Andhra Pradesh High Court - Amravati
The State Of Ap vs Tarachand Logistic Solutions Limited on 19 December, 2024
Author: R Raghunandan Rao
Bench: R Raghunandan Rao
APHC010332152023 [3446]
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI
WRIT APPEAL NO: 711 of 2023
The State Of AP and Others ...Appellant(s)
Vs.
Tarachand Logistic Solutions Limited ...Respondent
**********
Advocate for Appellants: Government Pleader for Transport Advocate for Respondent: Yashodhan Thakur, representing Ayesha Azma S CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE R RAGHUNANDAN RAO DATE : 19.12.2024 REPORTABLE : YES/NO PER DHIRAJ SINGH THAKUR, CJ :
The present Writ Appeal has been preferred against the judgment and Order dated 13.06.2023, passed in Writ Petition No. 38285 of 2022, whereby the writ petition filed by the respondent petitioner has been allowed and a direction issued to refund an amount of Rs. 22,71,700/- to the petitioner, which was collected in terms of the provisions of Andhra Pradesh Motor Vehicles Taxation Act, 1963 (hereinafter referred to as the 'the Act of 1963'), and in particular Section 3 thereof.2
HCJ & RRR, J W.A. No: 711 of 2023
2. At the outset, it would be apposite to reproduce the provisions of law which have a bearing on the present case. Section 3 of the Act of 1963 reads thus:
"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. (2) The notification issued under sub-section (1) shall specify the class of motor vehicles on which, the rates for the periods at which, and the date from which, the tax shall be levied :Provided that the rates of tax shall not exceed the maximum specified in Column (2) of the First Schedule in respect of the classes of motor vehicles fitted with pneumatic tyres specified in the corresponding entry in Column (1) thereof; and one and a half times the said maximum in respect of such classes of motor vehicles as are fitted with non-pneumatic tyres."
Reference would also be apposite to Rule 12A of the Andhra Pradesh Motor Vehicle Taxation Rules, which have been framed in exercise of the powers conferred under the Act of 1963.
"12-A. Liability for payment of tax in respect of motor 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, of the owner of the vehicle fails to submit the stoppage 3 HCJ & RRR, J W.A. No: 711 of 2023 report within the period specified above but subsequently gives an affidavit with full details to the effect that the vehicle was not 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 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 that the vehicle has not been kept for use. ..."
3. A reference to the aforementioned Rule would make it clear that a motor vehicle would be deemed to be kept for use and liable for tax unless an intimation in writing is given to the licensing officer that the motor vehicle shall not be used after expiry of the period for which tax has already been paid.
The first proviso to the said Rule, however, envisages that if the owner of the non-transport vehicle fails to submit a stoppage report but subsequently proves to the satisfaction of the licensing officer that the vehicle has not been used, it would be deemed that the vehicle has not been 'kept for use'.
4. The Act of 1963 does not define a 'public place'. However, the same has been defined under section 2 (34) of the Motor Vehicles Act 1988, which definition is applicable to the provisions of the Act of 1963, by reference, by virtue of section 2 (j) of the Act of 1963, which envisages that the words and expressions used, but not defined in the Act shall have the meanings assigned to them in the Motor Vehicles Act. 'Public place' according to section 2(34) of the Motor Vehicles Act, 1988, reads thus:
4
HCJ & RRR, J W.A. No: 711 of 2023 "(34) "public place" means a road, street, way or other place, whether a thoroughfare or not, to which the public have a right of access, and includes any place or stand at which passengers are picked up or set down by a stage carriage;"
5. With a view to understand the background in which the present controversy has arisen, it is necessary to state the material facts.
6. The petitioner is a Company engaged in the business of providing logistics support and deployment of heavy lifting equipment which are required for infrastructure and construction projects. A contract came to be awarded to the petitioner for a period of approximately four and a half years for handling and storage of iron and steel material at the Central Dispatch Yard situate inside the Vishakhapatnam steel plant, which is a corporate entity of Rashtriya Ispat Nigam Limited (RINL).
7. The petitioner claims that it deployed approximately 36 vehicles in furtherance of the terms and conditions of the contract executed between it and the Vishakhapatnam Steel Plant for plying the same inside the Central Dispatch Yard (CDY) at Vishakhapatnam. The petitioner's case was that even when the aforesaid motor vehicles were being plied on public roads earlier, for which the requisite tax was paid to the concerned authorities, upon deploying the said vehicles to the CDY premises with effect from 01.4.2021, the motor vehicles had stopped plying upon the public roads and were used exclusively 5 HCJ & RRR, J W.A. No: 711 of 2023 for the purposes of the contract inside the CDY premises and did not leave the compound at any point of time till the end of the contract for any other use.
