Patna High Court
Arbind Kumar Singh vs Nand Kishore Prasad And Anr. on 24 October, 1967
Equivalent citations: AIR1968PAT254, AIR 1968 PATNA 254
JUDGMENT Narasimham, C.J.
1. This is an application under Article 226 of the Constitution for quashing an order in revision under Section 64-A of the Motor Vehicles Act (Bihar Amendment) Act, 1949, passed by the Minister in charge of the Transport Department of the Government of Bihar on the 18th April, 1966. The learned Minister set aside the order passed by the Chairman, Appeal Board, dated the 8th April, 1965, and restored the order, dated the 20th February, 1965, passed by the Chairman, South Bihar Regional Transport Authority.
2. The petitioner and some other persons applied to the South Regional Transport Authority for grant of a permanent stage carrier permit on the route Dehri-Bhabua. That Authority, in its resolution No. 23, dated the 15/16th January. 1965, decided to grant the permit to the petitioner "on production of all valid documents of 1964 model bus along with clearance certificate of transport tax within one month from the date of the order, failing which the sanction of permit in his favour would stand automatically revoked, and the permit will then be given to the next deserving candidate Sri Nand Kishore Prasad" (respondent No. 1). On the 17th February, 1965, respondent No. 1 filed a petition before the Chairman, S. B., R. T. A alleging that the petitioner had not fulfilled the aforesaid conditions. The Chairman, by his order dated the 20th February, 1965, upheld this objection, holding that the petitioner did not produce certificate of clearance from the Commercial Taxes Department, and the mere filing of chalans in proof of payment would not suffice. He observed in his order (Annexure D/1) that all demands up-to-date ought to have been paid in their entirety. He, therefore, ordered that the permit granted to the petitioner stood automatically revoked, and that the permit should be given to the next nominee, viz., respondent No. 1. Shri Nand Kishore Prasad.
3. Against this order, the petitioner preferred an appeal before the Appeal Board. That Board, by its order dated the 6th April, 1965 (Annexure E), held that the clearance certificate produced by the petitioner, dated the 17th February, 1965, was sufficient to show that all dues up to that date had been paid, and that the further instalments of tax fixed by the Tax Department in the nature of advance payment in respect of instalments due after the date of the passing of the order dated the 15/16th January, 1965, by the S B. R. T A. Hence, he reversed the order of the Chairman. F B. R. T. A.
4. Respondent No. 1, thereupon, took up the dispute before the Minister, Transport, in revision under Section 64-A of the Motor Vehicles Act, 1939 (Bihar Amendment). For the first time before the Minister in revision, it was pointed out that there was on record a copy of the reply received from the Deputy Commissioner of Commercial Taxes, Intelligence Branch, Bihar, Patna, under Memo No. 8527, dated the 24th July, 1965, from which it was found that a sum of Rs. 1.675/- was outstanding against the petitioner on the 16th February, 1965, in respect of his buses Nos. BRA 646 and BTA 2841, and that this sum was actually paid by the petitioner only on the 4th March, 1965. On the basis of this document, the Minister called upon the counsel for the petitioner to make his submissions as to how it could be urged that all transport taxes due had been paid within one month from the date of the original order, as required by annexure A. The learned Counsel urged in his reply that, inasmuch as no demand was made for this tax, it could not be said to have been due against the petitioner on the 16th February 1965 though the petitioner paid the sum on the 5th March, 1965 with a view to avoid unnecessary trouble The Minister, however, rejected this argument, observing that, under Bihar Act XVII of 1950 (which was subsequently re-enacted as Bihar Act XVII of 1961), it was the duty of every owner of a public service vehicle to pay the tax imposed, and that the tax became due even prior to the issue of the demand notice. In this view of the law, he held that the condition imposed at the time of granting the permit was not fulfilled within the time fixed, and hence the permit to the petitioner was rightly revoked by the Chairman. S. B. R. T. A.
5. It was, first, urged by Mr. Basudeva Prasad for the petitioner that, at the stage of revision, the Minister should not have permitted new evidence to be looked into, specially when it was not referred to by the two lower authorities. In this application under Article 226, it was further stated in paragraph 19 that this report of the Deputy Commissioner, dated the 24th July, 1965, was never shown to the petitioner, and the petitioner had no opportunity to meet the said report. This statement is obviously a reckless and incorrect statement because the order of the Minister (Annexure F) shows clearly that the Minister showed that letter to the Counsel for the petitioner, called upon him to make his submissions on the same, and also recorded in his order the summary of the Counsel's argument on this point and his own decision thereon. A copy of that letter was actually on the record of the case. It was not a new piece of evidence that was suddenly brought at the revisional stage to the prejudice of the petitioner. If the Counsel for the petitioner, instead of making his submissions on that letter, had asked for an adjournment with a view to adduce rebutting evidence and if such a prayer had been disallowed, there might have been some justification for the complaint that the petitioner was prejudiced by the admission of the additional evidence at such a belated stage. But the record does not show nor is it averred anywhere in the application that the petitioner's Counsel wanted time to adduce rebutting evidence. On the other hand, the order of the Minister shows that the petitioner's Counsel immediately made his submissions on the legal effect of that letter. The decisions, on which Mr. Basudeva Prasad has relied on this point, do not support him fully.
