Andhra HC (Pre-Telangana)
Saleem Tours And Travels vs Joint Transport Commissioner And ... on 28 January, 2000
Equivalent citations: I(2001)ACC160, 2000(4)ALD501, 2000(4)ALT468, AIR 2000 ANDHRA PRADESH 497, (2000) 4 CIVLJ 571, (2000) 4 ANDHLD 501, (2000) 4 ANDH LT 468, (2001) 1 ACC 160, (2000) 2 ANDHWR 46
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
ORDER P. Venkatarama Reddi, J.
1. In all these cases, the vehicles of the petitioners which were having All India tourist permits or State wide contract carriage permits were seized on the allegation that the vehicles were carrying individual passengers picked up at different places and running as stage carriages contrary to the conditions of permit. In some cases, the vehicles covered by motor cab permits were seized on the ground that they were unauthorisedly plying as contract carriages beyond the permitted seating capacity. The petitioners approached the concerned Transport authority for release of the vehicles under Section 207 (2) of the Motor Vehicles Act pursuant to the orders passed by this Court in the earlier writ petitions filed or otherwise. In the first two cases, the Joint Transport Commissioner and Secretary, RTA., Hyderabad ordered release of the vehicles on the following conditions:
"1. The appellant shall give an undertaking that he will not sell, alienate, encumber or hypothecate the vehicle during the pendency of the enquiry.
2. He shall produce the vehicle on every Friday at 11.00 am. before the MVI, RTA, Hyderabad during the pendency of enquiry till the case is disposed of.
3. He shall give a bank guarantee for a sum of Rs.29,475/- valid for a period of 6 months or fill the enquiry is completed.
4. He shall also deposit an amount of Rs.2,500 in cash, which would be refunded if the enquiry results in his favour."
2. The petitioners in the said two writ petitions are mainly aggrieved by the condition directing the bank guarantee to be furnished for the estimated tax. In some other cases, for instance, WP No.26158 of 1999 etc., the petitioners were directed to pay the estimated difference tax and compounding fee "to consider his application for release of the vehicle". In certain other cases, it is the allegation of the petitioners that they were orally directed to pay the estimated differential tax applicable for stage carriage as a condition for release of the vehicle. Hence, the present writ petitions are filed questioning the action of the respondent concerned in not releasing the vehicles unless tax as estimated is paid or bank guarantee is furnished therefor.
3. Initially, the writ petitions came up for hearing before a learned single Judge--Sudershan Reddy, J. The learned Judge formulated the question as follows:
"The short question that arises for consideration is as to when the tax payable becomes due in respect of the motor vehicle. Whether the respondent could seize the vehicle at all for nonpayment of difference of tax on the ground that the vehicles were being used as express stage carriages. It involves interpretation of Section 8 of the Taxation Act read with Section 207 of the MV Act."
4. The learned Judge felt it appropriate and proper to have an authoritative pronouncement of a Division Bench with regard to interpretation of Section 8 of A.P. MV Taxation Act together with Section 207 of MV Act so that 'some broad parameters' are laid down by this Court. That is how the writ petitions are before this Bench.
5. Section 8 of the A.P. MV Taxation Act empowers the prescribed Officer to seize and detain the motor vehicle where any tax due in respect of any motor vehicle has not been paid as specified in Section 4. Section 4 deals with the payment of tax and grant of licence. Section 4 enjoins that the tax levied under the Act shall be paid in advance and in the manner specified in Section 11 either quarterly, half yearly or yearly within 15 days from the commencement of the quarter, half year or year as the case may be. However, the tax levied under proviso to Section 3 (2) shall be for the life time of the motor vehicle and be paid in advance in lumpsum. Subsection (3) of Section 4 provides that where the tax in respect of a motor vehicle is paid for a particular period, the authorised Officer shall grant the licence in the prescribed form to use the motor vehicle in any public place in the State during the said period. Sub-section (5) of Section 4 prohibits the use of motor vehicle in any public place in the State unless a licence permitting its use during such time has been obtained. Section 3 which is the charging section levies tax on a motor vehicle used or kept for use in a public place in the State, the quantum of tax being determinable as per the notifications issued from time to time specifying die class of motor vehicles, the rates and periods for which the tax is payable.
