Keshav Dutt Kandpal vs District Magistrate
2021 Latest Caselaw 3463 UK

           IN THE HIGH COURT OF UTTARAKHAND
                       AT NAINITAL
                   Writ Petition (M/S) No. 574 of 2018

Keshav Dutt Kandpal                                            .......Petitioner
                                         Vs.

District Magistrate, Haridwar & others

                                                              .....Respondents

Mr. Bhagwat Mehra, Advocate for the petitioner. Mr. Rakesh Kunwar, Additional CSC, for the State of Uttarakhand/respondents.

Hon'ble Sharad Kumar Sharma, J (Oral)

The petitioner before this Court in the present writ petition, had put a challenge to the order dated, 26.08.2017, as passed by the respondent No.2, and the consequential issuance of the recovery citation issued in the month of January, 2018 by the respondent No.4, where a recovery of an amount of Rs.4,16,050/- has been sought to be recovered, as payable towards the tax dues under the provisions of the Uttarakhand Motor Vehicle Taxation Reforms Act, 2003.

2. Learned counsel for the petitioner had submitted that the bus bearing Registration No.PB10X-3297, which was of 1996 make, was initially owned by one Sri Jitendra Singh, and later on the said bus was sold to the petitioner, in the year 2011. The bus continued to be plied as per the valid terms of permit granted to the petitioner, on the permitted route and the validity of the said permit, fitness certificate and other documents continued to operate, so till December, 2013.

3. The petitioner has contended that the amount, which has been sought to be recovered, by issuance of the impugned order, which is under challenge, it pertains to the taxes due to be paid by the petitioner for the period from 01.01.2014 to 31.07.2017. The petitioner submits that the recovery of the amount thus sought to be

recovered by the impugned order, against the petitioner, could not have been levied on account of the reasons, that after the expiry of the term of the period of the validity of the documents, the bus since was not being plied at all, no taxes for the said period could be levied on the petitioner, as it has been determined to be payable by the impugned order.

4. In order to substantiate his contentions, learned counsel for the petitioner had made a reference to a judgment rendered by the Coordinate Bench of the Allahabad High Court in Writ (Tax) No.764 of 2014, "Shri Dayal Singh Vs. State of U.P. and others". According to the contention of the petitioner in the said case, the tax which was made payable was for a period from 01.12.2010 to 31.10.2012, amounting to Rs.47,196/-, and thereafter for yet another segment of a period i.e. from 01.11.2012 to 30.04.2013, which was a period after the expiry of the validity documents of the vehicle, which was the subject matter in question, which was being then considered by the Coordinate Bench of the Allahabad High Court.

5. The Coordinate Bench of the Allahabad High Court has held that as far as the levy of taxes for the period after the expiry of the validity of the documents, under which the vehicle, which is being plied, that would be appealable under Section 18 of the Act, but as far as the part of the tax, which was harnessed upon for a period prior to the expiry of the period, would be outside the ambit of Section 18 of the Act, and particularly, the reference may be had to excerpts which are quoted hereunder:-

"The U.P. Motor Vehicles Taxation Act (hereinafter known as 'the Taxation Act') empowers the State of Uttar Pradesh to impose tax and the additional tax (for some kind of vehicles).

Section 4 of the said Act is the charging Section, and in the present case, we are concerned with Section 4(2-A) which provides for charging of the tax on public service vehicles other than those refer to Section 1-A and sub-section 2 of the Section 4 of the Act. Section 4(2A) is reproduced here-in-below:

"Section 4..........

2-A Save as otherwise provided by or under this Act no public service vehicle other than those referred in sub-section (1-A) and sub-section (2) shall be used in any public place in Uttar Pradesh unless a monthly tax at such rate as may be notified by the State Government is paid in respect thereof:

Provided that in respect a motor vehicle under this sub-section instead of monthly tax, a quarterly or an yearly tax at such rate as may be notified by the State Government may be payable."

