Shri M. P. Singh Vs. Anand Transport
Co.(P) Ltd. [1971] INSC 169 (29 July 1971)
GROVER, A.N.
GROVER, A.N.
HEGDE, K.S.
CITATION: 1971 AIR 2127 1971 SCR 984
ACT:
Madhya Pradesh Motor Vehicles (Taxation of
Passengers) Act, 1959--Section 7-Return filed accepted as correct-No order
quantifying amount of tax necessary before issuing demand notice.
HEADNOTE:
Under the Madhya Pradesh Motor Vehicles
(Taxation of Passengers) Act, 1939, where returns have been accepted as correct
nothing more need be done except to recover the tax due which has not been paid
and no assessment order need be passed in view of the express language of s. 7.
It is only when the returns have not been submitted or when returns submitted
are found to be incorrect and incomplete that the tax officer has to make an
enquiry and determine the sum payable by the operator by way of tax. Similarly
if there has been escapement of tax, proceedings have to be taken under s. 8
and an order has to be made after an enquiry.
The position would be the same if penalty is
sought to be levied under s. 9. [986F-H; 987A]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1449 to 1454 of 1967.
Appeals by special leave from the judgments
and orders dated December 15, 1966 of the Madhya Pradesh High Court in Misc. Petitions
Nos. 303 of 1966 etc.
I. N. Shroff, for the appellants (in all the
appeals).
M. N. Phadke, K. L. Hathi and P. C. Kapur,
for the respondents (in C.As. Nos. 1449, 1450 and 1452 of 1967).
V.S. Desai, K. L. Hathi and P. C. Kapur, for
the respondents (in C.As. Nos. 1453 and 1454 of 1967).
The Judgment of the Court was delivered by
Grover, J.-All these appeals arise out of writ petitions that were filed in the
High Court of Madhya Pradesh challenging the notices of demand issued by the
Deputy Transport Commissioner for payment of the amount of passenger tax said
to be due under the Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act,
1959, hereinafter referred to as the 'Act'. By a common judgment dated November
8, 1966 the High Court allowed the petitions and quashed the demand notices.
The appeals may be divided into two categories. In C. As. 1449 and 1453 of 1967
returns had been duly filed as contemplated by s. 5 of the Act but no tax had
been deposited as required by s. 6. Demand 9 85 notices were issued in respect
of the tax payable pursuant to the returns some years later. Proceedings were
also taken as no payment was made for recovery of the tax as arrears of land
revenue. In the other four appeals the returns were never filed but it appears
the authorities did take certain proceedings under S. 7 of the Act and in some
cases accounts of the respondents were checked and their liability determined.
When demand notices were sent and recoveries sought to be made the writ
petitions were filed.
The High Court did not go in these matters
fully ,and treated all the petitions as if the facts were similar.
Section 3 of the Act which is the charging
section provides that there shall be levied and paid to the State Government a
tax on all passengers carried by stage carriages at a rate equivalent to 15 %
of the fare inclusive of the tax payable to the operator of a stage carriage.
The tax has to be collected by the operator of a stage carriage and paid to the
State Government in accordance with the provisions of the Act. Under S. 5 the
operator must deliver to the tax officer or to such prescribed officer as may
be specified a return in the prescribed form and manner either daily or at such
intervals as may be prescribed. Section 6 lays down that the tax payable during
any month in accordance with the return submitted under S. 5 shall be paid into
a Government treasury by the operator and the receipt evidencing such payment
has to be forwarded to the Tax Officer. Sections 8, 9 and 10 are in the
following terms "(8) Fares escaping assessment.-If, for any reason, the
whole or any portion of the tax leviable under this Act, for any month has
escaped assessment, the Tax Officer may, at any time within, but not beyond,
one year from the expiry of that month, assess the tax which has escaped
assessment, after issuing a notice to the operator and making such inquiry as
the officer may ,consider necessary.
(9)Penalty for non-payment of tax.-Where the
whole or any portion of the tax payable to the State Government in respect of
any stage carriage for any month or portion thereof in pursuance of ss. 6, 7
and 8 has not been paid to it in time the Tax Officer may, in his discretion,
levy in addition to the tax so payable, a penalty not exceeding 25 per cent of
the maximum tax which would have been payable to the State Government if the
stage carriage had carried its full complement of passengers during such month
or portion thereof. (10)Recovery of tax, etc,-(1 ) In the cases referred, to in
sections 7, 8 and 9 the, Tax Officer shall serve on the operator a notice of
demand for the sums payable 9 86 to the State Government and the sums specified
in such notice may be recovered from the operator as arrears of land revenue.
(2)The tax shall be a first charge on the
stage carriage in respect of which it is due as also on its accessories and
such stage and the accessories thereof may be attached and sold for the
recovery of the tax under the appropriate law relating to the recovery of
arrears of land revenue." Section 12 provides for an appeal against a
notice of demand' served under S. 10.
The scheme of the above provisions apparently
is that the operator of a stage carriage has to submit a return in accordance
with S. 5 and pay tax into the Government treasury every month as provided by
S. 6. No question can arise of any assessment order being made under S. 7 by
the Tax Officer where the returns are found to be correct and complete. It is
only where either no returns have been submitted or where the return submitted
appear to the Tax Officer to be incorrect or incomplete that the Tax Officer
has to follow the procedure laid down in s. 7 and determine the tax payable by
the operator. The High Court was of the view that even where returns had been
filed and accepted as correct the Tax Officer has to pass a proper assessment
order holding the operator liable for payment of tax in accordance with the
return submitted by him. In other words no notice of demand can be issued until
the Tax Officer makes such an order quantifying the amount of tax.
We are unable to accede to the contention
which prevailed' with the High Court that even where returns had been submit-
ted but the tax has not been paid the Tax Officer is bound to, make an order
before serving a notice of demand even though the demand is strictly in
accordance with the returns which have been submitted. Section 7 rules out any
such course to be followed by the Tax Officer. It is only when the returns have
not been submitted or when return submitted are found to be incorrect and incomplete
that the Tax Officer has to make an inquiry, and determine the sum payable by
the operator by way of tax. Similarly if there has been escapement of tax
proceedings have, to be taken under S. 8 and an order has to be made after an
enquiry.
The position would be same if penalty is
sought to be levied, under S. 9. But where returns have been accepted as
correct nothing more need be done except to recover the tax due which has not
been paid and no asessment order need be passed in view of the express language
of S. 7.
987 We are satisfied that in the two appeals,
i.e., C. As. 1449 and 1453/67 in which returns had been filed the Tax Officer
was not bound to make any order quantifying the amount of tax before issuing
the notice of demand. The amount sought to be realized was quantified in the
returns themselves vide Form IV read with Rule 4(2)(c) of the M. P. Motor
Vehicles (Taxation of Passengers) Rules. It has not been shown that any penalty
was sought to be imposed in those two cases.
The order of the High Court, therefore, in
these appeals cannot be sustained and is hereby set aside and the writ
petitions are ordered to be dismissed.
As regards C. As. Nos. 1450, 1451, 1452 and
1454/67, it appears, as has been stated earlier, that some proceedings were held
of the nature contemplated by S. 7 and the notices of demand were issued after
orders had been duly made by the Tax Officer. But this is a matter which was
not examined in each case by the High Court and we would like to express no
opinion with regard to it. These appeals are also allowed and the orders of the
High Court are set aside. The High Court will rehear and redecide the same in
accordance with law. There will be no order as to costs in all. the appeals.
K. B. N, Appeals allowed.
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