6. In the cases on hand, the tax has been paid and licence obtained under Section 4 as per die intended user of the vehicle. However, during the period in which the licence is in force, it was found on check that the vehicle was being used for a purpose different from the one envisaged at the time of granting licence. In other words, the tax was paid at the rate applicable for the contract carriage of specified description. But, it was found being used as a stage carriage thereby attracting a higher rate of tax. In such a situation, in our view, Section 8 of the Taxation Act is not attracted. The expression 'tax due' occurring in Section 8 and further expression "has not been paid as specified in Section 4" coupled with the language of Section 4 that tax shall be paid in advance and licence be obtained, do not make Section 4 applicable to cases of subsequent misuse of the vehicle. On account of use of the vehicle for a purpose different from that which was contemplated at the time of issuing licence under Section 4, the liability to pay the tax by virtue of charging provision under Section 3 would no doubt arise. But that lability has got to be determined by the competent authority after giving an opportunity of making representation to the owner or other person in control of the vehicle. The checking Officer's endorsement is not the last word on the subject. If any dispute is raised by the registered owner of the vehicle or other person having control of the vehicle, the same shall be decided by the authorised Officer. A factual finding has to be recorded on due application of mind to the explanation of the vehicle owner and moreover in case of an adverse finding, the rate of tax applicable has to be arrived at by the concerned authority. Until this process of determination and ascertainment of liability is completed, it cannot be said that the 'tax due' under the Act in respect of the vehicle has not been paid as per Section 4. The tax was paid in advance and licence has been obtained. But, the subsequent user of vehicle has given rise to additional tax liability. Having regard to the fact that the additional tax liability does not fructify the moment the check takes place, and it would arise only after the quasi judicial process of determination of tax is completed, it cannot be said that the tax 'due' has not been paid on the very date of check and therefore, the vehicle is liable to be seized under Section 8. Section 8 empowers the prescribed Officer to seize and detain the motor vehicle in respect of which the tax is due under this Act and for this purpose take or cause to be taken any steps he may consider necessary for the temporary safe custody of the vehicle, until the tax due in respect of the vehicle, is paid. Extra or additional tax does not become due unless the liability is duly determined and ascertained by resorting to quasi judicial process. In Union of India v. Raman Iron Foundry, AIR 1974 SC 1265, it was observed that "sum due would mean a sum for which there is existing obligation to pay in presenti or in other words which is presently payable. It is also pertinent to mention that the same language (tax due) is used in Section 7 of A.P. MV Taxation Act. Section 7 provides for recovery of tax penalty or tax due under the Act in the same manner as an arrear of land revenue. Before any coercive steps are taken for releasing an arrear of land revenue under A.P. Revenue Recovery Act, the law enjoins that there should be a demand and it is only on nonpayment of the demanded amount, the coercive process can be set in motion. The expression 'tax due' in Section 8 does not bear any different meaning conceptually or otherwise. This interpretation of 'tax due' is in accordance with the view expressed by the Full Bench of this Court in the context of construing a similar expression in Section 6 of the Taxation Act. In Peda Venkaiah v. RTO, Nellore, , it was observed:
"It was only when the Officer held that the carriage was used as a stage carriage and tax was payable on that footing and a demand was made to pay that tax, it can be said that a tax became due.
There was no tax due before such determination and demand".
Distinguishing a case of non-payment of tax applicable to a contract carriage at the beginning of the quarter, the Full Bench observed:
"The position in this case is different. At the beginning of the quarter the petitioner was using it as a contract carriage and he did pay the tax on the footing that it was a contract carriage. It was only later when it was held by the impugned order that he was using it as a stage carriage that it became liable to pay tax for the quarter on the footing that the vehicle was being used as a stage carriage. No tax had become due before that date and hence the facts in this case are distinguishable from the facts in WP No.5528 of 1974."
7. Levy of penalty under Section 6 by the same order in which the tax was levied was therefore quashed. We are therefore of the view that the tax 'due' means tax demanded or tax admittedly or indisputably payable as per Section 3 read with notifications depending on the nature and class of vehicle and the nature of permit issued. In fact, the learned Government Pleader virtually conceded that power of seizure under Section 8 cannot be exercised in a situation with which we are concerned.
8. At the same time, as expressed by the Division Bench in WP No.14331 of 1992, the seizure of the vehicle when it is found to be used for a purpose other than the one for which the permit was granted, can be justified under Section 207 of the Motor Vehicles Act which reads as follows:
"Section 207 of Motor Vehicles Act :
Power to detain vehicles used without certificate of registration permit, etc :--
(1) Any police Officer or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of Section 3 or Section 4 or Section 39 or without the permit required by sub-section (1) of Section 66 or in contravention of any condition ofsuch permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, in the prescribed manner and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe custody of the vehicle :
Provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used in contravention of Section 3 or Section 4 or without the permit required by sub-section (1) of Section 66 he may, instead of seizing the vehicle, seize the certificate of registration of the vehicle and shall issue an acknowledgment in respect thereof."
