Birla Jute and Industries Ltd. vs The State of Rajasthan and Others

Rajesh Balia, J.—The petitioner is a public limited company and is a manufacturer of Cement in its Factory at Chittorgarh.

As a part of its business activity for transportation of lime stone from the pit heads of mine to the crushers, the petitioner placed six orders for supply of six HM 1035 type dumpers to the Hindusthan Motors Limited, Tiruvulur, Tamil Nadu. The dumpers known as rear dump trucks were sold to the petitioner fitted with E-3 tyres, 2.3 CUN body extension and front suspension on cylinder as is apparent from Annexure/5, the invoice. For the purpose of transportation from the place of despatch viz. Menallathur to Chiltorgarh body and tyres were dismantled and sent separately that is apparent from despatch challan Annexure/4. The ease of the petitioner further is that out of the said six dumpers, three dumpers were cleared in the last week of July, 1993 by the Ratanpur check Post of the Commercial Taxes Department without demanding any entry tax. Two dumpers were detained by the respondent No. 4, the Officer Incharge Commercial Taxes Department Check Post, Ratanpur on August 9, 1993 and remaining one dumper was on the way. By notice Annexure/6 dated August 11, 1993, the Officer Incharge of the Check Post informed the petitioner that the petitioner is importing Hindusthan Model 1035 Dump Trucks from Tamilnadu and the vehicles are liable to be permanently used and require registration within the State of Rajasthan. Therefore, on the entry of such dump-trucks within the local area in the State of Rajasthan, it is liable to pay tax u/s 3 of the Rajasthan Tax, on Entry of Motor Vehicles in the Local Areas Motor Vehicles Act, 1988 here in after to be called as ''the Act'' 1988.

The petitioner has challenged the detention of dump trucks and demand of Entry Tax.

Primary contention raised by the petitioner is that the Act of 1988 is ultra vires the Constitution in as much as it is nothing but an additional sales tax and not covered by Entry 52 of the State List of the Seventh Schedule of the Constitution of India.

The other questions which were raised in the petition were that the tax contemplaced under the Act is also violative of Article 301 and 304 of the Constitution of India. It was contended that sales having not taken place within the State of Rajasthan no tax can be levied on such transaction. This was by extending the argument that character of the tax under the act is of an Additional Sales Tax and not on Entry on the goods for use and consumption within the local areas.

It was also contended that dumpers are not Motor Vehicles within the meaning of definition of Motor Vehicles given under the Motor Vehicles Act, 1939 and the Act of 1988. It was also contended that Section 2(c) of the Act of 1988 makes a reference to the definition of Motor Vehicles given under the Act of 1939, the Act, of 1939 having been repealed the Act is left with no definition of Motor Vehicles, therefore, no tax can be levied.

At the outset it may be stated that while raising these contentions learned Counsel candidly stated that so far as the aforesaid contentions are concerned, a Division Bench of this Court in Rashid Mohd. v. State of Rajasthan and Anr. D.B. Civil writ Petition No. 3102/92 and 26 connected cases, decided on December 20," 1993 has negatived all the aforesaid contentions.

The Court held that the Act is intra vires the Constitution of India and does not suffer from any vice of colourable exercise of power. The enactment is fully covered under Entry 52 of the Second List (State List) of the Seventh Schedule of the Constitution of India.

The Court also held that though it is true that no corresponding amendment was made in the Act of 1988 that in place of Motor Vehicles Act, 1939, the Motor Vehicles Act, 1988 should be read bust so far as we are concerned, the definition of the ''Motor Vehicles'' as given in the new Motor Vehicles Act, 1988 u/s 2(28) is substantially the same therefore, the reference of Motor Vehicles Act, 1939 in the Act will not make much difference for the purposes of this Act and the incident of taxation.

In this connection it may be noticed that Motor Vehicle is the subject in respect of which tax is to be levied. The reference to definition of Motor Vehicles given in Motor Vehicles Act, 1939 was a legislative device adopted for the sake of convenience. The effect of such incorporation has succinctly been stated by Lord Esher M.R. In re Woods Estate, Ex parte Her Majesty''s Commissioners of Works and Buildings 1836) 31 CH.D. 607, as under:

If a subsequent Act brings into itself by reference some of the clauses of a former Act: the legal effect of that, as has often been held, is to writ those sections into the new act just as if they had been actually written in it.

The above principle was quoted with approval by their Lordships of the Supreme Court in Bolani Ores Ltd.,

Obviously, repealing of the Motor Vehicles Act of 1939 would not have affected the definition of Motor Vehicle incorporated in the Act of 1988 by reference.

