Nuclear Power Corporation India ... vs State Of Rajasthan & Anr on 10 July, 2015

[Cites 10, Cited by 0]

Rajasthan High Court - Jaipur

Nuclear Power Corporation India ... vs State Of Rajasthan & Anr on 10 July, 2015

1. This petition has been filed by the petitioner, which is a corporation established by the Union of India and was incorporated on 17th day of September, 1987. The petitioner produces electricity through atomic energy. The issue raised in the instant writ petition is about levy of tax, penalty and interest on vehicles owned by the petitioner under the Rajasthan Motor Vehicles Taxation Rules, 1951 for the reason that the levy under Clause (b) of Rule 28 of the Rules, 1951 is unconstitutional and the State Government has no authority to impose tax on commercial enterprises which are established & funded by the Central Government.

2. It is claimed that Article 285 of the Constitution does not create two separate categories regarding the property of the Union and are exempted from levying tax on property of the Union even if involved in commercial activities and Rule 28 is directly hit by Article 285 of the Constitution and is unconstitutional.

3. It is further claimed that similar issue was raised in the year 1970 about payment of road tax and other similar taxes on the motor vehicles of Rajasthan Atomic Power Station and the Assistant Secretary to the Government of Rajasthan, Department of Home, in consultation with the Law Department, opined that no tax on the motor vehicles under the Rules, 1951 can be imposed and the contents of the letter in short dt. 11/12/1972 mentioned that since Atomic Power Project is the Department of the Central Government and the vehicles owned and possessed by Atomic Power Project, being property of the Union, tax is not required to be levied. It was further expressed that Article 285(1) read with Rule 28(b) of the Rules, 1951 provided total exemption from liability to tax in case of motor vehicles that are owned & exclusively used by or on behalf of any department of the Central Government and since the motor vehicles owned are exclusively used by the Atomic Power Project department of the Central Government for carrying its employees to and from Atomic Power Project and are not used in connection with commercial enterprises, exempts such motor vehicles from liability to tax. It is contended that intention was that no tax is levied on such an enterprise.

4. It is contended by ld. counsel for the petitioner that Rule 28(b) is ultravires to the Constitution and despite the fact that the petitioner may have been converted into a limited company but still it continues to be a Government Undertaking and therefore, under Rule 28(b), neither tax nor penalty could be levied. He further contended that though vide Notification dt.25/08/1981, the petitioner has been notified as a commercial undertaking w.e.f 01/04/1981 and the petitioner-company was incorporated on 17/09/1987 and when from 01/04/1981 to 16/09/1987, the company itself was not in existence, the question of charge of tax, interest and penalty does not arise and in support of submission, he relied upon a judgment rendered in the case of Municipal Corporation, Amritsar Vs. Senior Superintendent of Post Offices, Amritsar Division and another: 2004 (3) SCC 92.

5. Per contra, claim of the respondent has been that in all the earlier years, the position of leviability of tax may not have arisen because it was an undertaking of the Central Government but from 1st April, 1981, the petitioner did not remain a department of the Central Government and it was converted to a public limited company/corporation and thus on an audit objection having been raised by the Dy. Accountant General, the demand was raised regarding road tax from 01/04/1981 to 16/09/1987 under the Motor Vehicle Rules, 1985. It is claimed that not only tax but penalty was also demanded vide notice dt.21/12/1989.

6. It is further claimed that earlier a writ petition was filed by the petitioner, bearing DB Civil Writ Petition No.1550/1990 where validity of Rule 28(b) was also challenged and judgment was passed in the aforesaid writ petition on 01/05/1992 where it was held that on and from 01/04/1981, the petitioner has been notified as a commercial undertaking and therefore, the road tax became payable for the use of the motor vehicles owned by the Atomic Power Station and the validity of Rule 28(b) had been upheld by this Court.

7. Ld. counsel for the respondents further contended that the petition is barred by the principles of res-judicata. He further contended that once the petitioner has been notified as a commercial undertaking w.e.f. 01/04/1981, the liability had certainly arisen and this Court had simply remanded the matter back to the Assessing Officer (AO) to provide an opportunity of hearing to the petitioner before levy of penalty. Counsel for the respondent contended that counsel for the petitioner, in pursuance of the order passed by this Court on 01/05/1992, appeared before the District Transport Officer, Kota and again reiterated that (i) no tax is leviable on a Government Undertaking; (ii) the vehicles being used by the petitioner are not used for commercial purposes and it is not a commercial undertaking and these very submissions were already considered by this Court on 01/05/1992 and nothing has been assailed or brought on record as to how the penalty is not leviable under Section 6 of the Act.

