Prameshwari Devi vs State Of Himachal Pradesh
1968 Latest Caselaw 160 Del

JUDGMENT

Hardyal Hardy, J.

(1) These three petitions under Articles 226 and 227 of the Constitution have been heard together as they involve a common question of law. The petitioners in all the cases are the holders of public carrier permits issued by the State Transport Commissioner, Punjab before the re-organisation of the State of Punjab under the Punjab State Re-organisation Act. 1966. All of them have their place of business within the territorial limits of the State of Punjab and have no place of business within the Union Territory of Hirnachal Pradesh. The permits granted to them are still to run their course for some time and when issued were valid for the whole of the State of Punjab as it then was, including Kalka Simla and connected group of roads

(2) Before the re-organization of the erstwhile State of Punjab, a portion of Kalka-Simla road lay within the territorial limits of the State of Himachal Pradesh. The traffic on Kalka-Simla route was therefore shared by the erstwhile State of Punjab and the State of Himachal Pradesh in accordance with mutual agreement between btoh the States by virtue of which each State was entitled to issue a number of permits. The permits issued by one State were countersigned by the toher.

(3) In 1952 the Punjab Legislature passed the Punjab Passengers and Goods Taxation Act 16 of 1952 (hereafter to be referred to as the Act') to provide for levying a tax on passengers and goods carried by road in certain mtoor vehicles Section 3(1) of the Act provides that there shall be levied charged and paid to the State Government a tax on all fare and freights in respect of all passengers carried and goods transported by mtoor vehicles at the rate of one-fourth of the value of the- fare or frieghts, as the case may be. subject to a minimum of two Naye paise in any one case, the amount, of tax being collected to the nearest Naya paisa.

(4) Subsection (3) of section 3 provides that where passengers are carried or goods transported by a mtoor-vehicle from .my place outside the State to any place within the State, or from any place within the State to any place outside the State, the tax shall be payable in respect of the distance covered within the State at the rate I lid down in subsection (1) and shall be calculated on.such amount as bears the same proportion to the ttoal fare or freight as the distance covered in the State bears to the ttoal distance of the journey.

(5) Then there is a proviso which has no bearing on the case before us and therefore need nto be stated.

(6) Section 4 deals with the method of collection of tax. It reads:- "THEtax shall be collected by the owner of the mtoor vehicle and paid to the State Government in the prescribed manner. Provided that in case of public carriers the Government may accept a lump sum in lieu of the tax chargeable on freight in the manner prescribed. Provided further that in case of contract carriages the Government may accept a lump sum in hue of the tax chargeable on face in the manner prescribed "

The manner of collection and payment of tax as referred to in section 4 and the two provisos has been provided in rule 9 of the Punjab Passengers and Goods Taxation Rules, 1952 (hereafter to be referred to as the Rules) which reads as under :- `"Method of payment of ta.x.- Tax shall he paid in one of the following manners:- (i) By stamping the ticket or receipt with an impressed, embossed, engraved or adhesive stamp (nto already used) issued by the State Government for the purposes of the Act and dentoing that the tax due has been paid (ii) Where the impressed, embossed, engraved or adhesive stamps are nto available or the Commissioner so directs, the amounts of tax payable shall be deposited by the owner in cash into the Government treasury at such intervals and in such manner as laid down in rules, Provided that the owner of a public carrier shall pay to the State Government the following lump sum in lieu of the tax chargeable on freight:- (a.) Rs 810 per annum per vehicle toher than one plying on hill routes or under countersignatures of the authorities in the adjoining; States under the Mtoor Vehicles Act 1939. (b) Rs. 1,215.00 per annum per vehicle plying on hill routes or under countersignature of the authorities in the adjoining States under the Mtoor Vehicle Act 1939. (c) Rs. 135.00 per annum per vehicle plying on Pathankto-Jammu Srinagar route only (d) Rs. 300.00 per annum per tractor plying with public carrier permits. Provided further that the said sum shall be deposited in cash by the owner into the Government treasury or paid by the crossed cheque in favor of the appropriate assessing authority with due regared to the provisions of ntoe 4 under rule 25 of the subsidiary treasury rules. The said sum shall be payable in equal quarterly Installments within fifteen days of the close of the quarter to which the payment relates, subject to the following conditions. Section 8 provides for registration of the owner of the mtoor vehicle and lays down that no owner shall ply his vehicle in the State unless he is in possession of a valid registration certificate granted under section 9 on an application made by the owner to the prescribed authority on payment of a fee of one rupee.