Even otherwise if the reference of Motor Vehicles Act of 1939 in the definition clause of Act of 1988 is not considered to be a legislation by incorporation but merely by reference of law on, the subject generally than reference to such law means ''that law'' as it reads thereafter at the relevant time when the provision is to be invoked. Taking either view will not have affected the applicability of Act of 1988 to its subject ''Motor Vehicle'' whether defined in 1939 Act or Motor Vehicles Act 1988.

The Court further held by referring to M/s. Central Coal Fields Ltd. and Others Vs. State of Orissa and others, which explained the earlier decision of the Supreme Court in Bolani Ores. case(2), and Union of India and others, Vs. Chowgule and Co. Pvt. Ltd., etc. etc., , that dumpers are vehicles by holding that if dumpers can be adapted for use on the road, then they are motor vehicles for the purpose of taxation.

In addition to the aforesaid contentions, which were decided in Rashid Mohammed''s case (D.B. Civil Writ Petition No. 302/92), the learned Counsel raised following additional contentions for our consideration in the present petition.

The petitioner had imported the dump-trucks within the local area of the State of Rajasthan in knocked out condition which at the time of entry in the local area are not adapted for use as Motor Vehicles, therefore, it was not a Motor Vehicle within the meaning of definition of Motor Vehicles at the time of its entry in the local area. The incident of tax is on the event of entry. As at the time of entry the goods brought within the local area was not Motor Vehicles within the meaning of the Act, therefore, no event for charge of the tax u/s 3 of the Act arose.

Secondly, it was contended that necessary condition for imposition of tax u/s 3 of the Act is that the vehicle entering in the local area must be one which is liable for registration in the State under the Motor Vehicles Act 1939 (Central Act No. V of 1939) as on the date of the entry of the dumpers in the Stale of Rajasthan, Motor Vehicles Act 1939 stood repealed. It being a legislation by incorporation and there being no requirement of the vehicle being registered under the Motor Vehicles Act, 1939, which was no more in existence, no incident of tax arose under the Act.

In order to appreciate the contentions of the learned Counsel it would be relevant to reproduce the definition of ''Motor Vehicles'' and Section 3 of the Act as under:

2....

(2)(e)-"Motor Vehicle" mean a motor vehicle as defined in Clause (18) of Section 2 of the Motor Vehicles Act, 1939 and includes motor cars, motor taxi cabs, motor cycles, motor cycle combinations, motor scooters, motorettes, motor omnibuses, motor minibuses, motor vans, motor lorries, traitors and chassis of motor vehicles and bodies or tankers built or meant for mounting on chassis of motor vehicles, but excludes tractors."

Section 3 Incidence of Tax-(1)There shall be levied and collected a tax on the purchase value of a motor vehicle, an entry of which is effected into a local area for use or sale therein and which is liable for registration in the State under the Motro Vehicles Act, 1939 (Central Act 4 of 1939), at such rate or rates, as may be notified by the State Government from time to time but not exceeding the rates notified for motor vehicles u/s 5 of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act 29 of 1954) or fifteen per cent of the purchase value of a motor vehicle, whichever is less:

Provided that no tax shall be levied and collected in respect of a motor vehicle which was registered in any Union Territory or any other State under the Motor Vehicles Act, 1939 (Central Act 4 of 1939) for a period of fifteen months or more before the date on which it is liable to be registered in the State under the said Act.

(2) The tax shall be payable by an importer - (a) if he is a dealer registered or liable to be registered under the provisions of the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954), in the manner and within the time as tax on sales is payable by him under the said Act; and (b) if he is a person not covered by Clause (a), on the ate of entry of the motor vehicle into the local area, to the incharge of the entry check-post or the Commercial Taxes Officer of the area where he ordinarily resides or carries on any business or provides any service, and the provisions of the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954) as applicable to a registered dealer or casual trader shall, mutatis mutandis apply to such dealer or,as the case may be, such person.

(3) The tax shall be in addition to the tax levied and collected as octroi by any local authority within its local area.

Section 3 provides for incidence of tax. The incidence of tax arises on:

(1) Entry of a Motor Vehicle into a local area,

(2) Such entry is for use or sale of such vehicle within the local area and

(3) that, the vehicle is liable for registration in the State under the Motor Vehicles Act, 1939.

The undisputed facts are that the petitioner purchased that dump-trucks as one whole which is a Motor Vehicle suitable for use on road as held by this Court in Rashid Mohd.''s case (D.B. Civil Writ Petition No. 3102/92). There is also no dispute that the dumpers have been brought within the local area of State of Rajasthan their use as dump-trucks by the petitioner. The only contention raised in this regard concerning the goods being a Motor Vehicle is that the dumpers and the body was dispatched separately for the purpose of transportation.

