K.N. Sreekantaiah vs Dy. Transport Commr. Bangalore and Another

Venkataramiah J.-Since a common question of law arises for consideration in all these cases we find it convenient to dispose them of by this common order.

The petitioners are owners of motor vehicles which are registered under the Motor Vehicles Act, 1939 (hereinafter referred to as the M.V. Act) either as stage carriages or as contract carriages Some of the vehicles were covered by stage carriage permits authorising their owners to use them as stage carriages on certain specified routes. None of the vehicles in question was however covered by a contract carriage permit issued under the M.V. Act. But the said vehicles were used during the relevant period as transport vehicles for carrying passengers under permits issued under S. 63(6) of the M.V. Act (hereinafter referred to as special permits). The owner of such a vehicle had to pay Rs. 35/- per quarter (for three months) by way of tax for every seated passenger (other than, the driver and the conductor) which the vehicle was permitted to carry, under S. 3 of the Karnataka Motor Vehicles Taxation Act, 1957 (hereinafter referred to as the Taxation Act) read-with Item 4 (iii) (a) of PartA of the Sch. to the Taxation Act. By Karnataka Motor Vehicles Taxation (Amendment) Act, 1972, (hereinafter referred to as the Amending Act) item 4 of the Schedule to the Taxation Act was amended by substituting the words ''motor vehicles plying for hire'' by the words "motor vehicles other than those mentioned in item 4A plying for hire" and alter item 4 a new item 4A was introduced which read as follows:

"4A. Motor vehicles plying for hire or reward used for transport of passengers in respect of which contract carriage permits have beenissued under the Motor Vehicles Act, 1939, and permitted to carry more than five persons excluding the driver, for every passenger which the vehicle is permitted to carry- Rs. 100/-.

Some motor vehicle operators filed writ petitions before this Court questioning the constitutional validity of item 4A. This ''Court by its decision dated 16-4-1973 in B.A. Jayaram v. State of Mysore, (1973) 1 Mys. L.J. 459 and connected cases declared that item 4A was unconstitutional and itwas not open to the Government to collect tax at the rate specified in in item 4A. The State Government appealed against the decision of this Court to the Supreme Court. The Supreme Court by its decision rendered on 12-11-74 in State of Kar. v. D.P. Sharma, AIR 1975 SC. 594, allowed the appeals and declared item 4A in Part A of the Schd, to the Taxation Act as valid. After the judgmt. of this Court declaring item 4A as unconstitutional the owners of vehicles which were covered by contract carriage perm paid tax at the rate prescribed in item 4 (iii) (a) as they were doing prior to the introduction of item 4A by Karnataka Act 6 of 1972 i.e. at the rate of Rs. 35/- per quarter for every seated passenger (other than the driver and conductor) which the vehicles were permitted to carry. Afterthe decision of the Supreme Court, the concerned Licensing Officers issued notices of demand to the owners of such vehicles to may the difference between the rate of tax prescribed in item 4A and the ruleprescribed in item 4(iii) (a). Same of them questioned the validity of the notices of demand issued to them in the writ petitions filed before this Court in M. Subbe Gowda v. Deputy Transport Commissioner, Mysore, WP. 10369/78 dt. 16-1-79. The said petitions were dismissed. In those cases we upheld the validity of the notices of demand issued to owners of vehicles which had been covered by contract carriage permits during the relevant time.

While issuing notices of demand as mentioned above to owners motor vehicles covered by contract carriage permits, the Licensing Officers also issued similar notices of demand to the petitioners herein whose motor vehicles had been either registered as stage carriages or contract carriages at the time of registration of those vehicles, but had not been covered by contract carriage permits during the relevant time. The petitioners herein had operated the vehicles in question under special permits issued under S. 63(6) of the M.V. Act after paying the tax in accordance with item 4 (iii) (a) of Part A of the Schedule to the Taxation Act. Against such notices of demand, the petitioners filed appeals before the appropriate Deputy Transport Commissioner. The Deputy Transport Commissioners dismissed the appeals holding that even the motor vehicles which had been operated under permits issued under S. 63 (6) of the M.V. Act were governed by item 4A. But they however ordered pursuant to the Government Notification No. RD 68(A) TMT 72, dated 13-10-1972 issued under sub-sec. (1) of S. 16 of the Taxation Act which directed in the case of vehicles covered by special permits collection of Rs. 70/- per quarter per seated passenger instead of Rs. 100/-as per item 4A, that the petitioners may pay the difference between the reduced rate prescribed by the notification and the rate at which they had already paid tax while obtaining special permits. Aggrieved by the orders of the Deputy Transport Commissioner, the petitioners have filed these writ petitions. On a reference by the learned single Judge before whom the petitions came up for hearing, they have been posted before this Division Bench for disposal.

