Punjab-Haryana High Court
Bharat Rattan Dr. Baba Sahib Bhim Rao ... vs State Of Haryana And Ors. on 6 January, 2005
Equivalent citations: (2005)140PLR504
Author: Jasbir Singh
Bench: Jasbir Singh
JUDGMENT G.S. Singhvi, J.
1. In these petitions, the petitioners have prayed for striking down Sub-rule (2C) of Rule 9 of the Punjab Passengers and Goods Taxation Rules, 1952 (for short, 'the Rules'), as applicable to the State of Haryana and also for quashing the notices issued by the concerned Assistant Excise and Taxation Officers (PGT) for recovery of the arrears of passenger tax.
2. In furtherance of the scheme (Annexure P1) framed by the State Government under Section 99 read with Section 100 of the Motor Vehicles Act, 1988 (for short, 'the 1988 Act') (which was published in the Haryana Gazette dated 3.11.1993) for grant of stage carriage permits to the Cooperative Transport Societies on link road not overlapping more than 10 kilometers on State or National Highways, the petitioners applied for grant of stage-carriage permits. In their applications, the petitioners had opted to pay passenger tax on a lump-sum basis. After processing their applications, the competent authority granted permits to the petitioners entitling them to operate on different routs. The permits granted to the petitioners have been renewed from time to time and they are currently operating bus service on their assigned routes including the extended routes. They have been paying passenger tax on lump-sum basis at the rates specified under Sub-rule (2 A) of Rule 9 of the Rules. Their grievance is that while they have been paying passenger tax at the prescribed rates, the concerned Assistant Excise and Taxation Officers (PGT) have issued notices for recovery of arrears of tax calculated in terms of Sub-rule (2C) of Rule 9 which was added vide notification dated 2.4.2002 and made effectively from the date on which the scheme was notified by the Transport Department.
3. The petitioners have challenged Sub-rule (2C) of Rule 9 of the Rules mainly on the ground that there is no provision in the Punjab Passenger and Goods Taxation Act, 1952 (for short, 'the 1952 Act'), as application to the State of Haryana under which the State Government can frame rules with retrospective effect and in the absence of such provision, the impugned rule cannot be applied with retrospective effect. Another ground taken by the petitioners is that the impugned rule is ultra vires to the provisions of the 1988 Act and 1952 Act, in as much as levy of enhanced tax with retrospective effect amounts to variation in the conditions of permit without giving them notice and opportunity of hearing. The petitioners have also questioned the notices issued by the concerned Assistant Excise and Taxation Officers (PGT) for recovery of the arrears of passenger tax by contending that they cannot be made to pay enhanced lump-sum tax with retrospective effect.
4. The respondents have defended Sub-rule (2C) of Rule 9 by asserting that the State Government has the power to make rules with retrospective effect. They have also questioned the locus standi of the petitioners by asserting that after having agreed to pay lump sum tax, the petitioners cannot question the vires of Sub-rule (2C). In the written statements filed on behalf of the respondents, it has also been averred that if the petitioners were to pay tax as per the sitting (seating?) capacity of the vehicles, then they will have to pay more than what is being charged on lump-sum basis.
5. The petitioners have filed replication reiterating their plea that enhanced lump sum tax cannot be charged with retrospective effect and further that the impugned sub-rule cannot be applied to the existing permit-holders.
6. We have heard learned counsel for the parties and perused the record. The first question which needs determination is whether Sub-rule (2C) of Rule 9 of the Rules could be made effective from the dates of the notification of the schemes framed by the Transport Department. Shri H.S. Sawhney, Senior Advocate appearing for the petitioners pointed out that there is no provision in the 1952 Act under which the State Government can frame rules with retrospective effect and argued that in the absence of any statutory provision empowering it to frame rules with retrospective effect, the State Government could not have made Sub-rule (2C) of Rule 9 effective from the date of the notification of the scheme by the Transport Department. Shri Jaswant Singh, learned Senior Deputy Advocate General, Haryana fairly conceded that there is no provision in the 1952 Act for giving retrospective effect to the rules framed by the State Government under Section 22, but submitted that the Court may not strike down the impugned rule because the government has taken a decision to implement the same with effect from 2.4.2002 i.e. the date on which the same was notified.
7. We have given serious thought to the respective arguments. It is settled law that a delegated or subordinate legislation cannot be given retrospective effect unless the parent statute confers such power on the rule-making authority. Therefore what we have to see is whether the State Government could have given retrospective effect to Sub-rule (2C) of Rule 9. Section 22(1) of the 1952 Act, which empowers the State Government to make rules, reads as under:-
"22. Power to make rules.- (1) The State Government may make rules, consistent with this Act, for securing the payment of tax and generally for the purposes of carrying into effect the provisions of this Act.
