Page No.# 1/8 vs The State Of Assam And Anr
2022 Latest Caselaw 2464 Gua

                                                                Page No.# 1/8

GAHC010241172017




                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                       Case No. : WP(C)/5764/2017

         M/S. GARGO MOTORS and ANR.
         A PROPRIETORSHIP FIRM HAVING ITS PRIMARY PLACE OF BUSINESS AT
         BUDDHA TEMPLE ROAD, DULIAJAN, DIBRUGARH, ASSAM, PIN-786602
         BEING REP. BY ITS PROPRIETOR KAMAKHYA BORTHAKUR

         2: (b) SRI SUMAN GARGO
          S/O LATE KAMAKHYA BORTHAKUR
          R/O BUDDHA TEMPLE ROAD
          DULIAJAN
          DIBRUGARH
         ASSAM
          PIN 786602

         2: ON THE DEATH OF SHRI KAMAKHYA BORTHAKUR HIS LEGAL HEIRS
         ARE 2(a) SMT. KRISHNA BORTHAKUR AND ANR
         W/O LATE KAMAKHYA BORTHAKUR
          R/O BUDDHA TEMPLE ROAD
          DULIAJAN
          DIBRUGARH
         ASSAM
          PIN 78660

         VERSUS

         THE STATE OF ASSAM and ANR.
         THROUGH THE COMMISSIONER AND SECRETARY TO THE GOVT. OF
         ASSAM, TRANSPORT DEPTT., ASSAM SECRETARIAT, DISPUR, GUWAHATI-
         781006

         2:THE DISTRICT TRANSPORT OFFICER
          DISTRICT TRANSPORT OFFICE
         A.T. ROAD
          PHOOL BAGAN
          PO and DIST. DIBRUGARH
                                                                             Page No.# 2/8

            PIN-786001
            ASSA

Advocate for the Petitioner : MS. I DAS
Advocate for the Respondent : SC, TRANSPORT

BEFORE

Hon'ble MR. JUSTICE SANJAY KUMAR MEDHI

Advocates for the petitioners : Shri S. Dutta, Sr. Advocate Ms. P. Das, Advocate Advocates for the respondents : Ms. MD Bora, SC, Transport Department

Date of hearing : 21.07.2022 Date of Judgment : 25.07.2022

Judgment & Order

The writ jurisdiction of this Court has been sought to be invoked by the petitioner by questioning the legality and correctness of a demand notice dated 05.08.2017 issued by the District Transport Officer, Dibrugarh (hereinafter the DTO) by which a demand has been made for payment of Rs.44,00,800/- (Rupees Forty Four Lakhs and Eight Hundred) as arrears of Registration Tax against four numbers of vehicles. As per the petitioners, the impugned demand notice is not at all specific, inconsistent and has been issued without any sanction of law.

2. I have heard Shri S. Dutta, learned Senior Counsel assisted by Ms. P. Das, learned counsel for the petitioner. I have also heard Ms. MD Bora, learned Standing Counsel, Transport Department.

3. Before going to the issue which has arisen for determination in this case, it would be convenient to state the facts of the case in brief.

4. While the petitioner no. 1 is a proprietorship firm, the petitioner no. 2 is the Page No.# 3/8

sole proprietor. However, during the pendency of this writ petition, the petitioner no. 2 had passed away and accordingly his legal heirs have been substituted. It is the case of the petitioners that they had purchased four numbers of Cranes in the year 2009 and those were duly registered with Registration Nos. AS-04/AC 0570, AS-04/AC 0637, AS-04/AC 0692 and AS-04/AC 0833. The petitioners contend that the necessary Motor Vehicle Tax have duly been paid since the time of the registration and there is no default in this regard. However, vide the impugned communication dated 22.10.2014 issued by the DTO, Dibrugarh, the petitioners have been informed that due to inadvertent clerical mistake the aforesaid four numbers of vehicles were recorded as Crane since 22.10.2014 and accordingly Motor Vehicle Tax amounting to Rs.53,214/- has been paid per annum. However, as per the Act and the Gazette Notification, the actual amount payable is Rs.2,05,000/- per annum and therefore, there is huge difference between the amount paid and the amount required to be paid.

5. Shri Dutta, the learned Senior Counsel for the petitioner submits that the impugned action is bad in law for more than one counts. It is firstly submitted that there is no basis to come to a finding that the earlier rate was assessed incorrectly and in absence of the same, the impugned demand would not be sustainable. Secondly, a huge amount is the subject matter of demand and the same has been issued without giving the petitioners any proper opportunity of hearing. Thirdly, it is contended that the contents of the notice itself is self contradictory inasmuch as, in paragraph 3 of the said notice, the amount in question has been stated to be Rs.43,89,220/-, in paragraph 4, the arrears have been specified as Rs.44,00,800/-. It is additionally submitted that the demand is made in view of an amendment by which the rates of Registration Fee / Tax have been hiked and such demand cannot be made with retrospective effect.

