax;
Provided that failure to pay the tax shall entail the payment of a penalty equal to the amount of tax payable, besides the tax due."
Therefore, it follows that every motor vehicle used or kept for use in the state of Tamil Nadu has to pay the tax specified in the Schedule so long as this order is in force and to the extent indicated.
5. The stand of the Government is further made clear by the communication of the Special Commissioner and Transport Commissioner dated 30.6.2000 to the Governments of Kerala, Karnataka, Andhra Pradesh, Pondicherry and Maharashtra. In that communication, they have stated that the Government of Tamil Nadu, after examining the provisions contained in the scheme called "The Motor Vehicles (All India Permit for Tourist Transport Operators) Rules, 1993 and considered that the above scheme will put Tamil Nadu in a disadvantageous position in the matter of revenue and also that tourist vehicles of other states would be misused as regular stage carriers in Tamil Nadu. Hence, the Government of Tamil Nadu is not agreeable to the above scheme. The Secretary to Government, Home Department, Chennai has also informed this to the Secretary to the Government of India, Ministry of Surface Transport, New Delhi in reference to this letter. Therefore, they have requested the other-Governments not to grant authorisation under this scheme to omni buses of their states to ply in Tamil Nadu, since the Government of Tamil Nadu is not agreeable to the scheme. Consequently, the State Transport Authority, Kerala has specifically stated in their order of authorisation that the authorisation was issued subject to the payment of tax due to the state of Tamil Nadu. Hence, the learned Special Government Pleader opposes the relief sought for in these writ petitions.
6. I have heard the counsel for the petitioners and the learned Special Government Pleader and considered the matter carefully.
7. The Motor Vehicles (All India Permit for Tourist Transport Operators) Rules, 1993 were framed by the Central Government in exercise of the powers conferred on it under Section 88 of the Motor Vehicles Act, 1988. Sub-section (9) of Section 88 of the Motor Vehicles Act, 1988 provides for the State Transport Authority of one state to grant permit in respect of tourist vehicles valid for the whole of India or such contiguous states, subject to the provisions of the Motor Vehicles Act, 1988. Sub-section (14) enables the State Government to make rules for carrying out the provisions of Section 88, of the Act. 'Authorisation Certificate' has been defined under Rule 2 as follows:-
"Means a certificate issued by an appropriate authority to a recognised tourist operator authorising him to operate throughout the territory of India or any such continuous state not being less than three in number, including the state in which the permit is issued on recognised tourist circuits, as are specified in the All India Permit for Tourist vehicles granted to him."
The procedure for applying and issuance of authorisation certificate has been laid down under Rule 4. Sub-rule (14) of Section 88 of the Central Act referring to authorisation fee says that the authorisation fee means the annual fee which may be charged by the appropriate authority of State but subject to the payment of taxes or fees- if any, levied by the state concerned. The Government of Tamil Nadu has taken a decision not to agree for the scheme of authorisation to permit the plying of vehicles In three states by one state. According to them, the said scheme will put Tamil Nadu in a disadvantageous position in the matter of revenue and also the tourist vehicles of other states will be misused as regular stage carriers in Tamil Nadu. The said communication was acceded to by the other Governments, especially, the state of Kerala and therefore, while issuing the authorisiation to the petitioners, they have made it clear that Tamil Nadu has since withdrawn the scheme of issuing authorisation, they will not be eligible to receive the concessional rate. They have made it clear that the issue of authorisation is subject to the payment of tax due to the state of Tamil Nadu. As rightly pointed out, the petitioners, having taken the authorisation from the state of Kerala. agreeing to pay the tax due to use state of Tamil Nadu are estopped from demanding a concessional rate of tax for the plying of the vehicles within the territory of Tamil Nadu.
8. The question whether the composite fee prescribed would be enforceable till it is accepted by the State Government, came up for consideration before the High Court of Rajasthan. A learned Judge of the said court, in Punjab Travel Company, Ahmedabad v. Union of India, in an elaborate judgment on this point, has held that the state authorities could not be restrained from charging tax and that the scheme cannot be enforced against the state.
9. Petitioner in that case also claimed to have an authorisation from the other state under the 1993 Central Rules to ply vehicles in the territory of Rajasthan. It was contended that the slate tax could not be levied. It was argued that in order to develop tourism in the country, a separate category of authorisation was allowed throughout the country and a fixed composite fee was recommended to be charged from the vehicles covered by the scheme. It was stated that a meeting convened under the auspices of the Minister of Transport on 24.4.1992 recommended for redefining the term 'authorisation', which provided a fixed composite fee to be charged according to the seating capacity of the vehicle. The state of Rajasthan is bound by the said minutes to charge only a composite fee of Rs. 12,000 per Quarter. On behalf of the state of Rajasthan, it was submitted that their state has not accepted the said recommendations and unless the State Rules are amended giving effect to the said minutes, the question of charging less than the amount provided for under their State Act does not arise. The learned Judge, after considering these arguments in the light of the decisions referred, found that the state cannot be restrained from charging the tax as per their State Act. The learned Judge rejected the claim of promissory estoppel holding that there cannot be a plea of estoppel against a statute and disagreed with the view of the Punjab and Haryana High Court In Indo Canadian Transport Company v. Union Of India, , The learned Judge also refused to accept the request of the petitioner therein to direct the State Government to Implement the scheme holding that the court has no power to issue such a direction to require the Executive to exercise its law making power.
