State Of Madhya Pradesh & Others vs M/S Suvida Services & Others

This judgment shall dispose of Writ Appeal Nos. 689/2017, 695/2017, 696/2017, 700/2017, 703/2017 and 431/2018 also. Since the issue raised is

common in all the cases, both the facts and documents relied upon are taken from Writ Appeal No. 686/2017. The respondent in the appeal will be

called as ‘writ petitioner’ hereinafter.

2- This appeal is directed against an order passed by the learned Single Bench relegating the writ petitioner, respondent No.1 herein, to the statutory

remedy of appeal without insisting upon the pre-deposit of the amount of Tax and penalty by the writ petitioner, but to pay the Tax as per the rates

applicable to the vehicles of the educational institutions.

3- The writ petitioner claims to be sole proprietor firm engaged in business of transportation. The vehicle in question bearing number MP04-PA-1356,

is registered with Transport Department, Bhopal and has a fitness certificate and insurance policy. As per the registration certificate, Manish Saxena,

the sole proprietor â€" writ petitioner is reflected as the registered owner of the vehicle.Â

4- In response to a Notice Inviting Tender issued by Bharat Heavy Electricals Limited, Bhopal (for short ‘BHEL’) to avail the services of

Transport Contractors/Travel Agencies for deploying upto 24 buses of 52 seater on rate contract for providing transport facility to the ward of BHEL

employees, the writ petitioner applied and was the successful contractor. The work order was issued in his favour. The stand of the writ petitioner is

that though he is recorded as the owner of the vehicle, whereas the school is mentioned as the lessee in the Registration Certificate. The writ

petitioner thereafter started plying the vehicle i.e. deployed the bus for transporting the students of the respondent school. Since the writ

petitioner’s bus was being used for educational institution, he paid the Tax under Entry 8 of the 1st Schedule of the Madhya Pradesh Motoryan

Karadhan Adhiniyam, 1991 (for short the ‘Act’).

5- A notice was issued on 18.12.2015 that the bus is not being used for educational purposes, therefore, as to why the Tax should not be imposed as a

‘Contract Carriage’, as mentioned in the 1st Schedule. The stand of the petitioner in the reply to the show cause notice was that the bus was

deployed for providing transportation to the wards of employees of BHEL, and the bus was not being used separately for BHEL. After considering

the reply filed, an order was passed by the Taxation Authority on 22.12.2015, demanding Tax @ Rs. 600/- per seat. Thus an amount of Rs. 9,04,995/-

was sought to be payable by the petitioner.

6- The writ petitioner filed an appeal against the said order. The said appeal was dismissed for the reason that the petitioner has not complied with the

condition of pre-deposit of Tax in terms of Section 20 of the Act, vide order-dated 25.1.2017. It is the said order which was subject matter of

challenge before the writ Court. The writ Court has directed the appellate authority to decide the appeal without insisting upon predeposit of the Tax

amount. It is the said order which is assailed by the State in the present appeals.Â

7- Section 20 of the Act reads as under:

“20. Appeal. - any person,-

(a) aggrieved by an order made for levy of tax or for penalty imposed under Section 13, or

(b) aggrieved by the seizure of motor vehicle made under Section 16, or

(c) aggrieved by any order passed under this Act, may, within the prescribed time and in the prescribed manner appeal to the prescribed authority,

who shall, after giving such person and the Taxation Authority an opportunity of being heard, dispose of the said appeal and the decision thereon shall

be final:

Provided that no appeal shall be entertained unless the amount of tax and penalty levied, in respect of which the appeal has been preferred has been

paid.â€​

9- Learned counsel for the appellant refers to the Supreme Court judgment reported as State of Haryana Vs. M/s Maruti Udyog Limited and others,

(2000) SCC 348, wherein a Full Bench of Punjab and Haryana High Court reported as M/s Emerald International Limited, Ludhiana Vs. State of