The principal contention urged on behalf of the petitioners is that item 4A would be applicable only to motor vehicles plying for hire or reward used for transport of passengers in respect of which contract carriage permits have been issued under the M.V. Act and permitted to carry more than five persons excluding the driver and since the contract carriage permits had not been issued in respect of the vehicles in question and they had been operated only under special permits issued under S. 63(6) of the M.V. Act, the notices of demand issued to them and the Government Notification referred to above prescribing the rate of tax at Rs. 70/- instead of Rs. 35/- prescribed by item 4 (iii) (a) were both unauthorised.

The necessity for permits and the procedure to be followed in the regard are to be found in Chapter IV of the M.V. Act. S. 42 provides that no owner of a transport vehicle shall use or permit it to be used in any public place (whether or not such vehicle is actually carrying any passenger or goods) save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used. Ss. 46 to 48 deal with the procedure to be followed in the case of issue of stage carriage permits. Ss. 49 to 51 relate to the applications for contract carriage permits Secs. 52 and 53 relate to private carrier''s permits. Ss. 54 to 56 relate to the grant of public carrier''s permit. S. 57 prescribes the procedure to be followed in applying for and granting of contract carriage permits private carrier''s permits and stage carriage permits. S. 58(1) provides that a State carriage permit or a contract carriage permit other than a temporary permit issued under S. 62 shall be effective, without renewal for such period, not less than three years and not more than five years, as the Regional Transport Authority may specify in the permit. S. 59 prescribes the general conditions attaching to all permits and S. 59A prescribes the general form of permits other than temporary permits issued under S. 62. S. 60 deals with the procedure to be followed by the Transport Authority which granted the permit before ordering its cancellation or suspension. S. 61 deals with the procedure for transfer of permit on the death of the holder to the person succeeding to the possession of the vehicle covered by the permit. S. 62 deals with the procedure for issue of temporary permits. S. 63(1) provides that except as may be otherwise, prescribed, a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region, unless the permit has been countersigned by the Regional Transport Authority of that other region, and a permit granted in any one State shall not be, valid in any other State unless countersigned by the State Transport Authority of that other State or by the Regional Transport Authority concerned. Sub-sec (6) of S. 63 states that notwithstanding anything contained in sub-sec. (1), but subject to any rules that may be made under this Act, the Regional Transport Authority of any one region may, for the convenience of the public, grant a special permit in relation to a public service vehicle for carrying a passenger or passengers for hire or reward, under a contract, express or implied, for the use of the vehicle as a whole without stopping to pick up or set down along the line of route passengers not included in the contract, and in every case where such special permit is granted, the Regional Transport Authority shall assign to the vehicle, for display thereon, a special distinguishing mark in the form and manner specified by the Central Government and such special permit shall be valid in any other region or State without the countersignature of the Regional Transport Authority of the other region or of the State Transport Authority of the other State, as the case may be.

The relevant portions of Rule 127 of the Karnataka Motor Vehicles Rules, 1963, which is framed pursuant to the power conferred on the State Government by Section 63(6) of the M.V. Act read as follows:

"127. Rules for grant of Special Permits.-(1) Every application for the grant of a special permit in relation to a vehicle under sub-Section (6) of Section 53 of the Act ..... shall be sent to the Regional Transport Authority of the Region in which the vehicle is ordinarily kept.

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(3) On being satisfied that the application is for bonafide purposes the Regional Transport Authority or the Secretary to the Regional Transport Authority, as the case may be, may grant a special permit to the applicant.

Explanation.-For the purpose of this rule it shall be deemed to be a bona fide purpose, if the transport vehicle is used for the purpose of tour by tourists, foreign and home or by marriage parties, or by pilgrim parties.

(4) It shall not be necessary for the Regional Transport Authority or its Secretary, as the case may be, to, follow the procedure laid down in Section 57 of the Act.