8. The petitioner claimed that by letters, dated 07.12.2020 and 05.10.2021, the Transport Department of the state of Andhra Pradesh had been intimated regarding the non-use of the motor vehicles on public roads and further requested that the said vehicles be exempted from payment of tax till the period of contract entered into with the Vishakhapatnam steel plant.
9. The petitioner claims that without considering the representation of the petitioner, demands were raised on account of tax in terms of the Act of 1963. The petitioner claims that a total amount of Rs. 22,71,700/- was paid towards motor vehicle tax to the appellants, even when no such amount was payable.
10. The petitioner then filed writ petition No. 6206 of 2022, which was disposed of by the order, dated 26.04.2022, with the direction to the authorities to consider the petitioner's letters, dated 07.12.2020 and 05.10.2021. The representations were then considered and rejected by virtue of order, dated 25.05.2022. An appeal was then preferred by the petitioner before the Deputy Transport Commissioner, who finally dismissed the same by order, dated 27.08.2022.
11. The grounds on which the appeal was dismissed were that the petitioner had been operating its vehicles at the premises of Vishakhapatnam 6 HCJ & RRR, J W.A. No: 711 of 2023 steel plant during the relevant period and further that Rule 12A of the motor vehicle taxation rules contemplated that the motor vehicles shall not be used at all. Further, it was held that the registered owner had not filed the stoppage/non-use intimation to the licensing officer in terms of rule 12A.
12. The said decision was then challenged by the petitioner by way of writ petition, which was allowed by virtue of the judgment and order which is impugned in the present writ appeal.
13. The learned single Judge held that since the vehicles in question were being plied within the premises of the Vishakhapatnam steel plant in their central deposit yard, which was a restricted area with no access to an ordinary member of the public, the petitioner was not liable to pay the tax in terms of the Act and the Rules Supra. Reliance in this regard was also placed, inter alia, upon the judgment rendered by the Apex Court in Travancore Tea Estates Co. Ltd. v. State of Kerala1, the judgment rendered by the Bombay High Court in Tata Motors Ltd. v. Dy. Regional Transport Officer2, and the judgment of the Madras High Court in Neyveli Lignite Corporation Ltd. v. Government of Tamilnadu3.
14. In the present writ appeal, learned counsel for the appellant urged that the view expressed by the learned single Judge was unsustainable in law 1 (1980) 3 SCC 619 2 2010 SCC OnLine Bom 388 3 2005 SCC OnLine Mad 693 7 HCJ & RRR, J W.A. No: 711 of 2023 inasmuch as the vehicles were admittedly being plied and the operations of such vehicles had not been totally stopped, which would have otherwise enabled the petitioner to claim exemption of the tax payable under the Act. It was stated that the petitioner had not filed any non-use intimation with the authority which was a prerequisite under Rule 12A of the AP Motor Vehicle Taxation Rules, 1963.
15. Counsel for the respondent, on the other hand, submits that the view expressed by the learned single judge warrants no interference. Overwhelming reliance was placed on the judgment of the Apex Court in Bolani Ores Ltd. v. State of Orissa4.
16. The issue that falls for our consideration is whether the petitioner is liable to be taxed in terms of the charging Section 3 or not.
17. The case of the petitioner is that since Section 3 is attracted only when the vehicle is to be used in a public place in the State and since the vehicles were not being used in a public place in the state of Andhra Pradesh but within the premises of Vishakhapatnam steel plant, which is not a public place and entry wherein is restricted, Section 3 does not apply.
18. The power to tax vehicles as contained in Section 3 of the Act of 1963 is traceable to Entry 57, of List II of the Seventh Schedule, which 4 (1974) 2 SCC 777 8 HCJ & RRR, J W.A. No: 711 of 2023 envisages' taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III'.
19. In Bolani Ores Ltd.(supra), one of the issues that fell for consideration before the Apex Court was whether dumpers, rockers and tractairs were motor vehicles within the meaning of the relevant State motor vehicle Taxation Acts and whether they were accordingly taxable thereunder. The case set up by Bolani Ores was that these machines which were used in mining operations in the area leased out to them were not liable for registration under Section 22 of the Motor Vehicles Act and, therefore, could not be taxed under section 6 of the Bihar and Orissa Motor Vehicles Taxation Act, 1930.