Section 5 of the said Act empowers the State to levy additional tax in addition to the tax payable under Section 4. The time for payment of the tax is provided under Section 9 of the said Act wherein it is indicated, that the tax leviable under the Act, shall be paid on the dates so specified under Section 9 of the said Act. Section 12 of the said Act provides for the contingency in the event of non-use of vehicle and the refund of tax, if paid, pertaining to the said non-use of vehicle. Section 12(2) is as under:

Section 12(2) - Where the operator or, as the case may be, the owner of a motor vehicle, does not intend to use his vehicle for a period of one month or more he shall, before the date the tax or additional tax, as the case may be, is due, surrender the certificate of registration, the token, if any, issued in respect of the motor vehicle and the permit, if any, to the Taxation Officer of the region where the tax or additional tax was last paid and on such surrender, no tax or additional tax under this Act shall be payable in respect of such vehicle for each complete calendar month of the period during which the vehicle remains withdrawn from use and the aforesaid documents remain surrendered with the Taxation Officer:

Provided that in case such vehicle is found plying during the period when its documents as mentioned in this sub-section remain surrendered with the Taxation officer, such owner or operator, as the case may be, shall be liable to [the tax and the additional tax as if the documents were not surrendered and shall also be liable to the penalty equivalent to five times of the tax and additional tax].

Section 28 of the said Act empowers the State Government to make the Rules were carrying out the purpose of the Act through issuance of a Notification. In terms of the said power conferred under Section 28, the State of Uttar Pradesh has framed the Rules known as 'the Uttar Pradesh Motor Vehicles Taxation Rules, 1998' notified with effect from 10.11.1998. In the present case, we are concerned with the Rule 22 of the said Rules which have been heavily relied upon by the

counsel for the State of Uttar Pradesh. Rule 22(1) to Rule 22(5) of U.P. Motor Vehicles Taxation Rules, 1998 are as under:

22. Procedure in the case of non-use of a vehicle.- (1) When the owner of a motor vehicle has occasion to withdraw his motor vehicle from use for a period of one month or more, in the case of motor vehicle other than transport vehicle the certificate of registration and in case of transport vehicle the certificate of registration, tax certificate, additional tax certificate, if any, fitness certificate and permit, if any, must be surrendered to the Taxation Officer in Form 'F', otherwise the motor vehicle shall be deemed to have been in use. The vehicle shall not be kept outside in the territorial limit of the Taxation Officer during the period of surrender except with the prior permission of the Taxation Officer an exception circumstances.

(2) The intimation of non-use shall be accompanied by a cash receipt of [Rupees One Hundred] to be deposited in the office of the Taxation Officer and shall be presented by the owner or his duly authorised agent to the Taxation Officer.

(3) When the Taxation Officer, after satisfying himself that Form 'F' presented before him is complete, the documents as mentioned in sub-section (1) are attached and the fee prescribed in sub-rule (2) has been deposited, shall accept the surrender of the documents of the vehicle. The Taxation Officer shall complete Part II of Form 'F' and return it to the claimant after entering the date of surrender in the documents produced with Form 'F'.

(4) The Tax Officer shall not accept the intimation of non-use of any vehicle for more than three calendar months, within a calendar year, however, the period, beyond three calendar months may be accepted by the Regional Transport Officer of the region concerned, on the recommendation of the Taxation Officer, if the owner makes an application along with a fee of Rs.10 to the Taxation Officer. If any such vehicle remains surrendered for more than three calendar months during a year without the extension of acceptance of surrender it shall be deemed to be revoked and the owner shall be liable to pay tax and additional tax as the case may be.

(5) The Taxation Officer shall make entry and sign on each entry in the register maintained in Form 'F-2' in the order of acceptance of surrender of documents for non-use of the vehicle under sub-rule (3). The Taxation Officer or any other officer authorized by him in this behalf, shall sign whenever any entry is made in the register. The Taxation Officer shall check such register

on the last day of every calendar month and shall sign below the last entry therein.