8. He further contended that after directing for levy of penalty vide order dt.28/12/1992, detailed order was passed on 13/01/1993 where vehicle-wise levy of penalty was imposed which also has not been shown as to how the said levy of penalty or calculation is not proper and contended that it is in consonance with Sec. 6 of the Act and accordingly contended that no interference is required in the matter.

9. We have heard ld. counsel for the parties and perused the material on record.

10. Admittedly, the petitioner had earier filed DB Civil Writ Petition No.1550/1990 (Nuclear Power Corporation India Ltd. Vs. State of Rajasthan & anr.) assailing the earlier notice dt.21/12/1989 where tax and penalty to the tune of Rs.17,22,776/- had been levied and in that writ petition , the petitioner had sought following reliefs:-

(i)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction declaring the provisions of Rajasthan Motor Vehicles Taxation Rules, 1951 to be ultra-vires so as it relates to imposition of tax on the motor vehicles owned by the Rajasthan Atomic Power Station, Rawatbhata;

(ii)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction declaring the demand of penalty vide Annexure 9 to be without jurisdiction;

(iii)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction directing the Respondents to make refunds to the petitioner amounting to Rs.14,26,913/- towards the tax already recovered by the Respondents from the petitioner;

(iv)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction declaring the Rajasthan Motor Vehicles Taxation Rules to be ultra-vires so as it relates to imposition of tax on the property of Rajasthan Atomic Power Station;

(v)Cost of the writ petition may be awarded in favour of humble petitioner;

(vi)Any other relief which this Hon'ble Court may deem just and proper in the facts and circumstances of the case, may also be allowed in favour of your humble petitioner.

11. This Court in DB Civil Writ Petition No.1550/1990, referred to above, vide order dt. 01/05/1992, after examining the controversy at hand, came to the conclusion that the Rajasthan Motor Vehicles Taxation Rules, 1951 was intravires and there is nothing wrong in the said rules having been introduced by the State of Rajasthan. It would be appropriate to quote the relevant observations made in this regard in the order dt. 01/05/1992, which reads ad-indra:-

We are of the opinion that after the President of India declared the Atomic Power Station as commercial undertaking, Rule 28(b) ceased to apply. The Rajasthan Atomic Power Station was declared as a commercial undertaking by the President of India with effect from April 1, 1981, therefore, the road tax became payable for the use of the motor vehicles owned by the Atomic Power Station. It is incorrect to say that the tax was payable only after 17-9-1987 when the Rajasthan Atomic Power Station was taken over by the Nuclear Power Corporation India Limited. The State Government became entitled to recover the tax under the Memorandum dated 25-8-1981 issued by the Government of India w.e.f. 1-4-1981.

Under which provision the amount of penalty was imposed on the petitioner vide Annex.-9, could not be explained to us by the learned counsel appearing for the State of Rajasthan.

The provision under which the penalty was imposed and whether imposition of the penalty was complied with is required to be gone into. We, consequently, quash Annex.9 to the writ petition and call upon the respondents to give an opportunity of hearing to the petitioner before imposition of penalty and the tax. For all the time this writ petition remained pending would not come in the way of the petitioner in getting the relief if the penalty is illegal or that the amount of tax claimed was not due.

In the result, the writ petition succeeds and is allowed partly.

12. Thus, this Court, in the aforesaid judgment, has held that the petitioner was liable to levy of road tax and the State Government was within its competence to recover the tax under the memorandum dt.25/08/1981 w.e.f. 01/04/1981 after the Atomic Power Station has been notified as a commercial undertaking and Rule 28(b) ceased to apply and this judgment has attained finality. This Court, in the aforesaid judgment, with reference to penalty, directed the respondents to afford an opportunity of hearing to the petitioner before imposition of penalty. In furtherance of the said direction of this Court in the aforesaid judgment, the respondents served notice and afforded opportunity of hearing and levied the penalty as was imposed earlier which has been assailed in the present petition.

13. It would be appropriate to quote the prayer made in the instant writ petition, which reads ad-infra:-

(i)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction declaring the provisions of Rajasthan Motor Vehicles Taxation Rules, 1951 to be ultra-vires so as it relates to imposition of tax on the motor vehicles owned by the Rajasthan Atomic Power Station, Rawatbhata;

(ii)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction declaring the demand of penalty vide Annexure 3 & 4 to be without jurisdiction;

(iii)an appropriate writ, order or direction in the nature of mandamus or any other writ, order or direction directing the respondents to make refunds to the petitioner amounting to Rs.14,26,913/- towards the tax already recovered by the respondents from the petitioner.