(7) Rule 3 prescribes the form for an application for registration of the vehicle and the authority to whom such application is required to be made. According to this rule the application has to be made by the owner in form P. T. T. I to the Assessing Authority of the District concerned. According to clause (c) of Rule 2 the term Assessing Authority in respect of any owner means "the Excise and Taxation Officer or the Assistant Excise and Taxation Officer holding charge of the district, within whose jurisdiction the owner's place of business is situated." Under clause (m) the 'place of business' in relation to an owner means the place in Punjab where the accounts of business are kept and if there are more than one such places, the principal place of businesses in Punjab where the entire accounts are kept and where there is no such place, it means the place in Punjab at which his mtoor vehicle is registered or his permit countersigned and where an owner has gto his mtoor vehicle registered in more than one district, such place as is nominated by him as his 'place of business'. Clause (s) defines the term "Prescribed Authority" which means :- (i) Assessing Authority for the purposes of sections 3,6,9,11 and 21: (ii) An officer of the Excise and Taxation Department nto below the rank of a Taxation Sub-Inspector in his jurisdiction for the purposes of sections 13,13A, 14 and 17; (iii) Deputy Excise and Taxation Commissioner of the circle concerned for the purposes of section 18 " As already stated, all the three petitioners having their "place of business' within the jurisdiction of the Excise and Taxation Officer, Ambala gto their mtoor vehicles registered with him as required under sections 8 and 9 of the Act. They allege and the allegation is nto controverter by the respondents that since then they have been paying the goods tax chargeable under section 3 of the Act in lump sum in accordance with Rule 9 of the Rules.

(8) The petitioners further allege that since they are plying their vehicles under counter signature of the authorities in the adjoining States under the Mtoor Vehicles Act, 1939 they have been paying tax to the State of Punjab at the rate of Rs 1215 per annum in accordance with proviso (a) and (b) of Rule 9(ii).

(9) The erstwhile State of Punjab was re-organized on 1st November, 1966, by the Punjab Re-organisation Act 31 of 1956, as a result of which major portion of Kalka Simla route, on which the petitioners are plying their mtoor vehicles for the past several years, formed part of the Union Territory of Himachal Pradesh.

(10) Sections 88 and 89 of the aforesaid Act read as under :- "88. The provisions of Part Ii shall nto be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, any territorial references in any such law to the State of Punjab shall, until toherwise provided by a competent Legislature or toher competent authority, be construed as meaning the territories within that State immediately before the appointed day." 89 "For the purpose of facilitating the application in relation to the State of Punjab or Haryana or to the Union Territory of Himachal Pradesh or Chandigarh of any law made before the appointed day, the appropriate Government may, belore the expiration of two years from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment. as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or toher competent authority. Explanation.-In this section, the expression "appropriate Government" means- (a) as respects any law relating to a matter enumerated in the Union List, the Central Government; and (b) as respects any toher law- (i) in it? application to a State, the State Government, and (ii) in its application to a Union territory, the Central Government " Part Ii referred to in section 88 above deals with the re organization of the erstwhile State of Punjab by the carving out of a new State of Haryana and by the transfer and addition of some of the territory of the existing State of Punjab to the Union Territory of Himachal Pradesh. The combined effcct of these two sections is that the incorporation of a portion of the route in the Union Territory of Himachal Pradesh will involve no change in the provisions of the Punjab Passengers and Goods Taxation Act, 1952 relating to levy and collection of the tax till such time as a competent legislature or toher competent authority toherwise provides.

(11) It is nto disputed that neither the competent legislature nor the appropriate Government has so far made any changes in the relevant law under section 89 of the Re-organisation Act and the law that was previeusly in force is still the law applicable to the case.

(12) The petitioner's grievance in these petitions is that although they have been paying the goods tax to the re-organized State of Punjab in the same manner in which they were paying before the re-organization of the State, on 8th November, 1967 the Excise and Taxation Officer, Simla (Respondent no. 2) passed an ex Parte order assessing them to goods tax from 1st November, 1966 to 31st December, 1967 at the rate of Rs. 303.75 per quarter under Rule 9 of the Rules on the ground that Simla District had been merged in Himachal Pradesh on 1st November. 1966 and that as a result the Kalka-Simla route was no more a part of the State of Punjab. Respondent no 2 also imposed a penalty on each of the petitioners (Rs. 2000/ in the case of petitioner in Civil Writ petition No. 63 of 68 and Rs. 1,000.00 each in the case of petitioners in Civil Writ Petitions 64 of 68 and 65 of 68) besides assessing them to goods tax amounting to Rs 1518-75. The Petitioners contend -that they having already paid goods tax for the same period at Ambala where their vehicles are registered under the Act, the demand of goods tax in imposition of penalty by Respondent no. 2 is wholly illegal, void and ultra vires the Act.

(13) The petitioners' claim is resisted by the- respondents on whose behalf a written-statement has been filed by Respondent no. 2 in which besides asserting the right of the Himachal Pradesh Government to levy and collect goods tax on mtoor vehicles transporting goods and plying on Kalka Simla road which is wholly within the territory of Himachal Pradesh, it is also contended that the petitioners are liable to get their vehicles registered under section 8 of the Act with the Excise and Taxation Offcer, Sin-la which they have been evading. The petitions are also opposed on the ground that no such petition lies against the State of Himachal Pradesh and that in any event the petitioners have nto exhavsted the remedies under the Act under section 15 an appeal lies to the appellate authority appointed by the State Government in this behalf while section 16 provides for revision by the Commissioner.

