HINDUSTAN AERONAUTICS LTD Vs. TAXING OFFICER CUM REGIONAL

JUDGEMENT

(1.) THE controversy raised in these cases relates to levy of panalty for default in payment of the tax due under the Orissa Motor Vehicles Taxation Act, 1975 (the Act' for short).

(2.) M /s. Hindustan Aeronautics Limited, Koraput represented by its General Manager which is a Govt. of India Undertaking has filed these applications under Arts. 226 and 227 of the Constitution of India for quashing the orders passed by the Regional Transport Officer -cum -Taxing Officer, Koraput ('the Taxing Officer' for short) levying penalty for default in payment of tax due in respect of certain vehicles of the Company during the period between 1977 -78 and 1991 -92 which were confirmed by the appellate and revisional authorities. The factual backdrop leading to the present proceedings may be stated thus: The petitioner Company owns nineteen buses registered as private vehicles/private service vehicles. Tax in respect of all the vehicles was paid under item No. 6 of the Schedule of the Act. On 22 -2 -1991 and 4 -3 -1991 the motor vehicle enforcement staff under the Taxing Officer -cum -Regional Transport Officer, Koraput (opp. party. No. 1) checked five of the the buses. ORK 3597, ORK 3810, ORK 5638, ORK 5639 and ORK 1563 and found them carrying passengers on realisation of hire charges. Certain other defects were also detected in ORK 3597 and ORK 3310. On receiving notice from opp. party No. 1 that tax ought to have been paid under Item No. 4 of Schedule instead of item No. 6, the petitioner paid Rs. 7,00,260/ -in two instalments on 4 -3 -1991 and 20 -3 -1991. Thereafter the opp. party No. 1 issued notice to the petitioner to furnish details about the manner of use of the other vehicles, the amount of fare collected from the users, etc The petitioner did not furnish the requisite particulars. On enquiry made by the Taxing Officer it came to light that hire charges at different rates were being realised from passengers on issue of receipt; that in February, 1984 the vehicle bearing registration No. ORK 5639 was found to have carried 40 passengers from Sunabeda to Vizianagaram on realisation of fare/hire charges at the rate of Rs. 10/ from each passenger and that the Financial Controller of the Company by the order dated 27 -2 -1988 had revised the rate of hire charge from 1 -3 -1988 for private use of the vehicles. From these facts the Taxing Officer concluded that the vehicles were being used for hire and reward. Accordingly the differential tax was assessed under Section 6 of the Act in respect of ten buses. The amount of differential tax was Rs. 33,10,393/ - for the period from April. 1977,to August,1992 excluding the period from July, 1989 to April, 1991 in respect of five vehicles mentioned earlier. Thereafter notice was issued to the petitioner to show cause why penalty shall not be levied; the reply submitted by it was considered and by the orders passed on 25 -8 -1992 and 26 -8 -1992 penalty to the tune of Rs. 63,22,384/ - was imposed for the delay default in payment of tax by the due date. The said amount was reduced to Rs. 61,40,143/ - on deduction of the amount in respect of a vehicle which was off road for some time during the period in question. The petitioner filed O. M. V. T. Appeal Case Nos. 6/92 to 21/92 before the Collector -cum -Chairman, Regional Transport Authority, Koraput under Section 18 of the Act assailing the imposition of panalty. The appellate authority by the order passed on 27th of February, 1993 (Annexure 2) dismissed all the appeals holding, inter alia, that the Taxing Officer rightly imposed panalty under Section 13 of the Act read with Rule 9 of the Orissa Motor Vehicles Taxation Rules, 1976 (for short, 'the Rules'). M. V. T. Revision No. 6/93 to 21/93 filed by the petitioner against the order of the appellate authority proved fatile which is evident from the order dated 17 -8 -1993 of the Transport Commissioner -cum -Chairman, S.T.A., Orissa (Annexure -4). These orders are assailed by the petitioner in these writ petitions.

(3.) IN the counter affidavit filed by them the opp. parties have taken the stand that penalty has been duly and legally imposed under Section 13 of the Act after considering the reply submitted by petitioner to the show cau5e notice issued by the Taxing Officer. From the facts found on enquiry by the Taxing Officer it is clear that the vehicles in question ware being plied for carrying passengers for hire and hire charges were being realised at different rates depending on user. It is therefore clear that vehicles were being plied to different destinations not as private vehicles/private service vehicles as mentioned in the registration certificates but as public service vehicles (contract carriages). As such, the appropriate item of the Schedule I applicable to the vehicles is item No. 4 and not item No. 6. In reply to the show cause notice the petitioner did not assail the aforementioned factual position but only harped on the fact that the demand of additional tax is under challenge before the High Court. Considering the reply of the petitioner the Taxing Officer levied penalty for default in payment of the tax due at twice the tax due as provided under Section 13. Therefore there was no illegality or infirmity in the order passed. The opp. parties contend that the grounds urged and the contentions raised by the petitioner were duly considered and on being satisfied that there was no merit in the appeals and the revisions filed by the petitioner the orders as per Annexures 2 and 4 dismissing the appeals and revisions were passed.