STATE OF KARNATAKA Vs. K GOPALAKRISHNA SHENOY

JUDGEMENT

(1.) The objective of the State of Karnataka in filing this Appeal by Special Leave is to seek a pronouncement of this Court on the scope and effect of S. 3(1) of the Mysore Motor Vehicles Taxation Act, 1957 (now the Karnataka Motor Vehicles Taxation Act 1957) and not to pursue the prosecutorial action against respondents 1 and 2 for their contravention of certain provisions of the said Act. This position was conceded by the learned counsel for the State even at the commencement of his arguments. Even so, the facts of the criminal case filed against the respondents and the reasons for their acquittal require mention for a proper comprehension of the legal issues involved in the case.

(2.) The first respondent sold his goods-vehicle, to wit a 12 ton lorry bearing Registration No. MYH 3797, to the second respondent on 2-1-71 but neither of the respondents reported the transfer of the vehicle to the Regional Transport Officer in compliance with the terms of sub-sec. (1)(a) and sub-sec. (1)(b) of S. 31 of the Motor Vehicles Act. Be that as it may, it came to the notice of the Regional Transport Officer subsequently that the tax payable for the vehicle under S. 3(1) of the Mysore Motor Vehicles Taxation Act 1957 (hereinafter the Taxation Act) for the period 1-10-72 to 31-3-74 amounting to Rs. 6,300/- had not been paid. This led to a demand notice being issued to the first respondent to pay the arrears of tax together with penalty. The first respondent refuted his liability to pay the arrears of tax on the ground he had transferred the vehicle to the second respondent as early as on 2-1-71. A demand notice was then issued to the second respondent and he too refuted his liability to pay the arrears of tax on the plea that the vehicle was not in a fit condition and it had been lying in a workshop during the relevant period without repairs being effected for want of spare parts. Since both the respondents failed to pay the arrears of tax the Transport Authorities filed a complaint against them under S. 3(1) read with S. 12(1)(a) of the Taxation Act in the Court of the Chief Judicial Magistrate, Mangalore. In the trial of the case the second respondent sought to prove his defence by examining the owner of a workshop known as Lokmata Garage and filing several defence exhibits. The Chief Judicial Magistrate accepted the defence of the respondents and held that since the first respondent had sold the vehicle he was not liable to pay the arrears of tax and likewise the second respondent too was not liable to pay the tax because the vehicle did not have a fitness certificate and had been left in a workshop for repairs being carried out. The Chief Judicial Magistrate further held that the currency of the Registration Certificate during the relevant period will not alter the situation in any manner because the Registration Certificate cannot have currency so as to attract tax liability when the vehicle was not covered by a valid certificate of fitness. For taking such a view and acquitting the respondents, the learned Magistrate relied on a decision of the Karnataka High Court in State v. Boodi Reddappa, (1975) 1 Kant LJ 206. The State preferred an appeal against the acquittal to the High Court but the High Court dismissed the appeal in limine and hence the present appeal by special leave by the State.

(3.) Before we proceed to consider the relevant provisions of the Taxation Act and the Motor Vehicles Act, we may refer to the decision in Reddappa's case which has been followed by the Chief Judicial Magistrate. The case pertained to the owner of a goods vehicle who was prosecuted under S. 12(1)(a) of the Taxation Act for non-payment of tax for a certain period during which the vehicle was not covered by a certificate of fitness and there was also no evidence that the vehicle had been put to use on the roads even without a certificate of fitness. The trial Magistrate acquitted the owner of the goods vehicle and the State preferred an appeal to the High Court and contended that as per the deeming provision contained in the Explanation to S. 3(1) of the Taxation Act, the owner was bound to pay tax as long as the Certificate of Registration was current. The Division Bench rejected the contention and held that the word 'kept' occurring in S. 3(1) must be construed as 'kept for use' and that in the absence of evidence to show that the vehicle had been made use of or that it had been 'kept for use', the currency of the Certificate of Registration would not by itself attract tax liability. For taking such a view the High Court placed reliance on an earlier decision rendered in V. Narayana Reddy v. Commr. for Transport, (1971) 2 Mys LJ 319. The Bench also held, following the view taken in yet another earlier case B. G. Bhagwan v. Regional Transport Officer, AIR 1967 Mys 139 that in the absence of a fitness certificate, S. 38 of the Motor Vehicles Act would be attracted and therefore a Certificate of Registration will not have currency without a co-extensive certificate of fitness for the vehicle.