KIKAR SINGH Vs. EXCISE AND TAXATION OFFICER

JUDGEMENT

(1.) THIS Petitioner was the owner of truck No. PNG 1469, for which he obtained permit No - 67/60 in 1961, which was valid for five years. On December 20, 1961, the said vehicle was registered on Petitioner's permit. According to the Petitioner, the truck had been financed by Krishna Transport Finance Private Ltd., New Delhi, as a financier. Owing to the default in the payment of instalments by the Petitioner, the said Financing Company seized the truck on May 30, 1962, along with all papers. On October 3, 1962, the Petitioner sent an application to the Assessing Authority under the Punjab Passengers and Goods Taxation Act (16 of 1952) (hereinafter called the Act), Intimating that the truck had been taken away by the Financing Company on May 30, 1962, and he had not been plying the vehicle since then. The Authority was requested not to charge any tax under the Act from the Petitioner. In this application, it was also stated that the Petitioner had not deposited the quarterly tax as well for the same reason. On receipt of this application, the Assessing Authority made a reference to the Financing Company to confirm the facts stated by the Petitioner. The Company denied the allegations vide letter dated November 28, 1962. The Assessing Authority informed the Petitioner about the denial of his allegations by the Financing Company and demanded the tax due from him. The Petitioner reiterated his stand but the Assessing Authority did not accept it and issued a warrant for his arrest on account of his default in paying the tax. The Petitioner was arrested in pursuance of that warrant and was kept in the judicial lock -up with the result that the Petitioner paid the tax due upto December 31, 1963. The Petitioner made a request to the Assessing Authority to cancel the registration of his vehicle under Section 9(5) of the Act but the Assessing Authority did not oblige him. Under Rule 9 of the Punjab Passengers and Goods Taxation Rules, 1952, the Petitioner was liable to pay fixed tax of Rs. 202.50 per quarter. Since the Assessing Authority had refused to cancel his registration certificate and was holding him liable for the quarterly tax, the Petitioner filed the present petition in this Court on August 3, 1964, which was admitted the following day. The Motion Bench also stayed his arrest.

(2.) THE learned Counsel for the Petitioner has submitted that under Section 9(5) of the Act, the Assessing Authority was bound to cancel the registration certificate of the Petitioner's truck in case he closed his business and informed the Assessing Authority of the same. In my opinion, on receipt of an application for cancelling the registration certificate, the Assessing Authority is entitled to investigate the matter and come to the conclusion whether the applicant has closed his business or not. He cannot refuse to hold an enquiry into the matter without giving the applicant an opportunity to substantiate his allegation. In the present case, on receipt of the information from the Petitioner, the Assessing Authority made a reference to the Financing Company and on receipt of its denial concluded that the truck was with the Petitioner who was plying the same. This was an unwarranted conclusion which had not been arrived at after observing the principles of natural justice, that is, the Petitioner was never required to prove the truth of his allegations. From other departments of the Government and the Octroi Posts on various roads, it could have been easily verified whether the Petitioner had plied the truck after May 30, 1962, or not. Under section 3 of the Act, the tax is leviable only if the Petitioner had plied the truck and received freight for transporting goods in his truck. If he did not do so and had closed his business, he was not liable to pay the tax. I am, therefore, of the opinion that the Assessing Authority should have held an enquiry into the fact whether the petitioner had plied the truck in question during the period for which tax was demanded from him and the demand for the tax could have been made only after the Assessing Authority, was satisfied that the Petitioner had plied the truck and his allegation that he had closed his business was false. No such enquiry having been made, the Assessing Authority was not competent to demand the tax under the Act from the Petitioner,