Kanker Roadways vs State of Chhattisgarh and Another

Satish K. Agnihotri, J.—The petitioner challenges the legality and validity of the demand notice dated 8-6-2012 (Annexure P/7) on the ground that the same is illegal and unconstitutional, and further, to direct refund of the amount deposited by the petitioner under protest. The brief facts, as projected by the petitioners, are that the petitioner is a firm engaged in the business of plying buses under the Stage Carriage Permit. The petitioner was granted one inter-State Stage Carriage permit on 13-10-2009 for one of its vehicle i.e. Bus bearing registration No. CG-04-E-1638, duly counter-signed by the State of Jharkhand, on the route from Raipur to Daltenganj in Jharkhand. The said permit was modified on 6-1-2010 and a new vehicle bearing registration No. CG-04-E-2034 was substituted. The petitioner could not ply the bus on account of certain difficulties. The petitioner submitted his permit with the authorities on 3-12-2012 with various applications under Form M (Annexure P/2 collectively). According to the petitioner, the Naxalites made the road non-motorable. The petitioner deposited Form M every month with fee of Rs. 500/-. On 31-3-2011, a specific application under Form M was filed stating therein that the said bus was not plying under the permit. However, according to petitioner, after deposit of the permit, the same vehicle under different permit on different route was plying.

Shri Dubey, learned counsel appearing for the petitioner would submit that indisputably, the tax is payable under the provisions of Chhattisgarh Motoryan Karadhan Adhiniyam, 1991 (for short ''the Act'') read with Chhattisgarh Motoryan Karadhan Niyam, 1991 (for short ''the Rules'') demand dated 8-6-2012 (Annexure P/7). He would further submit that the demand notice dated 8-6-2012 was issued without following the procedure as laid down u/s 8 of the Act. Thus, the same deserves to be quashed with a direction to refund the amount deposited pursuant to the demand notice, under protest.

On the other hand, Shri Moorthy, learned counsel appearing for the State/respondents would submit that alternative statutory remedy u/s 20 of the Act. This Court, relying on the aforesaid provision, in W.P.(T) No. 25/2012 declined to entertain the writ petition on the ground that an appeal u/s 20 of the Act has to be availed before filing a writ petition. Shri Moorthy would also submits that notice was not given, however, proper assessment was made. It is further contended that the deposit of the tax amount was made not under protest. On the issue of opportunity of hearing, the return of the State/respondents is silent and no denial by the counsel also.

Having heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto, it is indisputable that section 8 of the Act contemplates filing of a declaration and determination of tax payable. Under sub-section 8(1) of the Act, a declaration has to be made by every owner with the Taxation Authority with the proof of payment of the tax which appears to be liable to pay in respect of such vehicle in such form and within such time as may be prescribed. Under sub-section (4) of Section 8 of the Act, if the owner fails to file a declaration required under sub-section (1) or (2), the Taxation Authority may, on the basis of information available with it and after giving to the owner an opportunity of being heard, by an order in writing determine the amount of tax payable by such owner suo motu and intimate the same to him in such form and within such time as may be prescribed. Further, sub-section (2) of Section 8 of the Act provides for making an additional declaration with the Taxation Authority and sub-section (3) of the Section 8 of the Act provides that the determination of the tax after making enquiry and after giving the owner an opportunity of being heard, by an order in writing the tax payable by the owner, in such form and within such time as may be prescribed. Thus, holding an enquiry giving opportunity of hearing before passing the order determining the tax, is mandatory.

For ready reference, section 8 of the Act, is reproduced below:

Filing of declaration and determination of tax payable. --

(1) Every owner, who is liable to pay the tax together with the proof of the payment of the tax which he appears to be liable to pay in respect of such vehicle in such form and within such time as may be prescribed.

(2) When any motor vehicle in respect of which tax has been paid is altered in such a manner as to cause the vehicle to become a motor vehicle in respect of which higher rate of tax is payable, the owner of such vehicle shall file an additional declaration with the Taxation Authority together with the certificate of registration and the proof of payment of difference of tax which he appears to be liable to pay in respect of such vehicle, in such form and within such time as may be prescribed.

(3) On receipt of the declaration under sub-section (1) or the additional declaration under Sub-section (2) as the case may be, the Taxation Authority may, on the basis of information available with it and after giving to the owner an opportunity of being heard by an order in writing, determine the amount of tax payable by such owner suo motu and intimate the same to him in such form and within such time as may be prescribed.

(4) Where the owner fails to file a declaration required under Sub-section (1) or (2) the Taxation Authority may, on the basis of information available with it and after giving to the owner an opportunity of being heard, by an order in writing, determine the amount of tax payable by such owner suo motu and intimate the same to him in such form and within such time as may be prescribed.

It is not the case of the State/respondents that notice was issued to the petitioner or any opportunity of hearing was afforded before issuing the demand notice. In that view of the matter, the demand notice dated 8-6-2012 (Annexure P/7) is unsustainable in the eye of law.

Thus, the demand notice 8-6-2012 (Annexure P/7) is quashed, reserving liberty to the Taxation Authority to initiate fresh process on the declaration made by the owner earlier, if any or suo motu in accordance with the provisions of section 8 of the Act, affording proper opportunity of hearing and pass an order, thereafter, for determination of tax and recover the same. This Court does not propose to express any opinion on the merits of the case. The Taxation Authority shall consider the entire facts on its own merits in accordance with law, as aforestated.

So far as direction to refund the amount paid by the petitioner is concerned, the same shall not be refunded back to the petitioner, however, after proper order of determination of tax is passed by the Taxation Authority, the same shall be adjusted.

Resultantly, the writ petition is allowed to the above extent. No order as to costs.