Mahadev Transport Service vs State of Chhattisgarh and Others

Satish K. Agnihotri, J.—By this petition, the petitioner seeks quashing of the order dated 6-2-2012 (Annexure P/1) passed by the respondent Nos. 2 i.e. the Taxation Authority, Raipur, and further, to direct the respondent No. 2 and 3 to release the seized vehicle i.e. CG-04/ZA 0938. The facts, in brief, as projected by the petitioner are that the petitioner is engaged in business of plying buses. He had leased out his buses to Ambuja Vidya Peeth, Ravan, Balodabazar. The bus of the petitioner was deployed to carry employees/students from Ambuja Vidya Peeth, Ravan to Balodabazar. He was granted a valid permanent permit for plying his bus, bearing permit No. 27/07 which was valid up to 17-6-2012. The petitioner had been regularly paying his taxes to the authorities. On an audit objection made by the Accountant Genera], the respondent No. 2 issued a notice to the petitioner without assessment of the tax and opportunity of hearing and directed to pay a sum of Rs. 11,40,000/- failing which it was directed that action would be initiated against the petitioner under the provisions of section 16(3) of the Madhya Pradesh/Chhattisgarh Motoryan Karadhan Adhiniyam, 1991 (for short ''the Act, 1991''). Thereafter, his bus was seized by the authorities on 26-4-2012 (Annexure P/5).

Shri Bajpai, learned counsel appearing for the petitioner submits that the action of the respondent/State is illegal and arbitrary, without application of mind. The respondent No. 2 has no such power to issue notice and that too, on mere apprehension. The petitioner has not been afforded proper opportunity of hearing. He would next contend that without making proper assessment, no tax can be imposed. Thus, this petition seeking the aforestated relief''s.

On the other hand, Shri Moorthy, learned Deputy Advocate General appearing for the State/respondents would submit that the petitioner has not availed the alternative statutory remedy available under the Act, 1991. He would further submit that this Court was pleased to dismiss similar petitions being W.P.(T) No. 25/2012 on the ground of maintainability. He would further submit that so far as assessment is concerned, the notice dated 6-2-2012 was issued only after assessing the petitioner and this demand notice is not the subject-matter of the writ petition. Initially, the petitioner had claimed an incorrect benefit of the subsidized rate of tax @ Rs. 30/- per seat per quarter showing his vehicle to be a school vehicle. However, the audit party, while scrutinizing the case of the petitioner, came to the conclusion that as the petitioner had not submitted any registered lease deed demonstrating that his vehicle was being used as school bus, therefore, he was precluded from claiming the subsidized rate and was liable to pay the tax at the full rate i.e. Rs. 600/- per seat per quarter. Thus, a right assessment to the tune of Rs. 1,14,000/- was done.

Shri Moorthy would lastly contend that so far as seizure of the vehicle in question is concerned, the same was done under an independent proceeding as the bus was found being plied without having fitness certificate as well as any document showing payment of taxes. The fitness certificate annexed with this petition was never shown to the respondent authorities, and in fact, till date, the petitioner has not submitted any document in this regard. There is no illegality or irregularity in the act of the respondents. Thus, this petition may be dismissed.

Heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto.

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. u/s 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 6-2-2012 (Annexure P/1) is unsustainable in the eye of law.

Thus, the demand notice 6-2-2012 (Annexure P/1) 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.

The petitioner relies on the order dated 22-2-2002 (Annexure P/5) passed in W.P. No. 2299/2001 (Nirmal Singh v. State of Chhattisgarh and another), would submit that this Court has held that if the respondents have not passed any order of assessment and the vehicle of the petitioner has been seized, the vehicle deserves to be released forthwith.

In view of the aforestated facts and analysis, the petitioner is directed to produce the fitness certificate, as according to him, the petitioner was in possession of the fitness certificate when the vehicle was seized at the relevant time. If on inspection, it is found that the petitioner was in possession of the fitness certificate, the subject vehicle shall be released forthwith as the demand notice 6-2-2012 (Annexure P/1) has been quashed reserving liberty to the Taxation Authority to take a decision in accordance with law. The vehicle cannot be retained for such a long period. It is made clear that the petitioner shall ply the bus only after obtaining the necessary permission/certificate as per law.

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