Karnataka High Court
Ameerjan vs The Regional Transport Officer, Mandya on 11 March, 1996
Equivalent citations: ILR1996KAR1768, 1996(3)KARLJ186
ORDER G.C. Bharuka, J.
1. The petitioner is the owner of omnibus bearing Registration No. CNN 6447. It was registered only for personal use. On 4.4.1989, the vehicle was checked by the Inspector of Motor Vehicles and a check report was issued with an allegation that the vehicle was found carrying 8+1 adult passengers for hire or reward. According to the petitioner subsequently he was served with a demand notice levying additional tax under Section 8B of the Karnataka Motor Vehicles Taxation Act, 1957 ('the Act', for short) issued by the respondent Regional Transport Officer. According to him, the allegation levelled in the check report was palpably false.
2. Section 8B of the Act reads as under:
"8-B. Further additional Tax for misuse of motor vehicle.-When any motor vehicle in respect of which tax has been placed is misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted or is used in such manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle, shall for such misuse other than the one under Sub-section (4) of Section 3, pay a further additional tax of a sum which is equal to double the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being misused or used not in accordance with the purpose for which the vehicle is registered or the permit is granted."
3. It is well settled that even if the Statutory provision does not expressly provide for granting an opportunity of hearing after due notice to the person likely to be adversely affected, the rule of Statutory interpretation impels that such a requirement should be treated as implicit in the provision itself.
4. The case of OLGA TELLIS v. BOMBAY MUNICIPAL CORPORATION, , is a classic case to appreciate the widening horizons of the said principle. In this case Section 314 of the Bombay Municipal Corporation Act provided that the Commissioner may, without notice, take steps for removal of encroachment in or upon any street, channel, drain, etc. To save the said provision from the vice of unconstitutionality as being conferring arbitrary and unguided powers, the Court read the provision as enabling and not compulsive in nature. It was held that -
"That discretion has to be exercised in a reasonable manner so as to comply with the constitutional mandate that the procedure accompanying the performance of a public act must be fair and reasonable. We must lean in favour of this interpretation because it helps sustain the validity of the law. Reading Section 314 as containing a command not to issue notice before the removal of an encroachment will make the law invalid."
It has further been held that -
"There are situations which demand the exclusion of the rules of natural justice by reason of diverse factors like time, place, the apprehended danger and so on. The ordinary rule which regulates all procedure is that persons who are likely to be affected by the proposed action must be afforded an opportunity of being heard as to why that action should not be taken."
5. The said view has been recently followed with approval in the case of C.B. GOUTAM v. UNION OF INDIA, , wherein, while construing Section 269UD of the Income Tax Act, 1961, which during the material period did not provide for hearing the interested persons before passing an order for pre-emptive purchase, it was held that "the Courts have generally read into the provisions of the relevant Sections a requirement of giving reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected. This would be particularly so in a case where the validity of the Section would be open to a serious challenge for want of such an opportunity".
6. In the case of DELHI TRANSPORT CORPORATION v. D.T.C. MAZDOOR CONGRESS, (Pr. 199), it has been held that -
"It is now well settled that the 'audi alteram partem' rule Which in essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do not supplant but supplement the Rules and Regulations."
7. The impugned Section 8B of the Act is not intended to meet any emergency which brooks no delay. It is merely a penal provision in a taxing statute warranting no urgency at the cost of audi alteram partem rule ('hear the other side'). Therefore to read it in conformity with the rules of fairplay, which has now been conclusively identified as one of the principal constituents of Article 14 of the Constitution of India, it has to be held that before passing an order inflicting penalty by way of additional tax for alleged misuse of the motor vehicle under Section 8B of the Act, the person likely to be affected has to be granted a reasonable opportunity of hearing preceded by a notice containing the charges.
8. In the present case, admittedly no show cause notice was issued by the first respondent before passing the impugned order at Annexure-A levying additional tax of Rs. 2,400/-. Accordingly, the said order as also the appellate order at Annexure-B based only on limitation, are quashed.
9. Anyhow, it is directed that if the petitioner appears before the first respondent before 30th April 1996, then the first respondent will serve upon him a notice precisely stating therein the allegations on the basis of which the additional tax is sought to be levied under Section 8B of the Act, granting him a reasonable opportunity of filing his objections, and, if so desired, fix a date of hearing granting the petitioner a reasonable opportunity to rebut the allegations so levelled; and thereafter the first respondent will pass appropriate orders in accordance with law setting out the reasons for the same. In case, the petitioner fails to avail the opportunity granted hereunder, it will be open for the first respondent to pass ex parte order in accordance with law. Writ Petition is accordingly allowed to the said extent. No costs.