(2) XX XX XX XX XX"
A bare perusal of the above reproduced provision shows that the State Government can make rules, consistent with the provisions of the Act, for securing the payment of tax and generally for the purpose of giving effect to the provisions of the Act. The plain language of that section makes it clear that the State Government has not been invested wit the power to frame rules with retrospective effect. Therefore, there is no escape from the conclusion that Sub-rule (2C) which was inserted in Rule 9 vide notification dated 2.4.2002 could not have been made applicable from the date of the scheme was notified by the Transport Department i.e. 3.11.1993 and to that extent, the same is liable to be struck down.
8. The next question which merits consideration is whether the petitioners can be called upon to pay enhanced lump sum tax. The argument of Sh. Sawhney is that Sub-rule (2C) cannot be made applicable to the petitioners because they were granted permits much earlier. Shri Sawhney submitted that for the purpose of levy of enhanced tax, the petitioners cannot be treated at par with those who have been granted permits after 2.4.2002 or may be granted permits hereinafter. He relied on the judgment of the Division Bench in Gill Bus Service, Amritsar v. State of Punjab, A.I.R. 1993 P&H 281 and argued that the petitioners cannot be forced to pay lump sum tax at the enhanced rate of Rs. 20,000/- per month. Shri Jaswant Singh, Senior Deputy Advocate General, Haryana relied on the judgments of the Supreme Court in Venkateshwara Theatre v. State of Andhra Pradesh and Ors., 1995(96) S.T.C. 130; Goodricke Group Ltd. v. State of West Bengal and Ors., 1995(98) S.T.C. 32 and of Andhra Pradesh High Court in Alankar Theatre v. Entertainment Tax Officer, Warangal, 1991(82) S.T.C. 417 and argued that increase in the lump sum tax does not suffer from any legal or constitutional infirmity. He further argued that the petitioners cannot challenge the levy of passenger tax at the rate of Rs. 20,000/- per month on the ground of discrimination because the newly inserted sub-rule is being uniformly applied to all the permit-holders. Reiterating the objection taken in the written statements of the respondents that after having agreed to pay passenger tax on lump sum basis, the petitioners cannot turn around and question the levy of enhanced tax payable on lump sum basis, Shri Jaswant Singh submitted that they should be non-suited on this ground alone. In support of this submission, he drew our attention to para 10(iv) of the applications made by the petitioners vide which they had agreed to pay tax on a lump sum basis. Shri Jaswant Singh controverted the plea of discrimination raised by the petitioners and submitted that if Sub-rule (2C) of Rule 9 is held inapplicable to the existing operators, then a serious anomaly will be created inasmuch as, one set of permit holders will be required to pay passenger tax at the old rate i.e. Rs. 16,000/- per month (lump sum and another set of permit-holders will have to pay lump sum tax at the higher rate i.e. Rs. 20,000/- per month.
9. For appreciating the contentions of the learned counsel in a correct perspective, it will be useful to refer Rule 9(2), (2B) and (2C) of the Rules. The same reads as under:-
"9. Method of payment of tax.- (1) xx xx xx xx (2) Government may revise the lump sum rates mentioned in Sub-rule (1) from time to time. There upon the owner of a public carrier, contract carriage or stage carriage, liable to pay tax in lump sum, will have the right to exercise his option afresh.
(2A) Permit holders granted permit under the Haryana Government, Transport Department notification No. 90/C.A. 59/88/S. 100/93, dated 3.11.1993 for 53/54 sealer full body buses and 30 sealer mini buses, shall pay lump sum passenger tax on monthly basis to be calculated on a minimum of 200 kilometers per day operation and 50% assumed occupancy of the bus. The rate of lump sum passenger tax per month shall be as under:-
54 seater bus (ex- 52 sealer bus 30 seater bus cluding driver (excluding driver (excluding driver and conductor) and conductor) and conductor) ________________________________________________________________________
1. 2. 3.
________________________________________________________________________ Rs. 16,000/- Rs. 16,000/- Rs. 10,000/-
________________________________________________________________________ Provided that, in case of a bus for which a permit has been granted after the 10th day of any month under the aforementioned notifications of the Transport Department, the passenger tax on that bus shall be calculated for subsequent days for that month proportionately. (2B) Permit holders granted permit under the Haryana Government, Transport Department, Notification No. S.O.422/AT-I/C.A. 59/1988/8(3)100, dated the 19th January, 2001 for 52 or 54 sealer full body buses for 250 kilometers per day shall pay lump sum passengers tax on monthly basis to be calculated on above said mileage and 60% assumed occupancy tax per month shall be as under:-
Distance 54 seater bus 52 seater bus
(excluding drive (excluding driver
and conductor) and conductor).
________________________________________________________________________ 250 kilometers Rs. 35,000/- Rs. 35,000/-
________________________________________________________________________ (2C) The Transport Co-operative Societies permit holders which were allotted route permits under the 1993-94 scheme and have been given extension of routes upto 24 kilometers, shall pay the lump sum passenger tax per month at the following rates.