In T. Narayana v. State of Andhra, AIR 1957 Andh Pra 383, it was observed that, in exercise of revisional jurisdiction, the authority concerned cannot travel beyond the record and set aside the order of the lower authority on facts not apparent from the record. Here, however, as already pointed out, a copy of the letter of the Deputy Commissioner of Commercial Taxes was on record. In Rohini Kumar Bhattachar.jee v. State of Assam, AIR 1959 Assam 183 also, it was observed that the Appellate Authority cannot make out a new case for a party. Here, however, there is no question of making out a new case. A document, which was on record before the Court of revision, was duly considered after giving notice to the petitioner's Counsel and hearing his submissions on the same. I may refer to New Prakash Transport Co. Ltd. v. New Suwarna Transport Co. Ltd. AIR 1957 S. C. 232 where their Lordships upheld the decision of an Appellate Authority which was partly based on a report made by the police, the contents of which were merely read out by the Appellate Authority before the parties prior to the passing of the order. Their Lordships observed at page 241:
"We have also pointed out that no grievance was made at the time the Appellate Authority was hearing the appeal by any of the parties, particularly by the first respondent, that the second report should not have been considered or that they wished to have a further opportunity of looking into that report and to controvert any matter contained therein. They did not move the Appellate Authority for an adjournment of the hearing in order to enable it to meet any of the statements made in that report."
I am therefore, of the opinion that the rules of natural justice were duly observed when the said document was considered for the first time by the Court of revision after giving the petitioner's Counsel an opportunity of making his submissions.
6. It was somewhat faintly contend-ed that, in exercising revisional jurisdiction under Section 64-A (Bihar Amendment) the Minister had no jurisdiction to take additional evidence. This argument is clearly untenable. Section 64-A does not contain the well-known restrictive conditions imposed on a Court of revision by Section 115, Civil Procedure Code. Hence, the revisional authority's right is not restricted to jurisdictional matters only. So long the principles of natural justice are observed and no prejudice is caused to any party, there can be no legal objection to the revisional authority even permitting additional evidence to be given by either party and relying, on the same.
7. The second contention of Mr. Basu-deva Prasad is that the S. B. R. T. A. had no jurisdiction, in its order dated the 15/16th January 1965, while granting a permit to the petitioner, to impose a restriction to the effect that he must produce clearance certificate of transport tax within one month from the date of the order. It was urged that the only condition that could be imposed was that which would come within the scope of Section 47(1) of the Motor Vehicles Act, and that the requirement about the production of clearance certificate of transport tax was wholly outside the scope of that section. There are, however, two objections to this argument. Firstly, the petitioner subjected himself to that condition, and claimed to have fulfilled the same by producing clearance certificate from the Commercial Taxes Department in respect of Sasaram Circle and also by filing challans. This will be clear from the order of the Chairman, S. B. R. T. A., dated the 20th February, 1965 (Annexure D/1). If the petitioner thought that the imposition of such a condition by the S. B. R. T. A. on the 15/16th January, 1965, (Annexure A), was itself invalid, he ought to have challenged it before superior authorities in appeal and revision. Having accepted the condition as valid and having attempted to claim the benefit of the order on the ground that he had fulfilled those conditions, he cannot be permitted at this belated stage to take up the plea that the condition itself is invalid as being outside the scope of the Motor Vehicles Act.
8. Moreover, it cannot be said that the imposition of a condition to the grant of a permit under the Motor Vehicles Act to the effect that all oustanding transport taxes should be paid is outside the scope of the Act. If the Authority had insisted that the petitioner should pay up all other public demands, such an order may be invalid. In K. Raman & Co., Tellicherry v. State of Madras. AIR 1953 Mad 84 a condition to the grant of a licence under the Retail Yarn Dealer's Control Order that the Licencees must pay up all the income-tax arrears was struck down as invalid. But Onkarmal Mistri v. Regional Transport Authority, Barreling, AIR 1956 Cal 490, on which also Mr. Basudeo Prasad relied, contains an observation which would show that a condition about payment of transport tax, while granting a permit under the Motor Vehicles Act would be valid as being in the interests of the public generally as required by Clause (a) of Sub-section (1) of Section 47 of the Motor Vehicles Act. I may quote the following passage at page 495:
"The 'interests of the public', as mentioned in the Act, cannot include matters which have nothing to do with the interests of the public which was going to use the Motor Vehicles in question or such as are wholly unconnected with the user of the roads of the transport system which was under consideration of the R. T. A. in the given case."