(5) Every special permit shall be in Form No. 62 ''Spl. Permit''.

(6) As soon as may be after the grant of a special permit to an applicant the Regional Transport Authority or its Secretary, asthe case may be shall intimate the fact to the Regional Transport Authorities of the Regions to be visited by the vehicle.

(7) Every Special permit granted under these rules shall be valid and effective for such period as is specified in such permit not in anycase exceeding three months: Provided that, the duration of operation of such permit may if necessary, be extended for a period not exceeding one month.

(8) If before the expiry of the period of the special permit granted under sub-rule (5), it is intended to visit places, in addition to, or other than those indicated in such permit, the person in charge of the vehicle or any of the persons engaging the vehicle, and acting on behalf of all of them present an application in form ''Special Permit Application'' along with the permit granted under sub-rule (5), to the Regional Transport Authority having jurisdiction over the place or places intended to be visited, whichever is nearer, setting forth the reasons for such alteration or addition.

(9) On receipt of an application under sub-rule (8), the Regional Transport Authority or its Secretary, as the case may be, after satisfying itself or himself that the application is in order, make such alterations or additions as are necessary in respect of the permit.

(10) Every alteration or addition in permits made under sub-rule (9) by a Regional Transport Authority or its Secretary, other than the Regional Transport Authority, or its Secretary who granted the permit under sub-rule (5) shall as soon as may be after it is made, be intimated by such authority or its Secretary to the Regional Transport Authority or its Secretary who granted the permit and the Regional Transport Authorities of the regions having jurisdiction over the places originally intended to be visited and also places altered or added.

(11) The Authority issuing a special permit shall issue in addition, a special mark specified in appendix V to the rules which the person in charge of the vehicle shall cause to be displayed, on the wind-screen of the vehicle in such manner as to be clearly visible to a person standing in front of the wind-screen."

Rule 127 provides more or less a complete code governing special permits in so far as the procedure to be followed in making the application, the form in which the permit should be issued, the duration of such permit and the procedure to be followed if the holder of the permit proposes to extend the journey beyond the regions in respect of which the permit has already been issued. Rule 127(7) states that every permit granted under that rule shall be valid and effective for such period specified in such permit not exceeding three months; provided that the duration of operation of such permit may, if necessary, be extended for a period not exceeding ones month. The holder of a special permit need not obtain the countersignature of that permit by the Regional Transport Authorities of the other regions to be visited by the vehicle. Sub-rule (8) of Rule 127 provides that before the expiry of the period of the special permit if it is intended to visit places in addition to or other than those indicated in such permit, the person in charge of the vehicle or any of the persons engaging the vehicle and acting on behalf of all of them, may present an application in form ''Special Permit Application'' along with the permit granted under sub-rule (5) to the Regional Transport Authority having jurisdiction over the place or places intended to be visited whichever is nearer, setting forth the reasons for such alteration or addition. It is clear from the foregoing that the special permit issued under S. 63(6) of the M.V. Act read-with R, 127 of the Karnataka Motor Vehicles Rules, 1963, is different from a contract carriage permit. That was also the view taken by Jagannatha Shetty, J. in S.R.M.S. Tourist Service Co. v. Secretary, R.T.A, (1975) 1 Kar.L.J. 395.

Item 4A of Part A of the Schedule to the Taxation Act which applies to vehicles covered by contract carriage permits cannot, therefore be applied to vehicles operated under special permits issued under S. 63(6) of the M.V. Act. The Licensing Officers and the Deputy Transport Commissioners were, therefore, in error in issuing notices of demand to the petitioners herein to pay additional tax pursuant to item 4A Part A of the Schedule to the Taxation Act or the Government Notification referred to above.

In the result, we allow these petitions and quash the impugned notices of demand and the orders of the Deputy Transport Commissioners.

It was admitted by learned counsel that in the cases of some of the vehicles concerned in these petitions, contract carriage permits had been obtained during the relevant period and that in cases of those vehicels, tax had to be Paid in accordance with item 4A. We make it clear that our order does not prevent concerned Licensing Officers from recovering tax in cases of such vehicles at therate prescribed in item 4A by issuing fresh notices of demand for the period during which they had been covered by contract carriage permits. No costs.