Punjab and others, (2001) 122 STC 382, was quoted with approval. In Emerald International Limited (supra), the Court was considering the right of

appeal without predeposit of Tax as warranted under Section 20 of the Punjab General Sales Tax Act, 1948, and under section 39 of the Haryana

General Sales Tax Act, 1973. Though the language of the two statutes is different, but substantially the provisions contemplate that appeal shall not be

entertained subject to pre-deposit of the tax as detailed therein. The Court referred to various judgments such as Smt. Ganga Bai Vs. Vijay Kumar

and others, AIR 1974 SC 1126; Anant Mills Company Limited Vs. State of Gujarat and others, AIR 1975 SC 1234; Seth Nand Lal and Another Vs.

State of Haryana and others, AIR 1980 SC 2097; Shyam Kishore and others Vs. Municipal Corporation of Delhi, 1993 (1) SCC 22; and other

judgments and held as under:-Â Â

“33. As a sequel to our discussion on the question of law referred to us the following conclusions can be deduced:Â

(a) The appeal is a creation of a Statute and in case a person wants to avail of the right of appeal, he has to accept the conditions imposed by the

Statute.Â

(b) The right of appeal being a creature of Statute, the legislature could impose conditions for exercise of such a right. Neither there is a constitutional

nor legal impediment for imposition of such a condition.Â

(c) The right of appeal is neither natural nor inherent attaching to a litigation and such a right neither exists nor can be assumed unless expressly given

by the Statute.Â

(d) Even if, this Court was to interpret the bare provisions of two Statutes, i.e.. the Punjab General Sales Tax Act, 1948 and the Haryana General

Sales Tax Act, 1973, it could safely be held that there is a complete bar to the entertainment of an appeal by the appellate authority without the

payment of tax amount unless the authority is satisfied that the dealer is unable to pay the amount so assessed and only in that situation the appellate

authority for the reasons to be recorded in writing can entertain the appeal without deposit of the payment of such amount.Â

(e) Neither on the wording nor in view of the spirit of the Punjab and Haryana Acts it is possible to hold that the appellate authority should see the

prima facie nature of the case while hearing the stay matter.Â

(f) The factum of tax assessed being illegal cannot be a relevant consideration for grant of stay by an Appellate Authority.Â

(g) The High Court in exercise of its jurisdiction under Article 226 of the Constitution of India in rarest of the rare cases in the given facts and

circumstances, can grant stay and waive the condition of pre-deposit of tax and the existing alternative remedy in such circumstances would be no

ground to refuse interference.â€​

10- In the case of M/s Maruti Udyog Limited (supra), against an order passed by the Division Bench of Punjab and Haryana High Court directing to

entertain an appeal on furnishing of Bank guarantee by M/s Maruti Udyog Limited, it was held as under:

“11. The Act has been enacted and the right of appeal provided with a dual purpose of protecting the interests of the assessee and also to

safeguard the interests of the Revenue. The provision appears to have been made to explore further sources for raising Revenue of the State. This

Court in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd, (1985) 1 SCC 260: (AIR 1985 SC 330) observed

that ""..No governmental business or for that matter no business of any kind can be run on mere bank guarantees. Liquid cash is necessary for the

running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance

to realise that interim orders ought not to be granted merely because a prima facie case has been shown. More is required.""Â

12. In the instant case the prayer was made to grant stay on the ground that ""the petitioner has not collected any additional tax from the customers

and is unable to deposit the amount of additional demand created by patently illegal orders"". The respondent Company nowhere mentioned to or

referred its inability to pay the amount on account of its alleged financial difficulties or incapacity to make the requisite payment. The legality of the

additional demand created could not be made the basis for insisting to entertain the appeal without prior payment, as that would have required the

determination on the merits of the appeal. Relying upon the Full Bench judgment of the jurisdictional court in M/s Emerald International Ltd's case,

(1997 STI 113) (Punj and Har), the Tribunal was competent in passing the order (Annexure P-8) which was impugned in the High Court. The Division

