R.K. AUTOMOBILE Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioners in these cases are dealers in two wheelers within the State of Jharkhand. They challenge the notices issued to them under the Bihar Motor Vehicles Taxation Act for recovery of the sales tax allegedly due from them along with penalty. In this writ petitions, the challenge of the petitioners is confined to the attempt to the recovery of the penalty in view of the fact that their liability to tax had become crystallised by an earlier judgment, though it is stated that the validity of the relevant provision is pending adjudication in the Supreme Court at the instance of another dealer, who is not a party to these writ petitions.

(2.) SECTION 6 of the Bihar Motor Vehicles Taxation Act, 1994 (hereinafter called 'the Taxation Act') provides that tax at the annual rate specified in Schedule III in lieu of the rates specified in Schedule I shall be paid by a manufacturer of, or a dealer in motor vehicles, in respect of the motor vehicles in his possession, in course of his business as such manufacturer or dealer under the authorisation of the trade certificate granted under the Central Motor Vehicles Rule, 1989. According to the Commercial Taxes Department, the petitioners, who are admittedly dealers, selling two wheelers like motor bikes and scooters, are also liable to tax under Section 6 of the Taxation Act from the day the Act came into force and since taxes due under the Act have not been paid by them, they are also liable to penalty under Section 23 of the Taxation Act. An attempt was made earlier to challenge the validity Section 23 of the Taxation Act, but a Full Bench of this Court upheld the constitutional validity of that section. It is said that one of the parties to one of the writ petitions leading to that decision, has filed an appeal in the Supreme Court and the appeal is pending and the Supreme Court has stayed the imposition of the penalty as regards that dealer. Section 2(c) of the Taxation Act adopts the definition of Motor Vehicle in the Motor Vehicles Act, 1988, for the purpose of the Taxation Act. A motor vehicle is defined by Section 2(28) of the Motor Vehicles Act as meaning any mechanically propelled vehicle adopted for use upon roads, whether the power of propulsion is transmitted thereto from an external or internal source, but it does not include a vehicle having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimetres. The petitioner conceded that the two wheelers traded in by them, satisfies the definition of a motor vehicles under Section 2(28) of the Motor Vehicles Act, but they pointed out that Sub-section (27) of Section 2 of the Motor Vehicles Act separately defines a motor cycle and since the vehicles dealt with by them satisfy the definition of 'motor cycle', they cannot be deemed to be motor vehicles as defined in Section 2(28) of the Act. But it has to be noted that Section 2(c) of the Taxation Act adopts the definition of motor vehicles in the Motor Vehicles Act and Section 6 of the Taxation Act imposes a liability to tax on a dealer in motor vehicles. Though motor cycles may be a species of motor vehicles, obviously, it would come within the definition of the motor vehicles as contained in the Motor Vehicles Act and as adopted by the Taxation Act. Therefore, the claim that two wheelers in which the petitioners are carrying on their business cannot be treated as motor vehicles liable to tax under Section 6 of the Taxation Act cannot be accepted.

(3.) IN Telco v. State of Jharkhand, 2003 (1) JLJR 601, the validity of the Taxation Act was challenged, but the challenge was repelled by the Full Bench. Almost all these petitioners had earlier filed writ petitions challenging the demand of tax in CWJC No. 219 of 1996 and the connected cases. The Division Bench upheld the demand for tax issued against the petitioners, but gave the petitioners an opportunity to show cause against the proposed imposition of penalty by treating the demand notice impugned in these writ petitions as notices to show cause. A time limit was fixed. Some of the dealers apparently did not file objections within the time. Whatever it be, the liability to penalty was upheld by the authority which called upon them to pay the tax and the penalty and threatening coercive action on their failure to do so. It is at that juncture that the petitioners have again approached this Court with these writ petitions.