6. Shri Dutta, learned Senior Counsel for the petitioners has drawn the attention of this Court to the Central Government Gazette Notification dated 05.11.2004 whereby a table has been given making a distinction between the Transport Vehicle Page No.# 4/8

and Non-Transport Vehicle. According to the petitioner, the present vehicles are non- transport vehicle and come under Sl. No. VIII- Crane Mounted Vehicle. It is further contended that the instant demand is a result of an afterthought and there is actually no arrear dues whatsoever in respect of the aforesaid four numbers of vehicles are concerned. The learned counsel accordingly submits that the impugned demand be interfered with.

7. Per contra, Ms. Bora, the learned Standing Counsel, Transport Department has questioned the very basis of filing the writ petition by contending that the writ petition has been structured and filed on an entirely incorrect premise. By drawing the attention of this Court to the prayer made in the writ petition, the learned Standing Counsel has submitted that while the communication dated 05.08.2017 is the subject matter of challenge, the petitioners may be directed to continue paying the Motor Vehicle Tax at the existing rate. To justify the impugned notice, the learned Standing Counsel has placed before this Court the copies of the registration certificate as well as the purchase papers of each of the four vehicles along with other relevant documents. It is contended that the registration certificates would reveal that the class of the vehicle is Crane and the sale document described the vehicle as Hydraulic Crane Model TMS 750BMKII. A copy of the photograph of the vehicle in question taken from the Product Guide would also show that the aforesaid model is a Hydraulic Truck Crane.

8. Explaining the reason for issuance of the impugned order, the learned Standing Counsel has placed before this Court, copies of the Gazette Notifications dated 24.05.2011 and 30.09.2015 by which the Assam Motor Vehicle Taxation Act, 1936 was further amended. In the notification dated 24.05.2011, the annual rate of tax for Hydraulic Crane which is included in the heading "Any Other Vehicle" under Article IX is stipulated as 1.75% of the cost of the vehicle. The amendment of the year 2015 as notified vide the notification dated 30.09.2015 had enhanced the annual rate to 2% and in this notification, "Any Other Vehicle" has been incorporated in Article VIII.

Page No.# 5/8

9. By referring to the affidavit-in-opposition filed on 10.07.2018 by the respondent nos. 1 and 2, the learned Standing Counsel has submitted that in paragraph 4 of the same, it has been clearly mentioned that the four numbers of vehicles in question are Hydraulic Cranes with Model Nos. TMS 750BMKII. Further, in paragraph 7 of the same, there is a specific averment that the above vehicles are taxable as per Article IX of the Notification dated 24.05.2011 at the rate of 1.75% which was further amended vide notification dated 05.06.2015 incorporating the said vehicle under Article VIII with the rate as 2% per annum.

10. With regard to the submissions made on behalf of the petitioners regarding inconsistencies of the amount in the impugned notification, attention of this Court has been drawn to the averments made in the paragraph 8 of the said affidavit-in- opposition wherein the calculations have been explained in details along with which the actual calculation sheet has also been annexed in respect of all the four vehicles.

11. The learned counsel for the Department submits that against the averments made in the affidavit-in-opposition dated 10.07.2018, no rejoinder affidavit has been filed by the petitioners and therefore, the said averments have remained unrebutted. She accordingly contends that there is no infirmity in the notice dated 05.08.2017 and the writ petition may accordingly be dismissed.

12. Rejoining his submissions, Shri Dutta, the learned Senior Counsel for the petitioners has reiterated that the vehicles in question are not Hydraulic Cranes but Mechanical Cranes mounted on Motor Vehicle and whatever tax was prescribed, the same has been paid without any default and therefore, the present demand is wholly unsustainable. Further, an interpretation has sought to be given with regard to the category of "Any Other Vehicle" by contending that Hydraulic Crane would not fall within the said category and therefore, it is the rate provided for Mechanical Cranes which would be applicable.

13. The rival submissions made by the learned counsel for the parties have been Page No.# 6/8

duly considered and the materials placed before this Court have been carefully examined.