Bench of the High Court was not justified in ignoring the Full Bench judgment and the judgment of another Bench of coordinate jurisdiction while

allowing the writ petition of the Company. The Division Bench even failed to mention the circumstances which justified the passing of the order for

allowing the writ petition with direction to the Tribunal for disposal of the appeal on furnishing of the bank guarantee by the Company. Merely because

the Tribunal had insisted upon the payment of the amount in terms of proviso to Sub- section (5) of Section 39 of the Act, should not have annoyed the

Court while granting the relief in exercise of its powers under Article 226 of the Constitution. The impugned order being contrary to settled principles

of law cannot be sustained and is accordingly set aside.â€​

11- In the case reported as Narayan Chandra Ghosh Vs. UCO Bank and others, (2011) 4 SCC 548, while considering the right of appeal before the

Debt Recovery Appellate Tribunal under The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002

(for short ‘2002 Act’), the Court held as under:-

“8. It is well-settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise

of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind

the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of predeposit under

sub-section (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section

18 of the Act. In that view of the matter, no court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the

provisions of the statute. We have no hesitation in holding that deposit under the second proviso to Section 18(1) of the Act being a condition

precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the

appellant to comply with the said mandatory requirement.â€​

12- Shri Amit Seth also relied upon the Full Bench judgment of this Court reported as New India Assurance Company Limited Vs. Smt. Savita Sen

and others, 2004 (2) MPLJ 445, wherein while considering the right of appeal under the Workmen’s Compensation Act, 1923, it was held that

such condition has to be complied with. Relevant extract reads as under:-

“30. At the cost of repetition, we would like to mention that Workmen's Compensation Act, 1923 is a beneficial legislation in the field of Labour

Laws. Though, general rule of interpretation of a statute is that ordinary and natural meaning has to be given to the words and language used by the

Legislature, but while interpreting a provision of beneficial legislation, the Courts are duty bound to interpret the provisions in such a manner that it not

only advances the cause of justice but also helps in achieving the object sought to be achieved by the Legislature in enacting the said Law. In the

above backdrop and considering the object sought to be achieved by the Legislature in adding third proviso to section 30(1) of the Act, to ensure the

compliance of the award and disbursement of amount of compensation to the workmen without any procedural inconvenience and delay, we are in

complete agreement with the view taken by Kerala, Karnataka, Andhra Pradesh, Patna, Orissa and Punjab and Haryana High Courts holding that the

third proviso of section 30(1), of the Act, is applicable to the appeal filed by the Insurer also.â€​

13- Reliance is also placed upon another Division Bench judgment of this Court reported as Khemkaran s/o Tarachand Sanodiya Vs. Union of India

and others, 2005 (3) MPLJ 45, wherein it has been held as under:-

“5. The scope of a statutory right, as against a fundamental right or equitable right, is described thus by the Supreme Court, though in a different

context, in Jyoti Basu v. Debi Ghosal, AIR 1982 SC 983:Â ""Outside of statute, there is no right to elect, no right to be elected and no right to dispute

an election. Statutory creations they are, and therefore, subject to statutory limitations... It is a statutory proceeding to which neither the common law,

nor the principles of equity apply but only those rules which the statute makes and applies.""Â

Therefore, if the petitioner wants to exercise the right to appeal, it can be done only subject to the conditions stipulated for exercise of such right

and not otherwise. The contention of the petitioner that the condition by the Third Proviso requiring deposit of the entire amount, is violative of Article