(14) There isn substarce in the objection raised by the respondents in so far as it relates to the non-maintainability of the petition against the State of Himachal Pradesh. Under section 55(b) of the Government of Union Territories Act, 1963 all suits and proceedings in connection with the administration of a Union Territory are required to be instituted against the Government of India. The writ petitions as filed against the State of Himachal Pradesh are therefore clearly misconceived The objection though sound is, however, nto fatal to the maintainability of the petition because the order challenged in the petitions is one passed by the Excise and Taxation Officer, Simla who has been imp leaded as respondent no. 2. A writ in the nature of certiorari can therefore issue against that order.

(15) The rule about exhaustion of remedies provided by the Act is no doubt one of great importance, more so in matters relating to taxation. Ordinarily therefore this Court will nto countenance any attempt to circumscribe that rule. Jurisdiction which this Court exercises under Articles 226 and 227 of the Constitution is no substitute for remedies available to citizen under the ordinary law. If the statute under which action has been taken by the authoritios provides a remedy by way of appeal or revis on, the aggrieved person cannto be permitted to by-pass the machinery provided by the statute and come to this court direct. But the bar is nto absolute. Where in a case like the present the action taken by the authorities appears to this Court to be wholly ultra vires the statute and the levy and collection of tax and penalty is no more than illegal exaction this Court will nto hesitate to strike down the action and will nto force the aggrieved party to persue his remedies under the statute.

(16) An examination of the impugned order in each case makes it clear that the Assessing Authority has proceeded on the assumption that after the coming into force of the Punjab Re-organisation Act, 1966 the petitioners were required to get their vehicles registered under section 8 of the Punjab Passengers and Goods Taxation Act, 1952 with the Excise and Taxation Officer, Simla District which formed part of the Union Territory of Himachal Pradesh. This is contrary to the provisions of section 8 which merely states that no owner shall ply his mtoor vehicle in the State unless he is in possession of a valid registration certificate as provided hereinafter. Section 9 mentions the authority who is competent to grant such a certificate. Under section 88 of the Punjab Re-organisation Act any territorial references in the Punjab Passengers and Goods Taxation Act, 1952 to the State of Punjab have to be construed as meaning the territories within that State immediately before the appointed day until a provision to the contrary is made by competent legislature or toher competent authority. The necessary result is that the petitioners can continue to ply their mtoor vehicles ntowithstanding the change effected in the territorial boundaries of Kalka Simla road so long as they are in possession of valid registration certificates issued by the Excise and Taxation Officer, Ambala as he is the competent authority under section 9 of the Act to grant such certificates having regard to the definition of the term "prescribed authority' as defined in cause (s) of Rule 2 of the Rules.

(17) SECTION. 3 of the Act is what may be called the charging section while section 4 provides for the method of collection of the tax levied and charged under section 3. Under sub-section (3) of section 3 in case of inter-State traffic tax is payable in respect of the distance covered within the State at the rate laid down in sub-section (1) and has to be calculated on such amount as bears the same proportion to the same freight as the distance covered in the State bears to the ttoal distance of the journey. The proviso to section 4. however, permits the Government to accept a lump sum in lieu of the tax chargeable on freight bat whether the-tax is paid as calculated on the basis of the freight or any lump sum the payment in either case has to be made to the State Government with which the vehicle is registered and the locus of registration is determined by the the place of business of the owner of the mtoor vehicle. The Assessing Authority for the purpose of chargeablilty of the tax is also the authority within that State.

(18) It is true that under sub section (3) of section 3 the petitioners will be liable to the State of Punjab only for that amount of tax which corresponds to the distance covered within that State at the rate laid down in subsection (1) and calculation has to be made on such amount as bears the same proportion to the ttoal freight as the distance covered in the State bears to the ttoal distance of the journey but since the proviso to section 4 permits the State Government to accept a lump sum in lieu of the tax chargeable on freight in the manner prescribed by Rule 9 and according to that rule the petitioners have paid Rs l2l5.00 instead of Rs. 810.00 per annum they did nto incur any further liability to pay additional tax for the period 1st November, 1.966 to 31st December, 1967 as a result of the change brought about by the Punjab Re-organisation Act.

(19) It is nto that the Government of Himachal Pradesh is completely powerless. It may be that it can lay claim against the State of Punjab as it is after the Re-organisation Act to the payment of a proportionate shire of the lump sum amount realized by that State from the petitioners. But it was also open to the Government to have made necessary changes in the Punjab Passengers and Goods Taxation Act, 1952 as envisaged by section 89 of the Punjab Re-organisation Act, 1966 but so long as those changes have nto been made by a competent legislature or by a competent authority the order of respondent No. 2 cannto be sustained. The petitioners' vehicles admittedly stand registered at Ambala which is their place of business. By the coming into force of the Punjab Re-organisation Act the place of the business of the petitioners has nto changed and since the liability of a mtoor vehicle for registration is determined by the place of business of the owner the petitioners cannto be required to get their vehicles registered at Simla nor can the Excise and Taxation Officer, Simla be regarded as Assessing Authority in respect of the petitioners' vehicles till suitable amendments and changes etc. are made in the Act and the Rules framed there under.

(20) The result of the foregoing discussion is that the order made by Respondent No. 2 is against the provisions of the Act and is therefore quashed. The petioners will also have their costs. Counsel fee is assessed at Rs. 50.00 in each petition.