The Apex Court returned a finding that dumpers and rockers were motor vehicles and could be driven by persons holding a valid license.
But while dealing with a connected question as to whether the vehicles though registrable under the Act were also exigible for payment of tax under the Taxation Act, the Apex Court held thus:
"29. ...We have already stated what these purposes are and having regard to them the registration of a motor vehicle does not automatically make it liable for taxation under the Taxation Act. The Taxation Act is a regulatory measure imposing compensatory taxes for the purpose of raising revenue to meet the expenditure for making roads, maintaining them and for facilitating the movement and regulation of traffic. The validity of the taxing power under Entry 57 List II of the Seventh Schedule read with Article 9 HCJ & RRR, J W.A. No: 711 of 2023 301 of the Constitution depends upon the regulatory and compensatory nature of the taxes. It is not the purpose of the Taxation Act to levy taxes on vehicles which do not use the roads or in any way form part of flow of traffic on the roads which is required to be regulated. The regulations under the Motor Vehicles Act for registration and prohibition of certain categories of vehicles being driven by persons who have no driving licence, even though those vehicles are not plying on the roads, are designed to ensure the safety of passengers and goods etc. etc. and for that purpose it is enacted to keep control and check on the vehicles. Legislative power under Entry 35 of List III (Concurrent List) does not bar such a provision. But Entry 57 of List II is subject to the limitations referred to above, namely, that the power of taxation thereunder cannot exceed the compensatory nature which must have some nexus with the vehicles using the roads viz. public roads. If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed. This very concept is embodied in the provisions of Section 7 of the Taxation Act as also the relevant sections in the Taxation Acts of other States, namely, that where a motor vehicle is not using the roads and it is declared that it will not use the roads for any quarter or quarters of a year or for any particular year or years, no tax is leviable thereon and if any tax has been paid for any quarter during which it is not proposed to use the motor vehicle on the road, the tax for that quarter is refundable."
20. It needs to be noticed that what was being considered by the Apex Court in Bolani Ores(supra) was in the context of the unamended definition of a "motor vehicle" as was then defined under Section 2(18) of the Motor Vehicles Act, 1939, which was made applicable, by reference, by the State taxation Act. The Apex Court examined the definitions of 'motor vehicle' before and after the amendment by Act 100 of 1956, which read as under:
Section 2(18) before amendment: Section 2(18) after amendment by Act 100 of 1956:
"motor vehicle" means any "motor vehicle" means any mechanically propelled vehicle adapted mechanically propelled vehicle adapted 10 HCJ & RRR, J W.A. No: 711 of 2023 for use upon roads whether the power for use upon roads whether the power of propulsion is transmitted thereto from of propulsion is transmitted thereto from an external or internal source and an external or internal source and includes a chassis to which a body has includes a chassis to which a body has not been attached and a trailer; but not been attached and a trailer; but does not include a vehicle running upon does not include a vehicle running upon fixed rails or used solely upon the fixed rails or a vehicle of a special type premises of the owner. adapted for use only in a factory or in any other enclosed premises.
21. Finally, the Apex Court, after holding that the unamended definition of Section 2(18) would be applicable, held:
"38. ...it is held that dumpers and rockers though registrable under the Act are not taxable under the Taxation Act as long as they are working solely within the premises of the respective owners."
22. In the instant case, it can be seen that Section 2(28) of the Motor Vehicles Act, 1988, envisages a motor vehicle or vehicle to mean any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source, but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimeters.
23. In the present case, admittedly the vehicles in question are not specially adapted for use only in a factory or in any other enclosed premises but are motor vehicles which are duly registered and can be plied on roads, as 11 HCJ & RRR, J W.A. No: 711 of 2023 is the case of the petitioner that such vehicles were in the past plied on roads for which the appropriate tax was paid under the Taxation Act of 1963.
24. In Travancore Tea Estates Co. Ltd.(supra), the Apex Court was considering the provisions of the Kerala Motor Vehicle Taxation Act of 1963, which provided levy of tax on all motor vehicles used or kept for use in the State. The Travancore Tea Estate company owned 17 motor vehicles, tractors, trailers and lorries, etc., all of which were registered in the company's name under the Motor Vehicles Act. The company claimed that since the vehicles were being used for agricultural purposes on private roads in the estates owned by the company, it was not liable to pay tax under the Kerala Motor Vehicles Taxation Act, 1963.