The transport taxes are in the nature of compensatory taxes (see Automobile Transport (Rajasthan Ltd. v. State of Rajas-than, (AIR 1962 SC 1406) and their collection is vitally connected with the organisation of the transport system in the State and the user of the roads by the public service vehicles. Hence, the requirement about payment, of outstanding transport taxes before a stage carrier permit can be given to an applicant cannot be struck down as being wholly unconnected with the subject. Mr. Basudeva Prasad, however, urged that Bihar Act XVII of 1950 and the Rules made thereunder contain ample provision for realisation of this tax, and, for that purpose, it was not necessary to impose such a condition while granting permit This argument, however, is beside the point. Once it is conceded (quite properly) that, in granting a permit, the R.T.A. shall have regard to the interests of the travelling public using the roads in the State and once it is clearly established that transport taxes are in the nature of compensatory taxes, it is always open to the Authority to insist on payment of such taxes before granting permit because such a condition will be in the interests of the general travelling public using motor vehicles. It may be that the transport tax is a tax on the persons travelling in the vehicles and not on the vehicles themselves but this makes no distinction in principle so far as the existence of a direct nexus between the condition imposed and the purpose of Section 47 of the Motor Vehicles Act is concerned.
9. The third contention of Mr. Basudeva Prasad is regarding the correctness of the view taken by the Transport Minister that the transport tax is due from a person even before the issue of a demand notice on him. For an examination of this point, it is necessary to state some more facts. In 1950- 51, transport tax was payable under the provisions of the Bihar Finance Act of 1950 (Bihar Act XVII of 1950), which was re-enacted as Bihar Act XVII of 1961. By that Act, the State Government was authorised to levy taxes on all passengers carried by motor vehicles and on goods transport by such vehicles at the rate of two annas in a rupee on all fares and freights. There are some other provisions dealing with the rate of taxes which are not material here. The Bihar Passengers and Goods Transport Tax Rules, 1950, contain detailed provisions for the levy, collection and assessment of such tax Every owner of a public service vehicle was required to register his name before the appropriate authority. He was required to issue tickets for passengers travelling in his vehicle (see Rule 9) in which the fare and the tax should both be shown. Similarly, for goods tickets (Rule 10), the freight and the tax were required to be shown. The tax is thus collected from the passengers and goods carried in the vehicles, and Rule 17 required the owner to pay the full amount of tax due from him in respect of a month within fifteen days from the expiry of the month. But Chapter V of the Rules required the owner to maintain a register of the tickets issued, and Rule 16 required him to furnish to the authority, in Form VII, within twenty days of the close of the month a return. On the basis of that return, the assessing authority assessed him to tax (see Section 13 of the Act and rule 22). Rule 23 provided for the issue of a demand notice on the assessee in Form XI, fixing a date for payment. The other provisions in the Act and the Rules are of an ancillary nature. The provisions in the Act and the Rules for the levy of penalty are meant to prevent the filing of incorrect returns and to see that the tax was paid within the due date: but, merely because the Act and the Rules provide for a machinery to ensure the prompt payment of full tax by the imposition of penalty or otherwise, the liability to pay tax under Rule 17 on the due date as provided in the Rules is not in any way weakened.