(iv)by appropriate writ, order or direction in the nature of mandamus or any other writ provisions of rule 28(b) of the Rajasthan Motor Vehicle Taxation Rules, 1951 be declared as ultra-vires as the same contravene Article 285 of the Constitution of India as it is not an Act or Rule promulgated by the Parliament;

(v)cost of the writ petition may be awarded in favour of humble petitioner;

14. Analyzing the prayer in earlier writ petition (DB Civil Writ Petition No.1550/1990) vis-a-vis the present prayer, it transpires that the controversy revolves to the same facts and the material and this Court has already held that the provision is ultra-vires and there is nothing wrong in the said Rule having been introduced by the State of Rajasthan and admittedly it has attained finality. In our opinion, once a matter has been finally decided by this Court, no party can be permitted to initiate fresh proceedings based on same set of facts & circumstances and is barred by the principles of res-judicata.

15. The law with reference to the principles of res-judicata is settled and if we analyze the prayers of both the writ petitions, quoted herein above, it transpires that similar prayer has been made in both the writ petitions and therefore, in our view, the present petition does not survive and as far quantum on penalty is concerned, the quantum of penalty being essentially on disputed facts, we refrain ourselves in addressing to the controversy relating to levy of penalty as this is not the proper forum to decide disputed question of facts.

16. In Fida Hussain and ors. Vs. Moradabad Development Authority and Anr.: AIR 2011 (SC) 3001, the Hon'ble Apex Court opined that the principles of res-judicata would apply when the lis was inter parties and that attained finality of the issues involved. It further observed as under:-

It is now well settled that a decision of this Court based on specific facts does not operate as a precedent for future cases. Only the principles of law that emanate from a judgment of this Court, which have aided in reaching a conclusion of the problem, are binding precedents within the meaning of Article 141. However, if the question of law before the Court is same as in the previous case, the judgment of the Court in the former is binding in the latter, for the reason that the question of law before the Court is already settled. In other words, if the Court determines a certain issue for a certain set of facts, then, that issue stands determined for any other matter on the same set of facts.

17. In our view, since the controversy in both the petitions being the same, therefore, the present writ petition does not survive to be examined on merits.

18. Question arose before the Apex Court in the case of Electronics Corporation of India Ltd. and others Vs. Secretary, Revenue Department, Govt. of Andhra Pradesh and others: (1999) 4 SCC 458 that the Electronics Corporation of India Ltd., being an undertaking of the Government of India and that being wholly Government owned company, therefore, would not be liable to be taxed by virtue of Article 285 of the Constitution. However, the Apex Court was of the opinion that the said company was a limited company, a legal person, separate and distinct from its individual members and that property of the company is not the property of the shareholder and a distinction has to be drawn between the company and its shareholder even though the shareholder may be only one and in the eye of law, a company, registered under the Companies Act, is a distinct legal entity other than the legal entity or entities that holds its shares and accordingly came to the conclusion that no exemption was available to the said company.

19. In Municipal Commissioner of Dum Dum Municipality and others Vs. Indian Tourism Development Corporation and others: (1995) 5 SCC 251 the Hon'ble Apex Court had also an occasion to consider a case of property tax having been imposed by Municipality on the International Airport Authority of India and the Apex Court, after analyzing the scheme of the Act, came to a conclusion that the said authority is a statutory body and a distinct juristic entity created for carrying on business under Article 298 and the properties, which were vested in the Authority, ceased to be those of the Union of India for the purpose of Article 285 and held as under:-

35.For all the above reasons, we are of the opinion that the International Airports Authority of India is a statutory corporation distinct from the Central Government and that the properties vested in it by Section 12 of the Act cannot be said to have been vested in it only for proper management. After the date of vesting, the properties so vested are no longer the properties of the Union of India for the purpose of and within the meaning of Article 285. The vesting of the said properties in the Authority is with the object of ensuring better management and more efficient operation of the airports covered by the Act. Indeed that is the object behind the very creation of the Authority. But that does not mean that it is a case of limited vesting for the purpose of better management. The Authority cannot, therefore, invoke the immunity created by Article 285(1) of the Constitution. The levy of property taxes by the relevant municipal bodies is unexceptional.

20. In view of what we have observed herein above, the writ petition lacks merit, impugned order cannot be faulted with and the writ petition is accordingly dismissed with no order as to costs.

[J.K. RANKA], J.		 		[AJAY RASTOGI], J.	 

Raghu

Certificate:All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailed. /Raghu, Sr. PA.

Unlock Advanced Research with PRISMAI

Rajasthan High Court - Jaipur