In this connection it will be useful to refer to the definition of Motor Vehicle which not only incorporates the definition of ''Motor Vehicle'' given in the Motor Vehicles Act of 1939 but contemplates an extended meaning by using inclusive definition. It not only includes a chassis to which a body has not been adapted as defined in the Act of 1939 and not merely reference to vehicle adapted for use upon road but includes bodies or tankers built or meant for mounting on chassis of motor vehicles i.e. to say the ''definition given in the Act of 1988 is wider than embodied in the definition given in the Act of 1939 and is not restrictive to only those vehicles which have already been adapted for use On road as defined under the Motor Vehicles Act but also includes such things like bodies or tankers which may be mounted on chassis of Motor Vehicle which can be adapted for use after entry into the local area.

Moreover, as the Entry 52 of the Second List of the 7th Schedule of the Constitution under which the Act has been enacted, the emphasis is not on mere entry of the goods within the local area but the emphasis is on the entry of goods for use or sale within the local area. What is of crux is whether the goods brought within the local area are meant of use or sale as Motor Vehicles within the local area or not. it is not in dispute that the goods, beyond any question, were brought within the local area for its use as dump-trucks which has been held by this Court to be a Motor Vehicle.

There is yet another ground on which the contention of the learned Counsel in this regard cannot be accepted. It is not a case where the petitioner has purchased the parts of a vehicle separately and has brought in the local areas for its assemblage later on. It is a case where the petitioner purchased a Motor Vehicle viz. dump-trucks fitted with tyre and body as has been referred above with reference to invoice Annexure/5, produced with the writ petition, he has brought those very goods within the local area within the Slate of Rajasthan, albiet for the convenient transportation, some parts of that motor vehicle were dismantled, separately packed and brought separately. This does not alter the identity of the goods from the motor vehicles viz. dump-trucks to the vehicle parts for the purpose of the Act.

This is in view of the clear provision of the Act.

The first contention of the learned Counsel for the petitioner that because the vehicle was brought in the knocked out condition for the purpose of transportation, it cannot be treated as motor vehicle, being not well founded is rejected.

Coming to the second contention of the learned Counsel for the petitioner we are of the opinion that the said contention is also not well founded. It cannot be accepted that by making reference to the requirement of registration of the Motor Vehicle under the Motor Vehicles Act 1939, the Legislation was enacting a law by incorporating the provisions of registration under the Motor Vehicles Act, 1939 under the Act of 1988. The Act of 1988 is not dealing with the subject of registration of the vehicle. It was only making reference to the law relating to the registration of the vehicles generally i.e. merely a reference to the law on the subject generally. In this connection distinction has to be borne in mind that exists between a mere reference of gone statute into another and incorporation. In the former, a Notification repealing the referred statute or re-enactment of statute will also be effective for the statute in which it is referred. But in the latter case viz. in case the provision is incorporated any change in the incorporated statute by way of amendment or repeal does not affect the subsequent statute in which incorporation of an existing statute is made because the provision incorporate has to be read in the incorporating statute as they existed at the time of such incorporation.

This distinction has been well stated in Southerland Statutory Construction, (3rd Edition, Vol. 2 of P.550), as under:

A statute of specific reference incorporates the provisions referred to from the statute as of the time of adoption without subsequent amendments, unless the legislature has expressly or by strong implication shown its intention to incorporate subsequent amendments with the statute, in the absence of such intention subsequent amendment of the referred statute will have no effect on the reference statute."

"A statute which refers to the law on a subject generally adopts the law on the subject as of the time the law is invoked. This will include all the amendments and modifications of the law subsequent to the time the reference statute.

This principle was quoted with approval by their Lordship of the Supreme Court in Bajya v. Smt. Gopikubai and Anr. (4).

This was a case in which the Court was called upon to give a meaning of ''personal law'' with reference to succession referred to in Section 151 of the M.P. Land Revenue Code which came into force w.e.f. February 5, 1955. The contention that expression ''personal law'' referred to in Section 151 meant personal law as it existed on February 5, 1955, which dealt with the devolution of interest of a Bhumiswami or a Bhumidhari tenure-holder, as a provision dealing with the devolution of tenancy rights, was negatived in the following terms:

There are no words in that Section or elsewhere in the Code, which limit the scope of the expression "personal law" to that prevailing on February 5, 1955. On the contrary, the words "on his death" used in Section 151, clearly show that the legislative intent was that "personal law" as amended upto the date on which the devolution of the tenure holder''s interest is to be determined shall be the rule of decision.