The counsel for the petitioner has placed heavy reliance upon Rule 22(A) of the said Rules which is quoted here-in- below:

22-A. Procedure for write-off the tax or the additional tax regarding the non-existing vehicles - When the owner of any vehicle informs the taxation Officer that his vehicle has been lost, destroyed, rendered permanently incapable of use or transferred permanently out of the state or the Taxation Officer is otherwise satisfied that any vehicle is not in existence, he may after such enquiry and adopting such procedure as may be laid down in the order issued from time to time by the Transport Commissioner, exempt or write-off the owner from payment of arrear of tax or additional tax or penalty which is found on records since the vehicle was lost, destroyed or rendered permanently incapable of use or transferred permanently out of the state:

Provided that if such vehicle is respect of which the tax or additional tax has been written off, is found in existence, the arrears of tax, additional tax and penalty as the case may be, which would have been recoverable in absence of exemption or writing off under sub-rule (1), may be recoverable from said owner of the vehicle."

Before reverting the interpretation of the Act and the Rules, it is essential to record Section 2(o) of the U.P. Motor Vehicles Taxation Act which is as under:

"words and expressions used but not defined in this Act and defined in the Motor Vehicles Act, 1988, shall have the respective meaning assigned to them in that Act;

Thus, a plain reading of the Taxation Act and the Rules makes it clear that incidence of tax is use of the vehicle and the time for payment of the tax is specified under Section 9 of Motor Vehicles Taxation Act, 1997. Thus, for imposition of tax, it is essential to establish that the vehicle is "in use". Interestingly, under section 12 of the Taxation Act, specific provisions have been provided for the contingency where the operator and the owner of the motor vehicle does not intend to use his vehicle for a period of one month or more, in fact, a perusal of Section 12(2) provides for the procedure also wherein the owner or the operator is only to surrender the certificate of registration and token, if any, to the Taxation Officer and in fact, a bar is imposed from imposition of the tax or additional tax in respect of such vehicle for the period during which the vehicle remains withdrawn from use and the aforesaid documents remains surrendered with the Taxation Officer. Proviso to the said Section 12(2) confers a power on

the Taxation Officer to impose the tax or the additional tax, in the event, the vehicle is found to be plying during the period when the documents as mentioned in Section 20(2) of the Act remains surrendered. Thus, a plain reading of Section 12 shows that a complete Code is prescribed .A conjoint reading of Section 12 (2) and Rule 22(4), relied upon by the counsel for the respondents make it clear that an additional action is to be performed by the owner if non-use of the vehicle is for more than three calendar months. Although the Rule has been framed in terms of Powers conferred by virtue of Section 28 for enforcement of the provisions of the Act,in fact the said Rule 22(4), has the effect of being a charging Section which prima facie is beyond the mandate of section 28, however, as there is no challenge to the validity of the said Rule 22(4), I am not going into the said validity in the present case.

................................Even otherwise admittedly the registration comes to an end after the expiry of 20 years, as admittedly, the vehicle was manufactured in the year 1992, the period of 20 years would expire in the year 2012 and thus no tax could have been imposed after the expiry of the said 20 years. As such the order of the Taxation Officer imposing tax for the period 01.11.2012 to 30.4.2013 amounting to Rs. 47,196/- is liable to be set aside to the extent of charging tax for the period 1.1.2013 to 30.4.2013. As regards the demand of tax amounting to Rs. 1,59,620/- for the period 01.12.2010 to 31.10.2012, the mater is remanded to the Taxation Officer to consider the grant of benefit under Rule 22-A of the Taxation Rules after making such enquiry as he may deem fit in terms of mandate of Rule 22-A. To avoid any further delays it is directed that the petitioner shall appear before the Taxation Officer along with the relevant documents in support of his contention of the vehicle having become non-existent on 06.01.2021 at 12.00 (Noon) and the Taxation Officer after conducting such enquiry as he may deem fit , shall pass fresh orders taking into account the benefit to which the petitioner is entitled under Rule 22-A of the Motor Vehicles Taxation Rules, as expeditiously as possible."

6. In the aforesaid judgment, the learned Single Judge while dealing with the implications of the levying of the taxes, in the said case has dealt it in the light of the "Uttar Pradesh Motor Vehicles Taxation Rules, 1998", as it was then made applicable in the State of Uttar Pradesh.