14 is therefore liable to be rejected. The learned Counsel for the petitioner, however, tried to distinguish the said two decisions. He pointed out that the

provisions regarding appeals in the cases of Vijay Prakash D. Mehta (AIR 1988 SC 2010) and Gujarat Agro Industries (AIR 1999 SC 1818)

contained an inbuilt provision to relieve the appellant from the rigours of the condition relating to deposit of full amount, in case such Authority was of

the opinion that it would cause undue hardship to the appellant. He contended that Section 30 of the Act did not contain such a provision for

dispensation of the condition.Â

While some enactments contain a provision for pre- deposit of the entire amount as a condition for filing the appeal, some other enactments while

incorporating such a condition also give the discretion to the Appellate Authority to relax the condition in cases of hardship. But what should be the

nature of the conditions to be imposed in regard to the right of appeal, that is whether it should be absolute or limited or with exceptions is a matter for

the Legislature to decide. Once it is recognised that a right of appeal is purely a statutory right to be governed wholly by the provisions of the Statute

granting such right, it follows that it is for the Legislature to stipulate suitable or appropriate conditions relating to appeal. …. â€​

14- In the light of the aforesaid judgments, it is argued by Shri Amit Seth that since the right of appeal is a statutory right and is circumscribed by the

condition of pre-deposit of tax before an appeal is entertained, an aggrieved person has to avail the remedy only in terms of the provisions of the Act.

15- On the other hand, Shri Tripathi defended the order passed by the learned Single Bench and insisted on arguments on merits, though the limited

question is as to whether the condition of pre-deposit of tax can be waived of. Since the learned counsel for the respondents was insistent, we have

heard him on merits as well. He submitted that in terms of the judgment reported as Shyam Kishore’s case as also the judgment reported as

Government of Andhra Pradesh and others Vs. P. Laxmi Devi (Smt), (2008) 4 SCC 720, a writ Court has the jurisdiction to waive the condition of

pre-deposit of Tax and once the learned Single Bench has waived of the condition it is not open in appeal to set aside the same. He also relied upon

Commissioner of Income Tax Andhra Pradesh Vs. K. Adinarayan Murty, AIR 1967 SC 1545; Sahasrangshu Kanta Acharya Vs. Collector of Malda

and others, (1963) 47 ITR 754; Abdul Sattar M. Mokashi Vs. Commissioner of Income Tax, (1988) 174 ITR 368; and, Income-tax Officer Vs. Ch.

Atchaiah, AIR 1996 SC 883 to contend that proper notice was not served upon the person from whom the recovery of Tax can be affected.

16- Shri Tripathi also argued that infact the imposition of Tax itself is illegal and arbitrary and that Tax has been imposed without giving documents in

support of the claim of the State. It is argued that a copy of the complaint was not supplied to the writ petitioner or the documents in possession of the

State were not given, to return a finding that the writ petitioner was using the bus for non-educational purposes. It is argued that the petitioner is not

owner of the vehicle, but having leased the vehicle for a period of three years to BHEL, no liability can be fastened on the writ petitioner.

17- Reliance is also placed upon the information sought by the writ petitioner under the Right to Information Act, 2005, where the Regional Transport

Officer, Bhopal has submitted information to Additional Transport Commissioner as a response to ‘On Attention Notice’ fixed before the MP

Assembly on 7.12.2015, to say that the stand of the Department is that there was no illegality in the transportation contracts. 18- We have heard

learned counsel for the parties and find that the order passed by the learned Single Bench waiving the pre-deposit Tax before entertainment of appeal

is not sustainable in law.

19- Firstly, the argument of the learned counsel for the writ petitioner that in view of information under the Right to Information Act given to him, it

cannot be said that the writ petitioner has evaded any Tax. We find that such an argument cannot be entertained, as no such argument was raised

before the Assessing Officer nor was it a ground of challenge before the Assessing Officer and it was not a ground to challenge the order passed in

the writ petition also. In writ appeal, this Court examines the order passed by the learned Single Bench. The question to be examined is whether the

order of learned Single Bench is sustainable on the well settled principles of intra court appeal. However, there is no provision of permitting additional

documents to be filed by any of the parties in the writ appeal, which were not before the learned Single Bench. Such additional documents cannot be

taken into consideration to return a finding that the order of the learned Single Bench is not sustainable.