9. On the formation of reasonable belief that the vehicle was being used without the permit or in contravention of the conditions of the permit including the purpose for which the vehicle may be used, the power of seizure under Section 207 can be invoked. In such a given situation, even if reference is made to Section 8 which as already stated is inapplicable, the seizure order can still be justified under Section 207. That is what the Division Bench had observed in the aforementioned case referred to by our learned brother. In fact, the learned Counsel for the petitioners have no quarrel with the proposition that Section 207 can be invoked in a case where a contract carriage is found to have been misused as a stage carriage. While the learned Counsel for the petitioners have not gone to the extent of advancing the contention that even the initial seizure is illegal, the learned Counsel submit that the petitioners are aggrieved more by the action of the licensing Officer in not releasing the vehicle unless the differential tax is paid or bank guarantee is furnished. In other words, the controversy is of not so much on the question of power to seize, but more on the question of competence of the Officer to insist on the tax payment as a pre-condition for the release of the vehicle. Section 207(2) may be noticed in this context:
"2. Where a motor vehicle has been seized and detained under sub-section (1). the owner or person in charge of the motor vehicle may apply to the transport authority or any Officer authorised in this behalf by the State Government together with the relevant documents for the release of the vehicle and such authority or Officer may, after verification of such documents, by order release the vehicle subject to such conditions as the authority or Officer may deem fit to impose."
10. So read, it is clear that the lawmakers intended that the power of seizure shall not be used indiscriminately and in avoidable situations. Even in a case where a vehicle is being plied without permit, the proviso to sub-section (1) gives a discretion to the competent authority to seize the certificate of registration rather than the vehicle itself. Such discretion is expected to be exercised judiciously. The power of seizure shall not be taken to be a punitive measure, though there is certain element of deterrence in it. The provisions for seizure are introduced in various enactments, firstly to provide a deterrent effect and secondly, to facilitate the finalisation of enquiry and implementation of the orders passed as a result of enquiry. Attempts at circumventing the provisions of the statute are intended to be checked thereby. The seizure cannot be an end in itself; it should be a means to achieve the end. It need not be resorted to merely because there is transgression of law. Whether or not the vehicle should be seized and if so for how long are factors to be decided by the competent authority fairly and objectively on case to case basis keeping in view the broad objective indicated supra. No inflexible guidelines can be laid down. By way of an illustration, let us take a case of the vehicle not having registration being plied on the roads. The competent authority will be justified in seizing and detaining the vehicle apart from taking any action open to him under law till the defect is remedied and the vehicle is registered. Otherwise, there is every possibility of vehicle being used on roads without complying with the basic rule of registration. By detaining the vehicle till the vehicle owner takes necessary steps for registration, the transport authority will be ensuring compliance with the mandatory requirements of the Act and detention will not cause much prejudice to the owner in as much as the vehicle cannot in any case be put to use freely without registration. Let us also take a case where the concerned Transport authority has reason to apprehend that the vehicle would become scarce when once released and there are no effective means by which the ultimate decision taken by the competent authority after an enquiry is implemented. In such a case, the vehicle may possibly be detained in order to enforce the provisions of the Motor Vehicles Act and the allied Acts. Here again, the formation of belief should be based on relevant and existent grounds, but not on imaginary or illusory grounds.
11. We must point out that the power conferred by Section 207 is too bald and leaves many gaps supposed to be filled in by judicial intervention or by a sensible and pragmatic exercise of power. Supposing, the authorised Officer is not satisfied with the documents that may be produced by the vehicle owner and he therefore refuses to release the vehicle, how long should the detention continue? When should it end? Should it be left to the sweet will and pleasure of the concerned authority? These are various questions that would crop up for consideration. In various enactments, the act of seizure is followed by proceedings for confiscation or the like and seizure is considered to be a step in aid to pave the way for ultimate action. In a case where the authorized Officer refuses to exercise his discretion to release the vehicle under Section 207(2), this may give rise to certain problems for which it may be difficult to find solutions within the four corners of the Act. We would like to add that the detention of vehicle shall not continue beyond a short period unless as already indicated, such detention is essential to facilitate the finalisation of the enquiry or to ensure compliance with the ultimate order passed. If other steps or remedies are equally open to effectively enforce the ultimate order that may be passed and the detention no longer serves any purpose, an implied duly is cast on the competent authority to release the vehicle without undue delay. Reasonable conditions to ensure the production of vehicle can of course be prescribed.