10. Thus, the scheme of the Act and the Rules is quite clear. Tax at certain rate was collected alone with the fare or freight from the passengers or goods by the owner of the vehicles while issuing tickets. Such tax so collected was required to be paid within fifteen days from the expiry of the month. But the owner was also required to maintain a register of the tickets issued and to submit a monthly return in Form VII within twenty days of the close of the month. On the basis of such returns, the assessing authority would finally assess the owner to tax and issue a demand notice for the balance payable. Thus, the duty on the owner to pay the tax did not depend on the issue of a demand notice. He was authorised to collect the tax from the passengers while issuing tickets, and he was required to deposit the entire sum collected in a month by the fifteenth of the next month. The return was to be submitted by him five days later under Rule 16. A perusal of Form VII would show that, in the return, he had to show (1) the amount of tax payable and (2) the amount of tax paid. This shows clearly that the return was to be submitted after the tax had been paid under Rule 17, and, in the demand notice in Form XI also, while calculating the total tax payable, the authority was directed to deduct the amount already paid, and then show the net demand. This transport tax thus is not of the same nature such as income-tax where, until the quantification of the tax by the appropriate authority, there may be some doubt as to what was the tax due. Here, however, the tax was at the rate of two annas per rupee on the fare which was collected from the passengers while issuing tickets, and it had to be deposited five days before the submission of the return. The Minister, therefore, was right in saying that the tax became due from the petitioner even before the issue of a demand notice on him. The furnishing of the return, assessment of the tax and the issue of demand are all meant by way of check with a view to ensure that all taxes due were properly collected; but it will not be correct to say that, until a demand notice is given under rule 23, the liability of the owner of the vehicle to pay does not arise. Under Rule 17, it arises within fifteen days from the expiry of the month for which the tax had been collected by the owner from the passengers and goods
11. The petitioner alleged in paragraphs 16 and 17 of his application that the passenger tax was due from him for the period 1950-51, when he was plying his vehicle on the Adalat Dinapur route. He admitted that, on the 9th July, 1951, he was called upon to produce accounts from April 1950, to March, 1951, and asked to show cause why he may not be assessed under the Bihar Passengers and Goods Transport Tax Rules. He stated that he showed cause on the 13th July, 1951, and that thereafter he did not get any intimation from the Patna Urban Circle, and was hence under the impression that no tax was due from him. He was taken by surprise, therefore, when, on the 4th March. 1965. he was called upon to pay a sum of Rs. 1,675 as passenger tax for the period 1950-51 (see An-nexure G); but he admitted that he paid that sum under protest on the 5th March, 1965. This statement of fact has been challenged by the other side. In this writ application, we are not called upon to decide this question of fact. If no passenger tax for the year 1950-51 was really due from the petitioner and the contents of the letter of the Commercial Taxes. Intelligence Branch, Memo No. 8527. dated the 24th July 1965, on which the Minister relied, are incorrect, the petitioner should have asked for time to adduce rebutting evidence, and should not have remained content with a purely legal argument that the tax was not due until the demand notice was served.
12. Lastly, Mr. Basudeva Prasad urged that the condition about production of clearance certificate of transport tax as given in Annexure A was based on a direction issued by the State Government under Section 43 of the Motor Vehicles Act (see Annexures M and N), and that the issue of such a direction, fettering the judicial discretion of the R.T.A. was illegal. He relied on B. Raiagopala Naidu v. State Transport Appellate Tribunal, Madras, AIR 1964 SC 1573, where it was held that the issue of a direction by the State Government under Section 43-A was of an administrative nature, and, if the decision of the Appellate Tribunal was based solely on the basis of the direction so issued, it must be struck down. This argument, however, will not apply to the facts of the present case. Annexure M is an order issued by State Government on the 27th August, 1960, in exercise of the power conferred by Section 73 of the Motor Vehicles Act, and it merely stated that the Authority may, in its discretion refuse to grant permit to a habitual defaulter in pay-merit of transport taxes who has wilfully neglected to pay the same. In the subsequent direction (Annexure N), dated the 27th May, 1963, which was issued under Section 43-A (Bihar Amendment), the State Government merely reiterated their previous direction and required the R.T.A. to insist on the filing of a clearance certificate from the Commercial Taxes Authority before the grant of a fresh permit. If the R. T. A. while ordering the grant of a permit to the petitioner in Annexure A, had abdicated their own function and merely referred to these two directions of the State Government and asked the petitioner to produce clearance certificate, there may be some justification for the comment that the R.T.A. did not exercise their quasi judicial functions and mechanically followed the instructions of the Government. This was what happened in the Supreme Court case, AIR 1964 SC 1573. At page 1581, their Lordships observed:
"If the Appellate Transport Authority had considered these matters on its own without the compulsory force of the impugned order, it would have been another matter; but the order pronounced by the Appellate Authority clearly and unambiguously Indicates that it held, and in a sense rightly that it was bound to follow the impugned order ......."
Hence, their Lordships held that the appellate order was passed solely on the directions issued by the Government under Section 4 3A.
13. Here, however, the facts are quite different. There is nothing in Annexure A to show that the S.B.R. T. A., while passing the order on the 15/16th January, 1965, made any reference whatsoever to the two Government instructions (Annexures M and N) or observed even impliedly that they felt themselves bound by these instructions. I have already shown that imposition of such a condition, while granting permit, is valid, being within the scope of the various matters to be legitimately considered by the R.T.A. under Section 47 of the Act. Hence, merely because they imposed such a condition, which, though otherwise proper and legal, is also supported by the principles laid down by the Government in their directions issued in Annexures M and N, the order cannot be struck down as invalid. Moreover, as pointed out in the earlier paragraphs, if the petitioner felt aggrieved against the imposition of this condition, he ought to have filed an appeal against the same, instead of attempting to fulfil the conditions and then urging before the Chairman, S.B.R.T.A., that he has so fulfilled them.
14. For these reasons, I see no merit in this application. It is, accordingly, dismissed with costs: hearing fee Rs. 200 payable to respondent No. 1 only, who alone seriously contested this application.
K.B.N. Singh, J.
15. I agree.