PETITIONER:
STATE OF KARNATAKA & ORS
Vs.
RESPONDENT:
N.MADAPPA & ORS. ETC
DATE OF JUDGMENT: 02/05/1996
BENCH:
RAMASWAMY, K.
G.B. PATTANAIK (J)
CITATION:
JT 1996 (5) 453 1996 SCALE (4)644
ACT
HEADNOTE
JUDGMENT
THE 2ND DAY OF MAY,1996 Present:
Hon’ble Mr.Justice K.Ramaswamy
Hon’ble Mr.Justice G.B.Pattanaik M.Veerappa, Adv. for the appellants. Mrs.Kiran Suri, Adv. for the Respondents.
ORDER The following Order of the Court was delivered: State of Karnataka & Ors. V. N. Madappa & Ors. etc
WITH
CIVIL APPEAL NO. 8851 OF 1996
(Arising out of SLP (C) No.3618 of l996
Delay coodoned.
Leave granted.
We have heard learned counsel on both sides.
These appeals by special leave arise against the judgments dated 18.10.1990 and 18.2.1991 of the Division Bench of the High Court of Karnataka made in W.P. Nos. 14029- 036/89 and 159/91. The appellant had introduced by the Karnataka Motor Vehicles Taxation (Amendment) Act 14 of 1989, sub-section (4) of Section 3 which reads as under :
"Amendment of Section 3:- After
subsection (3) of Section 3 of the
Karnataka Motor Vehicles Taxation
Act, 1957 (Karnataka Act 35 of
1957) (hereinafter referred to as
the principal Act), the following
shall be inserted, namely:
(4) Notwithstanding anything
contained in sub-section (1) and
(2), a special additional tax at
the rates specified in Part-D of
the Schedule shall be levied on
motor vehicles suitable for use on
roads carrying passengers or goods
in excess of the permitted capacity
of the vehicles.
(5) Insertion of new part ’D’ after
Part ’C’ and before the
Explanation, the following shall be
inserted, namely:-
---------------------------------------------------
Item Class of Vehicle Special additonal tax
No. for each occasion on
which such excess is
carried.
---------------------------------------------------
Rs. ps.
1. Passenger vehicles carrying
passengers in excess of the
permitted capacity, for
every such excess passenger. 20 - 00
xx xx xx xx xx xx
---------------------------------------------------
(6) In the Explanation, in
paragraph (3) after the words
’Corporation’, the words ’Or a Bank
or a Board or a Co-operative
Society or such other institution
as may be notified by the State
Government in this behalf’ shall be
inserted.
8. Power to remove difficulty - If
any difficulty arises in giving
effect to the provisions of the
Principal Act, as amended by this
Act, the State Government may, by
Notification in the official
gazette make such provisions as may
appear to it to be necessary or
expedient for removing the said
difficulty.
Provided that no such order
shall be made after the expiry of a
period of two years from the date
of commencement of this Act."
The respondents have challenged the validity of the above provisions. The Division Bench had held the State Government is devoid of power to levy tax at the enhanced rate on the passengers. It followed the ratio laid down by this Court in Automobile Transport (Rajasthan) Ltd. etc. vs. State of Rajasthan & Ors. [AIR 1962 SC 1406] and held that there is no competence of the State Legislature to enact sub-section (4) except to enforce Section 60 of the Motor Vehicles Act (4 of 1939) which is equivalent to Section 86 of the 1988 Act to levy tax on extra passengers and goods.
The question, therefore, is: whether the State Legislature is competent to enact law to levy tax on excess passengers carried by the holder of a permit under the Motor Vehicles Act? On an earlier occasion, when the State had amended Section 8 and armed itself with power to levy additional tax, it came to be challenged. Ultimately, this Court in M. Narasimhaiah VS. Dy.Commissioner for Transport (1987) Supp. SCC 452] held that having regard to the power to levy the tax on the capacity of the vehicle determined under Entry 4 of the Schedule A read with Section 8 of the Act and the rates prescribed thereunder the State Legislature has no power to impose additional tax on excess passengers. While considering that question this Court in para 10 held thus:
"10. There is another difficulty in
applying Section 8 to stray cases
of overloading. Additional tax is
payable for the period during
which the vehicle is proposed to be
used for a purpose which will
attract a higher rate of tax. The
rate of tax is fixed taking one
quarter, i.e., 3 months as a unit
of time for taxation. Is it
reasonably possible to determine
the higher rate of tax payable, if,
say, on two days in a quarter,
there has been overloading of the
vehicle for a few hours or minutes?
The problem of computation of
additional tax becomes difficult
in such cases."
It is true that under Entry 57 of List II of the Seventh Schedule to the Constitution, the State Legislature has power to tax on vehicles, whether mechanically propelled or not, suitable for use on roads subject to the provisions of Entry 35 of List III. There is no law made by the Parliament occupying the field under Entry 35 of List III. Therefore, the State Legislature has power under Entry 57 to make law levying tax on vehicles.
It is seen that under Schedule A read with Section 8, the State Legislature has already levied tax on the basis of the capacity of the passengers carried in the motor vehicle as per the permit issued thereunder. Having had that power the question emerges: whether the State Legislature can levy tax on excess passengers on each of the occasion when the enforcing officers found the vehicle to have been overloaded? The concept of tax on vehicle is not for a single day or an hour when the passengers were found to be in excess of the limit prescribed under the permit. The power to levy the tax is on the basis of the user of the vehicle for the quarter under the Act. Under those circumstances, the power to levy tax under the amended subsection (4) of Section 3 read with Schedule D on excess passengers obviously on each occasion of overloading appears to be unsustainable. Under those circumstances, the power to levy tax at the enhanced rate on the excess passengers on finding the vehicle to be overloaded in excess of the prescribed limit, appers to be not consistent with the scheme under Section 8 of the Act.Therefore,though for different reasons,we hold that the amendment is not valid in law.
The appeals are accordingly dismissed. No costs.