12. One of the learned Counsel relied on the decision in Transport Commissioner, Hyderabad v. Sardar Ali, , to contend for the proposition that the Transport authority seizing the vehicle under the provisions of Motor Vehicles Act is bound to file a complaint before the Magistrate for the alleged offence without undue delay and in such an event the Court gets jurisdiction to pass suitable orders with regard to release of vehicle and that would curb the tendency of prolonged detention and safeguard the interests of both the parties. We do not think that the Supreme Court has laid down the proposition that the seizure should necessarily be followed by for launching a prosecution for an offence. Nor do we think that a direction to file a complaint in the Magistrate's Court wherever there is seizure so as to enable the owner of the vehicle to approach the Magistrate's Court for release, would be in the interests of the owner and that it would facilitate expeditious release. The Supreme Court was dealing with the Constitutional validity of Section 129-A of old Motor Vehicles Act. Section 129-A almost corresponds to Section 207(1) of the new Act. There was no provision in Section 129-A corresponding to subsection (2) of Section 207 providing for release of the vehicle by the authorised Officer on application made to him. Apart from that, Section 129-A and Section 123 which provides for punishment for certain offences were read together by the Supreme Court, having regard to the fact that the same situations are contemplated in Sections 129-A and 123. In the new Act, the provisions are some what different in the sense that link between the seizure and prosecution cannot be readily inferred. True, a complaint can be laid before the competent Court of Magistrate against the erring vehicle owner after the seizure thereof on the ground that it was being used without permit or in violation of conditions of permit. But, it is not imperative that such complaint should be laid though the Supreme Court observed that "the next logical and proper step for the police Officer or the authorised person would be to lay a complaint before the competent Court to take cognizance of the offence". We cannot understand the decision of the Supreme Court as laying down the proposition that no alternative course of action is open to the authorized Officer. Section 207 itself casts an implied obligation on the Transport authority to apply its mind to the question of release of the vehicle without avoidable delay as soon as he is approached by the operator and as observed supra, an implied duty is cast on the Officer concerned to act fairly and reasonably in the matter of exercise of discretion. Moreover, we would like to reiterate that if the concerned officer does not respond to the application filed for release of the vehicle in terms of Section 207(2) with the promptitude expected of him or prescribes unreasonable or onerous conditions, the remedy under Article 226 is always available, as pointed out by the Supreme Court in the decision above cited.
13. In this context, the observation of the Supreme Court in Sardar Ali's case (supra) is quite apposite and gives a clue as to the nature and amplitude of the power of seizure under Section 207 (1) corresponding to Section 129-A construed by the Supreme Court. We quote: "The custody of the vehicle in the hands of the Police Officer or the authorized person is but temporary and he is therefore, obliged to act and take all further steps in the matter with all expedition".
14. Even in a case where the detention is essential till the enquiry in respect of violation is finalised, such enquiry should be taken up and concluded with utmost expedition and the need for detention of the vehicle should be reviewed in the light of the ultimate order that may be passed. The cases of inaction, abuse or perverse exercise of discretion would furnish course of action to invoke the jurisdiction of this Court under Article 226.
15. Coming back to the aspect of taxation, broadly speaking, Motor Vehicles Act is not concerned with the payment of tax though payment of tax is insisted upon by the Transport officials for the purposes of granting permit or registration of the vehicle. It is apt to not 'that the taxes on vehicles' is exclusively a State subject vide Entry 57 to List II of VII Schedule, though, however, levy of tax should conform to the principles that may be laid down by the Parliament in exercise of power conferred on it under Entry 35 of list HI. It is in this background, Section 207 should be viewed. When a particular Section dealing with seizure under the State Taxation Act does not provide for seizure unless differential tax payable is determined and ascertained after enquiry, it would be incongruous to so construe Section 207 as to confer the power of seizure on the ground of anticipated tax liability. What cannot be done under Section 8 of the Taxation Act, cannot be accomplished under Section 207 of Motor Vehicles Act as well. No doubt, the power to seize under Section 207, as already noted, can be resorted to in case the vehicle is found plying in contravention of conditions of permit relating to purpose of user etc., which in turn implies that the vehicle operator is exposed to the possibility of additional tax demand. But the power under Section 207 can be exercised not because ofprima facie satisfaction that tax has not been paid but for the reason that the vehicle has been or is being used without permit or in violation of conditions of permit. The seizure under Section 207 has to be delinked from the question of tax liability under the provisions of State Taxation Act though the violations giving rise to seizure may give rise to action under both the Acts. The seizure cannot continue under Section 207 unless and until the tax is determined, demanded and collected.