10. The Rajasthan High Court, while dealing this aspect has held as follows :
"4. undoubtedly, the provisions of Section 4 of the Act, 1951 provide for a charging section which is in consonance with the legislative power of the State, as imposing the tax on motor vehicles for passengers or goods is within the competence of the State being a subject-matter of Entries Nos. 56 and 57 of List II of Seventh Schedule of the Constitution. The "transport vehicles", as defined under the Motor Vehicles Act, 1988, cover all transport vehicles plying for hire or reward for carrying passengers or goods irrespective of the fact whether the vehicle is operated on temporary or, on non-temporary permit and whether it is used or kept for use.
5. The 1993 Rules provide for "authorisation certificate", which means a certificate issued by an "appropriate authority" to a recognised tourist transport operator authorising him to operate throughout the territory of India, or in those contiguous State not being less than three in number including the State in which the permit is issued, on recognised tourist circuits as are specified in the All India Permits for a tourist vehicle granted to him.
6. It is difficult to imagine that if the imposition of tax on vehicles is a subject matter of State List, how the Central Government can frame the Rules regarding imposilion of tax in this respect.
7. It is evident from the record that whatever may be the sanctity of the Minutes of meeting dated 24.4.92 (Annexure-4). the State of Rajasthan has not amended the provisions of the Act, 1951. .....
8. More so, as referred to above, there can be no dispute regarding the legal proposition that as the tax on such vehicles is leviable only by the State Government, the Central Government cannot frame the Rules for imposilion of such tax. (Vide Ahmedabad Urban Development Authority v. Sharadkur Jayanlikumar Pasawalla & Co., ). It can merely persuade the State Government to amend its Act/Rules/notification prescribing the said "composite fee" for vehicles covered by the said Scheme. But unless the State accepts it, the concept of composite fee remains unenforceable."
11. I fully concur with the view of the learned Judge and I am of the view that the questions raised by the petitioners herein are answered and covered by the said decision. The Tamil Nadu Motor Vehicles,. Act, 1974 imposes a levy of tax on motor vehicles In the state of Tamil Nadu. Sub-section (3), the charging section says that tax shall be levied on every motor vehicle issued or kept for use in the state of Tamil Nadu at the rate specified in the Schedule. Sub-section (4) provides for payment of tax in the manner prescribed at 'his choice either quarterly, half-yearly or annually. Section 4(2) says that no motor vehicle shall be used or kept for use in the state of Tamil Nadu at any time unless a licence has been obtained by paying the tax. Section 14 provides for penalty for non-payment of tax. Section 18-A provides for detention of the motor vehicle for non-payment of tax. Section 20 of the said Act provides for remissions of tax subject to certain conditions. In exercise of this power, the Government, in G.O. Ms. No. 1122, Home (Transport, A) Department dated 10.7.1992, reduced the rate of tax with effect from 7.11.1990 in respect of tourist vehicles at the rates specified. The order says that if the period of use does not exceed seven days, the temporary permits granted in respect of tourist vehicles need only pay one- tenth, one-third of the quarterly tax specified in the First Schedule and equivalent to the quarterly tax, if it exceeds 90 days. Hence, assuming in favour of the petitioners, it applies only to temporary permits issued for less than 30 days.
12. A learned Judge of this court, in a batch of Writ Petition Nos. 11291 to 11293 etc. of 1992, by a common order dated 11.2.1992, allowed the writ petitions. Petitioners in those writ petitions obtained authorisation to ply in Tamil Nadu as well, as in the neighbouring states. According to them, they had paid tax for periods of seven days, thirty days or ninety days, but they complain that the authorities were insisting upon payment of similar amount of tax as and when the petitioners enter the state of Tamil Nadu again during the period for which the tax has already been paid. It was contended that if tax is paid for any particular period, the vehicle can be used in that state for such period. It was held by this court that once tax is paid for a particular period, it is not open to the authorities to demand tax for any part of that period on the only ground that the vehicle has gone out of the state once or twice and entered the state again during that period. The owner of the vehicle is entitled to enter the state as many times as he wants during the period and use the roads of Tamil Nadu. This judgment in my view, will not apply to the facts of the present case since the petitioners have not paid tax as per G.O.Ms.No. 1122 dated 10.7.1992. In the light of the change of the policy of the Government as set out in their letter dated 30.6.2000, the Government has chosen not to agree to the scheme called the Motor Vehicles All India Permit for Tourist Transport Operators Rules, 1993. The State Government cannot be compelled to accent the scheme which was found to be to their detriment., when the scheme was accepted by the State and was in force in Tamil Nadu, the operators were charged tax as per G.O.Ms. No. 1122 dated 10.7.1992. When the Government has chosen to revert back to the Schedule to the Motor Vehicles Taxation Act, the petitioners cannot insist on the concessional rate of composite tax. This judgment cannot hold good in the light of the change of the policy of the Government, In Ugar Sugar Works Limited v. Delhi Administration, the Supreme Court held that courts shall not enter into the area of testing the Executive policy. Their lordships observed as follows:- "It is well setlled that the courts in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the Executive unless the policy can be faulted' on grounds of malafide, unreasonableness, arbitrariness or unfairness.
13. The levy of motor vehicle tax is made under the Tamil Nadu Motor Vehicles Taxation Act. 1974 and there is a liability for every motor vehicle is used or kept for use in the state of Tamil Nadu to pay the tax. The said provisions have not been challenged. Therefore, the petitioners have no right to demand that they can pay only a compounded tax of Rs. 12,000 per quarter.
14. For all these reasons, the prayer sought for by the petitioners in these writ petitions namely to direct the respondents to accept the authorisation to operate in Tamil Nadu without paying tax under the Tamil Nadu Motor Vehicles Taxation Act cannot be granted. Hence, all the writ; Consequently, the connected W.M.Ps. are closed.