14. To examine the legality and validity of the impugned demand, what is necessary to be considered is the actual make and category of the vehicles and consequently, the prescribed rates for the vehicles in question. If the writ petition succeeds on the first point that the categorization of the vehicle is wrongly done as Hydraulic Cranes, there would no requirement to go further into the lis. However, if the petition falls on the first point, there would be a requirement to go into the aspect of the applicable rates.

15. With regard to the question of the make of the vehicle, while the petitioners have termed the vehicles as Crane Mounted Vehicles by referring to the Central Government Gazette Notification dated 05.11.2004 wherein such vehicles have been classified as "Non-Transport Vehicles", the Department has relied upon the rates given in the Assam Motor Vehicle Taxation Act, 1936 as amended from time to time.

16. The registration certificates as placed on record by the learned Standing Counsel would clearly show that the class of the vehicles is Crane and from the purchase document, it would be clear that the vehicle is Hydraulic Crane Model TMS 750BMKII. Juxtaposition, in the writ petition there is no reference to the registration certificates of the vehicle in question and only an averment has been made that the vehicle is a Crane Mounted Vehicle. The position becomes absolutely unambiguous when the photograph of the vehicle given from the Product Guide is placed before this Court which in clear terms states the name as Hydraulic Truck Crane. Further, in the affidavit-in-opposition more particularly in paragraphs 4 and 7, the Department has clearly stated the vehicles to be Hydraulic Cranes and the said averments have not been denied by the petitioners by filing any rejoinder affidavit. In view of the above, there is no hesitation on the part of this Court to come to a considered conclusion that the vehicles in question are Hydraulic Cranes. Further, it prima facie appears that since Page No.# 7/8

the tax involved is a State Tax, it is the State Act which would be applicable and therefore, it becomes clear that the petitioners have proceeded on an incorrect premise in formulating the present challenge.

17. As indicated above, the consequential issue is to examine the legitimacy of the demand made vide the impugned order dated 05.08.2017. At this stage, this Court is reminded of the principle that in fiscal matters, a strict construction is necessary so that the State is not deprived from its revenue. Of course, in a given case, when the demand itself is wholly without jurisdiction or prima facie illegal, there can be interference, such interference are not to be made in a routine manner.

18. The Hon'ble Supreme Court in the case of Commr. of Customs v. Dilip Kumar & Co., reported in (2018) 9 SCC 1 after considering various decisions on the interpretation of fiscal statutes, concluded that every taxing statute including, charging, computation and exemption clauses, at the threshold stage should be interpreted strictly. Further, though in case of ambiguity in charging provisions, the benefit necessarily goes in favour of the assessee, but for an exemption notification or exemption clause the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State. The aforesaid view has been reiterated by the Hon'ble Supreme Court in a recent judgment of Union of India v. VVF Ltd., reported in (2020) 20 SCC

57.

19. As indicated above, it appears that the petitioners have proceeded on an incorrect premise in formulating the present challenge. In the concerned State Notifications whereby the Act of 1936 have been amended, the rate of annual tax for various vehicles including Hydraulic Cranes have been specified and there is no challenge with regard to such rates and the only challenge was with regard to the type of the vehicles wherein different rates have been prescribed. This Court having held that the type of vehicles involved is Hydraulic Crane, there is no hesitation in coming to a finding that the rates prescribed for Hydraulic Cranes would be applicable. As Page No.# 8/8

recorded above, the annual rate was 1.75% of the cost of the vehicle as per the notification dated 24.05.2011 which was enhanced to 2% vide the notification dated 30.09.2015. The Department in its affidavit dated 10.07.2018 has also given the details of the calculation in the annexure. In that view of the matter, this Court is of the opinion that there is no scope to interfere with the amount arrived at by the authorities while making the demand of arrear tax.

20. This Court however finds force in the contention of the learned counsel for the petitioners that the tax prescribed can be imposed only prospectively. This Court therefore directs that a further verification be made with regard to levy of the appropriate rate of tax from the period it had come into force and not from a retrospective basis.

21. While upholding the impugned demand as made by the communication dated 05.08.2017, this Court in exercise of its equitable jurisdiction cannot be oblivious of the fact that no fault of the petitioners can be attributed for not paying the annual tax at the prescribed rates from the date of purchase of the vehicles. At the same time, the revenue of the State is concerned in this case, the demand of which has already been upheld. In view of the above, it is provided that the demanded amount of Rs.44,00,800/- (Rupees Forty Four Lakhs and Eight Hundred) in addition to all further amounts after filing of the writ petition be allowed to be paid in installments within a span of one year from today.

22. The writ petition accordingly stands dismissed. Interim order, if any, stands vacated.

23. No order as to cost.

JUDGE

Comparing Assistant