16. The other important aspect which needs reiteration even at the risk of repetition is that the seizure cannot be kept in force indefinitely or for unduly long period. It must be remembered that except in rare cases, detention of the vehicle is not necessary for holding an enquiry and taking necessary action for contravention of the conditions of permit. No purpose will be served if the vehicle is detained and kept in the custody of the police or Transport department for weeks and months together. The power conferred by Section 207 as all other statutory powers should be exercised in a reasonable manner, more so because it is, by its very nature, a drastic power. The only purpose that it is very often served by the seizure of the vehicle is to infuse a sense of deterrence. But if that be the sole consideration and detention of vehicle is not necessary for the purpose of taking further action as per the provisions of the Act, it is incumbent on the part of the Transport authority to release the vehicle with outmost expedition on an application made in this behalf and subject to stipulation of conditions such as production and non-alienation of vehicle pending further enquiry. The approach of the authorised Officer in the matter of release of vehicle should depend on the nature of violation committed and whether the release would in any way impede the enquiry or enable the vehicle owner to further circumvent mandatory legal provisions. Prima facie, it appears to us that the release of the vehicle found plying in contravention of the conditions of permit, does not frustrate the purposes of the Act or the impending enquiry. Exceptional situations may be there, but they are few. If no orders are passed on the application for release or the application is rejected, it is open to the aggrieved person to approach the Court under Article 226 apart from having recourse to alternative remedies if any available. We do hope that the Transport authorities will act fairly and reasonably in disposing of the applications for release of the vehicles seized under Section 207 and avoid the situation of driving the vehicle operators to Courts.
17. Thus, we are of the view that:
(1) A vehicle plying in breach of conditions of permit as regards the purpose of usage of the vehicle can be seized under Section 207 of the Motor Vehicles Act, but not under Section 8 of A.P. MV Taxation Act. But, the mere fact that the latter provision is also quoted does not vitiate seizure.
(2) The vehicle so seized cannot be detained until the completion of enquiry under the Taxation Act and the payment of tax if any pursuant to the demand raised.
(3) The vehicle seized under Section 207 on the ground of contravention of conditions of permit should not be detained for unduly long time and on application filed by the vehicle operator, the vehicle ought to be released with expedition subject to stipulation of conditions to ensure non-alienation of the vehicle and the production of vehicle in connection with the enquiry unless there are exceptional circumstances which make the release of vehicle frustrate the enquiry. Such conditions may include furnishing of cash security of a reasonable amount which could be adjusted later on towards compounding fee or tax if any demanded . Incidentally, it may be mentioned that this Court while directing release of vehicles, has been directing deposit ranging between Rs.2,000/- to Rs.5,000/-.
(4) The demand of estimated tax to be determined after due enquiry under the provisions of the Taxation Act or furnishing security therefor shall not be made a condition precedent for the release of the vehicle seized under Section 207 of the MV Act.
(5) In exceptional cases where there is reasonable apprehension that the vehicle will not be available for taking further action or the ultimate order passed in the light of the enquiry cannot be implemented on account of any special facts and circumstances, the competent Transport authority can withhold the release or stipulate any appropriate conditions for release other than the payment of tax not yet determined. In such a case, it is expected of them that the reasons are recorded in writing.
(6) If the competent authority refuses to release the vehicle within a reasonable time, say within three days, after the application is made in this behalf, or imposes onerous conditions, resort to remedy under Article 226 is open to the aggrieved person. The Court may direct release of the vehicle on such conditions as may be deemed appropriate viz., deposit of certain amount in order to secure the production of vehicle in connection with the enquiry or prosecution, prohibiting the transfer of the vehicle etc. If any amount is deposited pursuant to the order of the Court, the same is liable to be adjusted ultimately against the compounding fee or the tax payable.
18. Having thus laid down the principles vis-a-vis the interpretation of Section 8 of Taxation Act and Section 207 of MV Act and the board guidelines for the exercise of power under Section 207 and the scope of judicial intervention, we dispose of the writ petitions with directions to release the vehicles forthwith without insisting on the payment of differential tax yet to be determined if not already done pursuant to the interim orders. The amount paid pursuant to the interim orders will have to be adjusted against the final demand if any raised after due enquiry. We also note that interim release has been directed on condition of the petitioners herein furnishing undertaking that the vehicles will be produced as and when required in connection with (he enquiry and the vehicles will not be transferred pending (he enquiry under Motor Vehicles Act or A.P. MV Taxa(ion Act. Such undertaking shall remain in force as long as it is necessary. It is open to the petitioners in Writ Petition Nos.26065 and 26089 of 1999 to seek relaxation of the conditions regarding production of the vehicles on a particular day. Writ petitions are accordingly, disposed of We make no order as to costs.