In the The State of Madhya Pradesh Vs. M.V. Narasimhan, , the Apex Court after taking into consideration a host of earlier decision of the Supreme Court, Privy Counsel and many High courts summarised the principle of law by incorporation and exception which are admitted thereto in the following terms:

On a consideration of these authorities, therefore, it seems that the following proposition emerges:

Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases:

(a) where the subsequent Act and the previous Act are supplemental to each other;

(b) where the two Acts are in pari materia;

(c) where the amendment in the previous Act, if not imported in to the subsequent Act also, would render the subsequent Act wholly unworkable and ineffectual; and

(d) where the amendment of the previous Act, either expressly or by necessary intendment, applies the said provisions to be subsequent Act.

It may be noticed that one well recognised accepted principle that where a statute is incorporated by reference into a second statute the repeal of the first statute does not affect the second.

This principle has also been applied in New Central Jute Mills Co. Ltd. Vs. The Assistant Collector of Central Excise, Allahabad and Others, , where Section 12 of the Central Excise and Salt Act, 1944 has made reference to the provision of Sea Customs Act, 1878 for exercise of power by the Central Government under those provisions, subsequently, the Sea Customs Act, 1878 was repealed with enactment of Customs Act 1952 in which the provision of Section 172 of the 1878 Act were re- enacted and the powers which were earlier excercisable by the Magistrates were conferred on Asstt. Collector of Customs. The Court negatived the contention that Section 12 of the Act bodily liked and incorporated with the provisions of Customs Act by alluding the Section 158. The Court held as under:

Section 8(1) of the General Clauses Act provides that where any Central Act, repeals and re-enacts with or without modification, any provision of a former enactment, then references in any such enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re- enacted. By virtue of this provision it cannot be disputed that in Section 12 of the Act the Customs Act, 1962 can be read in place of the Sea Customs Act, 1878.

In this connection it will also be profitable to reproduce Section 8(1) of the General Clauses Act, 1897:

Section 8(1). Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted:

The aforesaid provision clearly poastulates while interpreting the Statute in which the reference of another statute has been made and that statute if repealed and re-enacted then, the statute in which the provision has been referred shall be construed as reference to re-enacted Act.

Keeping in view the aforesaid principles, if one looks at the provisions of Section 3 of the Act, it leaves no room of doubt that the Act of 1988 does not deal with the subject of registration. It only makes reference to requirement of registration of the vehicle which is being brought to the local area for the use or sale therein under the general law of registration of vehicles embodied under the Motor Vehicles Act of 1939 which was then prevailing.

It is not a case of incorporation of the provisions of registration under Motor Vehicles Act of 1939 into the Act of 1988. It may also be noticed that Motor Vehicles Act 1939 was repealed and re-enacted in 1988, which came into force from July 1, 1989. Therefore, in the case of repealing and re-enactment of Central Act, the provision of Section 8(1) of the General Clauses Act are fully applicable unless intention to the contrary can be read into provision of Section 3 of the Act of 1988. Looking to the provisions for which reference has been made to Motor Vehicles Act, 193? in Section 3 of the Act, we are of the opinion, that no intention to the contrary envisaged u/s 8(1) of the 2 General Clauses Act can be read thereunder.

The question of requirement of registration of vehicle is to be examined with reference to time of its entry in the local area of the State of Rajasthan with intend to use of safe therein. If on use or sale thereof, the vehicle is liable to be registered in accordance with the relevant law applicable to the registration of the vehicle, the last condition of changing section stands fulfilled.

If in place of repealed provisions of Motor Vehicles Act of 1939, re-enacted provisions of Motor Vehicles Act of 1988 are not incidental in Section 3 of the Act of 1988 in question, the whole Act, in which reference to requirement of registration of vehicle has been made, will be rendered unworkable and ineffectual. In such circumstances, the general rule of interpretation as to incorporated statute does not apply and admits of exception. Even taking it to be a case of incorporation, it falls in the exception(c) pointed out by their Lordships of the Supreme Court in State of Madhya Pradesh''s case (5), as reproduced above.

Thus viewed from any angle, the contention of the learned Counsel also is not sustainable.

Lastly, it was contended by the learned Counsel for the petitioner that at any rate the dumpers cannot be detained at the check post and tax could be assessed and collected even after the vehicle reaches the destination, through appropriate proceedings under the Act.

This question in our opinion need not be decided in the present case inasmuch as, it would be academic in the present case.

The petition was filed on August 16, 1993. On August 17, 1993 this Court ordered that dumpers should be released provided the petitioner furnishes a Bank guarantee for the amount of the entry tax liability within one week to the satisfaction of respondent No. 2. In terms of the said Order, the dumpers have already been released and the liability under the Act can now be determined and be recovered from the petitioner in accordance with law. The question of detention is now no more at issue.

As result of the aforesaid discussion, this petition fails and is hereby dismissed. There will be no order as to costs.