Karnataka High Court
Tajusab Herur vs Regional Transport Officer on 24 January, 1996
Equivalent citations: ILR1996KAR1289, 1996(2)KARLJ524
ORDER Bharuka, J.
1. In this Writ Petition, prayer is for quashing of the Demand Notice dated 16.11.1995 issued by the respondent-Regional Transport Officer, demanding Rs. 43,500/- as arrears of composite tax payable by the petitioner for the period 1.10.1994 to 31.03.1996 in respect of 8 States (hereinafter referred to as the 'contiguous States') covered by the National Permit granted to the petitioner by the State Transport Authority of Karnataka.
2. The petitioner is the owner of the goods carriage bearing registration No. CTD 8492. He has, obtained a National Permit in respect of the said vehicle, which is valid upto 02.04.1999. Apart from Karnataka, i.e. the Home State, in terms of the National Permit, the petitioner was entitled to ply the vehicle in the contiguous States, namely, (1) Delhi (2) Maharashtra (3) Kerala (4) Tamilnadu (5) Gujarath (6) Rajasthan (7) Haryana and (8) Goa, on his payment of authorisation fee and composite road tax for the said States. He was granted authorisation for plying the vehicle in those States upto 30.09.1994. According to the petitioner, despite having National Permit he could not ply his vehicle in the contiguous States for the period subsequent to 30.09.1994 rather he opted to apply for cancellation of his National Permit itself. The grievance of the petitioner is that instead of cancelling the National Permit, the respondent has served the impugned demand notice, demanding composite taxes in respect of the contiguous States, as noticed above.
3. In the background of the facts noticed above, the legal issues which have fallen for consideration are:
(i) Whether despite holding of National Permit in respect of a goods carriage is it incumbent on the owner thereof to pay the authorisation fee and the composite tax of even contiguous States, despite his unwillingness to obtain such an authorisation to enable him to ply his vehicle in those States?
(ii) Whether the transport authorities of the Home State can insist for payment of authorisation fee and taxes leviable by the contiguous States, even though the owner has not applied for authorisation for a given period and as such, as a matter of fact, no authorisation has been granted?
4. In order to encourage long distance inter-State road carriages, the Parliament envisaged the concept of granting National Permits by incorporating Section 63 in the Motor Vehicles Act, 1939 (in short the 'old Act') and also framed consequential Rules known as Motor Vehicles (National Permits) Rules, 1975, (in short the 'old Rules'). Similar provisions have been incorporated for grant of National Permits in the Motor Vehicles Act, 1988 (in short the 'new Act') and the Central Motor Vehicles Rules, 1989 (in short the Central Rules).
5. Clause (38) of Section 2 of the new Act defines "permit" to, mean a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under the Act authorising use of motor vehicle as a transport vehicle. Clause (47) of Section 2 of the new Act defines "Transport vehicle" which includes a goods carriage. Clause (c) of Explanation to Section 88(14) of the new Act defines the "National Permit" in the following terms:
"(c) "national permit" means a permit granted by the appropriate authority to goods carriages to operate throughout the territory of India or in such contiguous States, not being less than four in number, including the State in which the permit is issued as may be specified in such permit in accordance with the choice indicated in the application."
6. Sub-section (12) of Section 88 of the new Act provides for grant of National Permits, which reads thus:
"Notwithstanding anything contained in Sub-section (1), but, subject to the rules that may be made by the Central Government under Sub-section (14), the appropriate authority may, for the purpose of encouraging long distance inter-State road transport, grant in a State, national permits in respect of goods carriages and the provisions of Sections 69, 77, 79, 80, 81, 82, 83, 84, 85, 86 and 89 shall, as far as may be, apply to or in relation to the grant of national permits."
7. Sub-section (14) of Section 88 of the new Act empowers the Central Government to make the Rules for carrying out the provisions of Section 88 and inter alia empowers the Central Government to provide for in the Rules for payment of authorisation fee payable for issue of National Permits. Under Clause (b) of the Explanation to this sub-section "authorisation fee" been defined in the following manner:
"(b) "authorisation fee" means the annual fee, not exceeding one thousand rupees, which may be charged by the appropriate authority of a State to enable a motor vehicle, covered by the permit referred to in Sub-section (9) and (12) to be used in other State subject to the payment of taxes or fees, if any, levied by the States concerned;"
8. Rules 86 to 90 of the Central Rules deal with granting of National Permits and authorisation. Rules 86, 87 and 88 being relevant for the present purpose, are extracted hereunder:
"86. Application for national permit - An application for grant of a national permit shall be made in Form 48 to the authority referred to in Section 69.