7. During the course of the argument, what is revealed is that the State of Uttarakhand, as such has not framed its own similar

Rules, and hence in view of the provisions contained under the Reorganization Act, the Rules of the State of Uttar Pradesh, as it was then framed under the Motor Vehicle Act, that would continue to apply. However, this Court is not in agreement with the said argument which has been extended by the respondent for the reason being that the taxing law, as it has been made applicable in the State of Uttarakhand, was enforced by virtue of a notification which was issued in the year 2003, whereby the Uttaranchal Motor Vehicle Tax Reforms Act, 2003, was enforced, which independently dealt with the procedure provided for the purposes of determination of the tax which was to be levied on the vehicle, particularly that as referred under Section 12 of the said Act.

8. If Section 12 of the said Act, is scrutinized, it is argued by the learned counsel for the petitioner, that the nature of the tax which has been sought to be imposed by the impugned order, does not fall within any of the exception clauses, which had been provided under Section 12 of the Act, and hence as such the appellate platform available to the petitioner under Section 18 of the Act would not apply, because under sub-section (1) of Section 18 of the Act, the appeals are contemplated to be preferred only as against the order under Section 12 of the Act, and since according to the petitioner, the impugned action does not fall to be within the ambit of Section 12 in his case, Section 18 of the Act would not be applicable.

9. This argument of the learned counsel for the petitioner is not acceptable by this Court for the reason being, that, according to his own case, which he has argued for supporting his contentions, in the light of the judgment of the Coordinate Bench of the Allahabad High Court, the levying of tax for a period after the expiry of the validity of the documents, under which the vehicle was being plied, has been held to be an appealable under Section 18 of the Act.

10. Almost an identical situation, would emerged in the present case also, where admittedly according to the petitioners' case,

itself the tax was levied for a period after 01.01.2014, and particularly, when the petitioner admits the fact that the validity of the documents to ply the vehicle, in question had expired in the year 2013. Hence, the levy of tax was for a period subsequent, to the expiry of the validity of the documents, as such in the light of the judgment of the Allahabad High Court even, the taxation for the said period would be appealable under Section 18 of the Act. Because the first part of the levy of the taxes, which was the subject matter of the consideration before the Allahabad High Court was of the tax period, for which the vehicle was being validly plied under valid documents, which is not an issue, which is involved in the present case. Hence, the second portion and the ratio, which has been laid down by the Allahabad High Court, holding the levying of tax after the expiry of the period of validity of the documents, would be appealable under Section 18 of the Act, this writ petition is on that ground itself, is dismissed; leaving it open for the petitioner to agitate his grievances by preferring an appeal under Section 18 of the Act.

11. Learned counsel for the petitioner had argued the matter from yet another prospective, that while making a reference to the pleadings, which has been raised by the State in their counter affidavit, particularly, the reference has been made to paragraph No.9, which contemplates that the Taxing Officer, can relax the tax to the extent of 75%, while exercising his powers under Section 9 (3) of the Act. If that be the case where the power of relaxation has been vested with the Taxation Officer, in that eventuality, for the derivation of the benefit of relaxation it had been in the light of the directions, which may be solicited by the petitioner only after invoking the appellate jurisdiction before the competent appellate forum, provided under the Act of 2003. In that eventuality, while relegating the petitioner to approach the Appellate Forum, for questioning the tax levied on his vehicle, for the period after the expiry of the validity of the documents of the said vehicle. It will be left open for the petitioner to agitate his cause for seeking a relaxation under Section 9 (3) of the Act, before the Appellate Forum itself.

12. In view of the aforesaid, the petitioner is relegated to approach the Appellate Forum, for the re-dressal of his grievances, as against the levy of the tax, by virtue of the impugned order, which is under challenge in the writ petition. The amount, which has already adjusted in pursuance to the impugned order, it will continue to be retained by the respondents till the decision of the appeal, if any, which is preferred by the appellant within a period of two weeks from the date of receipt of this judgment.

13. Subject to the above observations, the writ petition stands dismissed.

(Sharad Kumar Sharma, J.) 06.09.2021

NR/