25. The issue was considered at the High Court stage by the learned single Judge, who held that the tax was leviable by the State in respect of all motor vehicles used or kept for use in the state irrespective of any question as to whether or not such vehicles were used on public roads. In appeal, the Division Bench upheld the view expressed by the learned single Judge. The Apex Court held that if the vehicles were suitable for use on public roads, they were liable to be taxed. It was also held that if a motor vehicle carried a certificate of registration which was current, it would be deemed to be used or kept for use in the State. This would safeguard the revenue of the State by 12 HCJ & RRR, J W.A. No: 711 of 2023 relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the state. The Apex Court held:
"6. 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 Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II. If the vehicles are suitable for use on public roads they are liable to be taxed. In order to levy a tax on vehicles used or kept for use on public roads of the State and at the same time to avoid evasion of tax the legislature has prescribed the procedure. Sub-section (2) of Section 3 provides that the registered owner or any person having possession of or control of a motor vehicle of which a certificate of registration is current shall for the purpose of this Act be deemed to use or keep such vehicles for use in the State except during any period for which the Regional Transport Authority has certified in the prescribed manner that the motor vehicle has not been used or kept for use. Under this sub-section there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State. This provision safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State. At the same time the interest of the bona fide owner is safeguarded by enabling him to claim and obtain a certificate of non-user from the prescribed authority. In order to enable the owner of the vehicle or the person who is in possession or in control of the motor vehicle of which the certificate of registration is current to claim exemption from tax he should get a certificate in the prescribed manner from the Regional Transport Officer.
7. Section 5 of the Act provides for exemption from payment of tax under certain circumstances. It enables the registered owner or the person having possession or control of such vehicle to give previous intimation in writing to the RTO that the vehicle would not be used for such period and at the same time surrender certificate of registration and permit of the vehicle. Section 6 enables the registered owner or a person in possession or control of such a vehicle to get 13 HCJ & RRR, J W.A. No: 711 of 2023 refund of tax if conditions specified in Section 6 are satisfied. Thus in order to enable the registered owner or person in possession or control of a vehicle to get exemption of tax, advance intimation to the RTO along with the surrender of certificate of registration is necessary. The provision of Section 3, sub-section (2) as well as Section 5 and Section 6 are meant to prevent evasion of tax and to provide for exemption from tax in proper cases. Though the purpose of the Act is to tax vehicles that are used or kept for use on the public roads of the State, the State is entitled for the purpose of safeguarding the revenues of the State and to prevent evasion of the tax to enact a provision like provision as in Section 3 raising a presumption that the vehicle is used or kept for use in the State without any further proof unless exemption is claimed under Section 3(2), Section 5 and Section 6. It may be observed that reading Sections 3, 5 and 6 it is clear that a levy of tax is contemplated only on the vehicles that are used or kept for the use on the public roads of the State."
26. A reading of the aforementioned judgment rendered in the context of the provisions of the Kerala Act shows that the Apex Court was satisfied that while safeguarding the interest of the revenue of the State, even the interests of the vehicle owners were protected, who could obtain a certificate of non-user from the prescribed authority in terms of Section 5 of the said Act. A registered owner, having possession or control of such vehicle, could give previous intimation in writing to the RTO that the vehicle would not be used for a particular period, which would then enable him to get a refund of tax if the conditions specified in Section 6 of the Act were satisfied. It will not be out of place here to mention that in Travancore Tea Estates (supra), the Apex Court did observe in the light of the provisions of Section 3, 5 and 6 of the 14 HCJ & RRR, J W.A. No: 711 of 2023 Kerala Taxation Act, that a levy of tax was contemplated only on the vehicles that were used or kept for the use on the public roads of the state.
27. In State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal5, a two-Judge bench of the Apex Court held that the observations made by the Apex Court in Bolani Ores(supra) were made in the context of the machinery, which was used for mining operations within the leased area which did not form a part of the flow of traffic on the roads and that the Court did not hold as a proposition that the period a vehicle is not used on the roads it cannot be taxed.
"19. ...The observation aforesaid was made in the context of the machinery which was used for mining operation within the leased area which obviously did not form part of the flow of traffic on the roads. The Court was not called upon to answer the question posed here, namely, whether a normal motor vehicle cannot be taxed for the period during which it is kept for use but is actually not operating. The Court did not hold as a proposition of law that for the period a vehicle is not used on the roads, it cannot be taxed."