54 seater bus (ex- 52 seater bus 30 seater bus cluding driver (excluding driver (excluding driver and conductor) and conductor) and conductor)
________________________________________________________________________
1. 2. 3.
________________________________________________________________________ Rs. 20,000/- Rs. 20,000/- Rs. 14,000/-
________________________________________________________________________ The rates given in Sub-rules (2B) and (2C) shall be applicable from the dates the respective schemes were notified by the Transport Department."
Para 7 of notification dated 3.11.1993 vide which the scheme framed by the State Government under Section 99 read with Section 100 of the 1988 Act was notified, also reads as under:-
"7. Passenger tax would be charged from Private Operators on a lump sum monthly basis to be calculated on a minimum of 200 kilometers per day operation and 70% assumed occupancy of the bus."
A conjoint reading of para 7 of notification dated 3.11.1993 and various sub-rules of Rule 9 reproduced above makes it clear that as per the scheme notified by the State Government, the permit holders are required to pay tax on a lump sum monthly basis which can be revised by the State Government from time to time. In para 10 of the applications made by them for grant of permits, the petitioners had unequivocally agreed to pay passenger tax on lump sum basis and as a matter of fact, they have been paying passenger tax on lump sum basis at the rates specified in Sub-rule (2A) of Rule 9 which was inserted vide notification dated 14.7.1994. Therefore, they cannot now question the levy of lump sum tax at the rates specified in Sub-rule (2C) of Rule 9 of the rules which in view of the statement made by the learned Senior Deputy Advocate General, would be treated as effective from 2.4.2002, more-so because they have not challenged the vires of Rule 9(2) which entitles the State Government to revise the lump sum rates of tax.
10. We are further of the view that the petitioners are estopped from challenging the levy of passenger tax on lump sum basis at the rates specified in Sub-rule (2C) of Rule 9, because it is an undisputed position that they had applied for and accepted the permits with a clear understanding that they will pay passenger tax at the rates fixed by the State Government from time to time. In Civil Writ Petition No. 1991 of 1996, a Division Bench of which one of us (G.S. Singhvi, J.) was a member rejected similar plea by making the following observations:-
"It is, thus, clear that while making the application for grant of stage carriage permit, the petitioner had volunteered to pay tax on a lump sum basis. The petitioner must be deemed to be aware of the consequences of exercising option for payment of lump sum passenger tax and having exercised the option to pay lump sum tax, the petitioner cannot complain against the levy of passenger tax on lump sum basis by virtue of the amendment made in Rules, 1952. The petitioner, in our opinion, must be deemed to have given up its right to challenge the levy of passenger tax in lump sum. This view of ours finds support from the principle of law laid down in Panna Lal Binj Raj v. Union of India and Ors., A.I.R. 1957 S.C. 397; Manak Lal v. Prem Chand, A.I.R. 1957 S.C. 425, and Dr. G. Sarana v. University of Lucknow and Ors., A.I.R. 1976 S.C. 2428."
11. The plea of the petitioners that Sub-rule (2C) of Rule 9 cannot be applied to the existing permit-holders is clearly misconceived and is liable to be rejected because there could be no rational basis for classifying the permit-holders into two categories for the purpose of levy of passenger tax i.e. one who were granted permits prior to 2.4.2002 and the other to whom permits are granted after 2.4.2002. Any such classification would be totally irrational, arbitrary, unconscionable and grossly discriminatory resulting in violation of Article 14 of the Constitution of India.
12. The argument of Shri Sawhney that levy of lump sum tax at, an enhanced rate amounts to variation in the conditions of permit is violative of Section 80 of the 1988 Act is meritless and is liable to be rejected because the said Act has nothing to do with the levy of tax on passengers and goods which is regulated by the 1952 Act. We are further of the view that the levy of passenger tax in accordance with the provisions of the 1952 Act and the Rules framed thereunder will be deemed to be a condition of permit and the same cannot be treated to have been changed to the prejudice of the petitioners simply because the rate of tax was altered by the State Government in exercise of statutory power vested in it.
13. We have not discussed the judgments relied upon by the learned counsel for the parties because in none of those cases, the questions similar to the ones raised in these petitions were considered and decided.
14. In the result, the writ petitions are disposed of in the following terms:-
(i) Sub-rule (2C) of Rule 9 of the rules is struck down to the extent that it has been made applicable from the date of the notification of the scheme framed by the Transport Department. However, it is held that the said sub-rule will be operative w.e.f. 2.4.2002.
(ii) The petitioners are given liberty to challenge the demand of additional tax created by Assistant. Excise and Taxation Officers (PGT) by raising all legally permissible objections. If they file appeals within a period of one month from today, then the same shall be entertained and decided by the competent authorities in accordance with law.
Copies of the order be supplied dasti on payment of fee prescribed for urgent application.