87. Form, contents and duration of authorisation.-(1) An application for the grant of an authorisation for a national permit shall be made in Form 46 and shall be accompanied by a fee of rupees five hundred per annum in the form of a bank draft.
(2) Every authorisation shall be granted in Form 47 subject to the payment of the taxes or fees, if any, levied by the concerned States.
(3) The period of validity of an authorisation shall not exceed one year at a time."
9. Under Section 81 of the new Act, which provides for duration of the permits granted under the Act, the permits which include National Permits have to remain effective without renewal for a period of five years; whereas the authorisation contemplated under Rule 87 provides that its validity cannot exceed one year at a time.
10. The word "authorisation" has not been defined either under the new Act or the Central Rules. But, it was so defined in Rule 2(b) of the Motor Vehicles (National Permits) Rules, 1975, in the following manner:
"Authorisation" means a document issued by an appropriate, authority to a public carrier authorising him to operate as a public carrier throughout the territory of India or in such contiguous States as are specified in the National permit granted to him."
10-A. From the definition of 'authorisation fee' as in Clause (b) of the Explanation to Section 88(14) of the new Act, it is clear that authorisation fee, subject to payment of taxes levied by the contiguous States, is charged in order to enable a motor vehicle covered by a National Permit to be Used in such other States. Rule 87 of the Central Rules provides for grant of authorisation in Form 47 on payment of the said fee and taxes. This Form is captioned as "AUTHORISATION - for Tourist Permit or National Permit." It contains the name of the State for which the authorisation to by the vehicle is granted as also a certificate of payment of composite fee/taxes in respect of States covered by the permit with all requisite details thereof. Therefore no authorisation in the statutory Form can be granted to the owner of the vehicle unless he pays the said composite fee/taxes and unless the vehicle is covered by such an authorisation, despite holding a National Permit it cannot be plied in the contiguous States.
11. Therefore, from the scheme of the new Act and the Central Rules, as well, it is quite apparent that even if the owner of a goods carriage is possessed of valid National Permit, he cannot ply his vehicle in the contiguous States unless valid authorisation has been obtained by him in accordance with the provisions of the Act and the Rules, so as to entail him to ply such vehicle in the territories of the contiguous States. It is also clear that though the National Permit has been given a life of five years, the authorisation has been contemplated to be only for one year at a time and at the option of the owner, it can be opted for any particular year during the life time of the National Permit.
12. From the aforesaid provisions, it is also quite clear that the owner of a goods carriage is required to pay the authorisation fee as also the composite tax of the contiguous States only if he intends to obtain the authorisation for a given period. Under somewhat a similar situation, while dealing with the provisions of the old Act, this Court in the case of K.T. DHARANENDRAIAH v. THE SECRETARY, KARNATAKA STATE TRANSPORT AUTHORITY,W.P. No. 6078 of 1984 DD 27.11.1985 has held that:
"9. The authorisation issued by the competent authority is a document under which the owner of the public carrier vehicle is authorised to ply his vehicle in the States indicated in the authorisation. There is nothing in the Section or the Rules which make it compulsory for the National permit holder to pay authorisation fee in respect of the States indicated in his application if he does not choose to operate outside the Home State. There is also no provision made in the Act to cancel such National permit if the operator does not obtain authorisation to ply his vehicle outside the Home State. This, no doubt, gives scope for plying outside the State under the guise of National permit."
13. In the said view of the matter, since in the present case admittedly the petitioner has not applied for grant of any authorisation for the periods subsequent to 30.09.1994, the respondent had no authority either under the provisions of the new Act or the Rules framed thereunder or under any other existing statutory provision to create demands like the one raised under the impugned" notice Annexure-A.
14. Accordingly, the impugned demands are quashed. But, it is clarified that if the authorities of the contiguous States find that the petitioner in any given period had plied his vehicle in their territories without authorisation or payment of composite taxes payable to those States, it will be open for them to initiate such penal and recovery proceedings as may be admissible under law. Subject to these observations the Writ Petition is allowed. There will no order as to costs.
15. Let a copy of this Order be handed over to Mr. D'Sa, learned Additional Government Advocate, for doing the needful.