28. The Apex Court in the aforementioned judgment was considering the judgment rendered by the Gujarat High Court, in the context of the provisions of the Bombay Motor Vehicles Tax Act, 1958, as amended by the Gujarat Act 9 of 2002 whereby a writ of mandamus was issued to the State 5 (2004) 5 SCC 155 15 HCJ & RRR, J W.A. No: 711 of 2023 authorities not to recover any tax in terms of the provisions of the said Act 1958 r/w the Rules of 1959 from the vehicles of the petitioners before the High Court, which were kept but were not being used. A direction was also issued to the State to grant refund of the tax already recovered from the petitioner.
29. The Apex Court went on to hold that the tax under Entry 57 was leviable by the State Legislature on all vehicles "suitable for use on roads", which are kept in the State and that there was no correlation with the actual period of user of such vehicles or whether they were in use or used occasionally or for a short duration only. It was held:
"13. ...The tax under Entry 57 is leviable by the State Legislature on all vehicles "suitable for use on roads" which are kept in the State. The tax is compensatory in nature and, therefore, must have some nexus with the vehicles using the public roads of the State. The words "suitable for use" signify the kind of vehicles meaning thereby that the vehicles should be such type which are normally capable of running on the road. The entry does not indicate in any manner that tax would be leviable only for the period when the vehicle is actually using the road and not otherwise and, therefore, it has no correlation with the actual period of use. Naturally the State has to maintain the roads and to keep them in proper condition for all those who own vehicles suitable for use on roads. This is irrespective of the fact whether they use it or not or use it occasionally or for short duration only. It being a tax and not a fee (as understood in the conservative sense), the actual use of the public roads of the State cannot be insisted upon for incurring the liability."16
HCJ & RRR, J W.A. No: 711 of 2023
30. The judgment of Travancore Tea Estates Co. Ltd (supra) was also noticed in the judgment rendered in the case of Akhil Gujarat Pravasi(supra).
31. The learned single Judge in the judgment and order impugned based the decision primarily on the fact that the vehicles were plying only inside the central deposit yard, that they did not leave the compound of the yard at any period of time and therefore were entitled to get the exemption as contemplated in the Act and the rules framed thereunder. It was held that since the CDY was a restricted area where no ordinary member of the public would have any access, the definition of public place under Section 2(34) of the Act would not be applicable to the said yard.
32. In our opinion, the view expressed by the learned single Judge is not totally in consonance with the mandate and spirit of the judgment rendered in the case of Akhil Gujarat Pravasi (supra). This judgment specifically mandates that irrespective of whether a vehicle is in use or is not in use or is in use occasionally or for a short duration, the tax would be leviable. It has been held that there is a presumption that wherever a certificate of registration is current, it shall be deemed that such a vehicle is to be used or kept for use in the State.
33. In the instant case, Rule 12A of the Andhra Pradesh Motor Vehicle Taxation Rules, 1963, also envisages a deeming provision, which specifically 17 HCJ & RRR, J W.A. No: 711 of 2023 provides that a motor vehicle shall be deemed to be kept for use and liable to tax unless the registered owner or a person having possession or control of the motor vehicle intimates in writing to the licensing authority before the commencement of the quarter for which the tax is due, that the motor vehicle shall not be used after expiry of the period for which the tax has already been paid.
34. On a conspectus of the constitutional provisions as contained in Entry 57 of List II of the Seventh Schedule, the judgments above and the provisions of the Act of 1963 and the Rules framed thereunder, it, therefore, is clear that the liability to pay tax, which is compensatory in character on account of the obligation of the State to maintain the roads and to make such roads fit for user by all vehicle owners, who own vehicles, '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 not 18 HCJ & RRR, J W.A. No: 711 of 2023 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 specifically envisages a total stoppage of the user of the vehicle liable to be taxed, in our opinion, is without merit.
In view of the above, the present Writ Appeal is allowed and the judgment and order impugned is set aside. No Costs.
Pending miscellaneous applications, if any, shall stand closed.
DHIRAJ SINGH THAKUR, CJ R. RAGHUNANDAN RAO,J akn 19 HCJ & RRR, J W.A. No: 711 of 2023 HON'BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON'BLE MR. JUSTICE R. RAGHUNANDAN RAO Writ Appeal No: 711 of 2023 DATE : 19.12.2024 AKN