20- Still further, we find that the information given by the Regional Transport Officer was forwarded to Additional Transport Commissioner,

Gwalior. There is no assertion or proof that such reply was tabled in the Assembly. Even if such information was tabled in the Assembly, the

consequences of incorrect information, if any, has to be examined by the Legislative Assembly alone, but inter-departmental communication cannot be

used to nullify the quasi judicial order passed in terms of the statute.

21- Still further, the petitioner has not raised grievance in the memorandum of appeal before the Authority that there was denial of opportunity of

hearing. In the absence of any plea in the memorandum of appeal that there was denial of opportunity, the writ petitioner cannot be permitted to allege

that there was denial of opportunity of hearing, when at the first available opportunity the writ petitioner has not raised any grievance. The writ

petitioner has not raised any grievance of denial of opportunity of hearing even when a show-cause notice was issued to the petitioner. Therefore, we

find no merit in the argument raised that the petitioner has suffered any prejudice on account of non-supply of any of the documents relied upon by the

State.Â

22- The learned Single Bench has relied upon an order passed in Writ Petition No.2467/2002 [Dinesh Kumar Vs. The Appellate Authority and others]

decided on 12.9.2005, whereby this Court has directed appeal to be entertained without pre-deposit of the Tax. A perusal of the order shows that the

learned Single Bench passed an order of directing the appeal to be entertained for the reason that the writ petition was pending before the High Court

for more than two years and there was an interim order by which the vehicle was released in favour of the petitioner. Still further, it has been held that

the order is being passed keeping in view the peculiar facts and circumstances of the case. Â

23- We find that the order passed by the learned Single Bench is not a precedent to be followed in all cases, it being passed in peculiar facts of the

said case. Though in terms of the judgment in Maruti Udyog Limited’s case (supra) or in the matter of Shyam Kishore’s case (supra), in

writ petition this Court can pass an order to waive of the onerous condition of pre-deposit of Tax, but such order can be passed as mentioned in M/s

Emerald International’s case, in the rarest of rare case. The statutory provision cannot be ignored at the mere asking.

There has to be strong plausible reasons, which may weigh with the writ Court to soften the rigour of the statutory provision.

24- The argument raised that the writ petitioner is not the owner of the vehicle and, therefore, no proceedings can be taken against him are again not

tenable. The writ petitioner is the registered owner of the vehicle as per the registration certificate produced by him. The registration certificate â€

Annexure P/1 shows Manish Saxena â€" the sole proprietor of the petitioner, to be the registered owner. Even the Insurance Policy is issued in favour

of Manish Saxena â€" sole proprietor of the writ petitioner. The notice has been issued to the petitioner, but the petitioner has not asserted that he is

not the owner of the vehicle and not liable to pay the Tax. Therefore, we do not find that the petitioner is not owner of the vehicle and thus not liable

to be proceeded against for payment of the statutory dues.Â

25- The argument of the learned counsel for the writ petitioner that notice should have been issued to the lessee, with whom the owner of the vehicle

has entered into an agreement of lease. We do not find such an argument is available to the writ petitioner, as he has not taken any plea before the

Assessing Officer nor in appeal. Therefore, such plea cannot be permitted to be raised at the stage of writ appeal when such plea has not been

examined either by the Assessing Officer or in appeal or by the writ Court.

26- In view of the aforesaid, we find that the order of the learned Single Bench to waive the pre-deposit of Tax is not sustainable, as there is no

circumstance on record which may warrant such concession to be granted to the writ petitioner. The writ petitioner is bound to comply with the

statutory conditions before availing the remedy of appeal.

27- Consequently, we set aside the order of the learned Single Bench to the extent that ‘condition of pre-deposit of tax has been waived’.

Therefore, the present appeals are allowed. However, we grant liberty to the writ petitioner to deposit the Tax and/or penalty amount within a period

of one month. If the amount is paid within one month, the appellate authority shall decide the appeal on merits in accordance with law.

28- Appeal stands allowed and disposed of.