Automotive Manufacturers (P) Ltd. Vs.
Govt. of Andhra Pradesh & Ors  INSC 324 (25 November 1971)
SIKRI, S.M. (CJ) SHELAT, J.M.
CITATION: 1972 AIR 229 1972 SCR (2) 593 1972
SCC (1) 125
Andhra Pradesh Motor- Vehicles Taxation Act
(5 of 1963)-Ss.
3, 9 and item 4 of Notification under
s.--Levy of tax on chassis used on road-Chassis need not have body attached to
it before it can be "used" within meaning of s. 3-Exemption under
item 4 limited to journey of chassis for the express purpose of body being
attached to it.
Section 3 of the Andhra Pradesh Motor
Vehicles Taxation Act (5 of 1963) authorised levy of tax on motor vehicles
"used or kept in use in a public place in the State". Item 4 in the
table of the notification issued under s. 9 of the Act exempted from the tax
"any chassis of motor vehicle when driven to any Place in order that a
body may be attached it." The Automotive Manufacturers (P) Ltd. in the
State of Andhra Pradesh, were dealers, among other things, in chassis received
by it from manufacturers outside the State. The chassis were driven by
transport contractors of the manufacturers themselves under temporary
certificate of registration under the Motor Vehicles Act and delivered to the
appellant in the State of Andhra Pradesh. The Ashok Leyland Ltd. transported
motor chassis by road from their factory in Madras to dealers in various parts
These chassis were driven through the State
of Andhra Pradesh either for delivery there or in other States of India. The
Automotive Manufacturers and the Ashok Leyland challenged the imposition of tax
under the Act. The High Court dismissed the petitions. In appeals to this Court
it was contended that (i) section 3 of the Act was not applicable, because,
there could be no user or keeping for use of the chassis of a motor vehicle as
a motor vehicle unless a body was attached to it; (ii) as the chassis were
invariably driven to their respective destination, in order that bodies may be
attached to them, they came directly under the notification of exemption issued
by the State Government;
and (iii) the impugned levy operated as an
impediment to free trade and commerce in violation of Art. 301 of the
Dismissing the appeals.
HELD : (i) It is not necessary for a chassis
to have a body attached to it before it ran be used within the meaning of the
Act, inasmuch as, it can be used by the man who drives it and such use of it on
public roads would be enough to attract the levy. [596 D] (ii) Item 4 in the
table of the notification limits the exemption from the tax to the journey of
the chassis for the express purpose of body being attached to it. The
Automotive Manufacturers, being dealers, could and probably did deal with or
dispose of the chassis as such. Further, it was not the case of the appellant
that the chassis were coming from outside the State for the purpose of having
bodies attached to them at the workshop of the appellant.
So far as Ashok Leyland was concerned the
chassis were being driven along the roads of Andhra Pradesh for disposal at the
journey's end and it would be for the purchaser at the destination to have a
body fixed to 594 the chassis according to his own need and on the
specification given by him., Merely because bodies were going to be attached by
the ultimate purchasers it could not be said that the running of the chassis on
the roads of Andhra Pradesh would attract exemption under item (4) of the
notification. [597 C-E] [The contention that there was no previous sanction of
the President in respect of the bill as envisaged by Art. 304 (b) was not
allowed to be raised inasmuch as it was not urged in writ petitions. Therefore,
the Court did not examine the merits of the contentions urged in this regard.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 2180 to 2182 of 1968.
Appeals by Special Leave from the judgment
and order dated October 6, 1967 of the Andhra Pradesh High Court in Writ
Petitions Nos. 1456 of 1965, 376 and 2006 of 1966.
M. C. Chagla, P. Ramachandra Rao and B. R.
Agarwala, for the appellants (in all the appeals).
P. Ram Reddy and A. V. V. Nair, for the
respondents (in all the appeals).
The Judgment of the Court was delivered by
Mitter, J.-These appeals are directed against the imposition of taxes under the
Andhra Pradesh Motor Vehicles Taxation Act (V of 1963). The appellant in the
first two appeals is the Automotive Manufacturers (P.) Ltd., a dealer, among
other automobile equipment, of motor chassis, motor vehicles etc. received by
it from manufacturers outside the State of Andhra Pradesh. The first appeal
arises out of a writ petition against the levy in respect of motor chassis
delivered to it by Ashok Leyland Ltd. of Madras. These chassis are said to be
driven by transport contractors of the manufacturers themselves under
temporary, certificates of registration under the Motor Vehicles Act and
delivered to the appellant at Secunderabad. The second appeal by the same
appellant arises out of a writ petition challenging the levy on jeeps, jeep
truck chassis, jeep station wagons of the manufacture of Mahindra &
Mahindra Ltd. of Bombay, besides pick-up vans, scooters etc. from Bajaj Auto
Ltd. of Poona. The scooters are carried to Secunderabad in lorries.
The appellants in Civil Appeal No. 2182 of
1968 are Ashok Leyland Ltd. Madras who transport motor chassis by road from
their factory at Encore to dealers in various parts of India, State Transport
Undertakings etc. According to their writ petition, these chassis have to
traverse long distances in the State of Andhra Pradesh every month destined for
delivery not only in the said State but also beyond the same. These chassis are
driven from Ennore to their respective destinations in the several States under
temporary certificates of registration obtained from the 595 Madras State on
payment of requisite tax in that behalf, such certificates of registration
under s. 28 of the Motor Vehicles Act being effective throughout India.
The appellants' case is that the levy is
illegal and unconstitutional. The grounds urged in the writ petitions filed in
the High Court inter alia are as follows :-
1. S.3 of the Act only authorises a levy of
tax on a motor vehicles "used or kept for use in a public place in the
State". There can be no user or keeping for use: of the chassis of a motor
vehicle as a motor vehicle unless a body is attached to it. 'In the, case of
vehicles other than chassis such user or keeping for use in 'a public place can
only take place when they are put to the required user or kept for use by the
customers for whom the vehicles are transported in the manner contemplated by
the Motor Vehicles Act.
2. S. 9 of the Act exempts from payment of
tax chassis of a motor vehicle "driven to another place in order that a
body may be attached to it". As the chassis are invariably driven to their
respective destinations in order that bodies may be attached to them, they come
directly under the notification of exemption issued by the State Government.
As the chassis or the vehicles are covered by
temporary certificates of registration taken out by the manufacturers entitling
transportation throughout the territory of India, the impugned levy operates as
an impediment to the free trade and commerce of the petitioners in violation of
301 of the Constitution.
The High Court turned down all the
contentions. Hence the appeals.
Before this Court Mr. Chagla for the
appellants limited his first and second contentions to the cases of chassis
His first contention was that s. 3 of the Act
was not applicable to the appellants.
Sub-s. (1) of that section, runs as follows
:- "The Government may, by notification from time to time direct that a
tax shall be levied on every motor vehicle used or kept for use, in a public
place in the State." Under sub-s. (2) of s. 3 the notification issued
under sub- s. (1) is to specify the class of motor vehicles on which, the rates
for the periods at which and the date from which the tax shall be levied.
A motor vehicle has not been defined in this
Act but under s. 2(j) of the Act it is to have, the same meaning as is assigned
to it in the Motor Vehicles Act. Under s. 2(18) of the last mentioned Act,
"a motor vehicle means any mechanically propelled vehicle adapted for use
upon roads whether the power of propulsion is transmitted thereto from an external
or internal source and includes a chassis to which a body has not been attached
and a trailer; but does not include a vehicle running upon fixed rails or a
vehicle of a special type adapted for use only in a factory or in any other
enclosed premises." The argument of learned counsel was that a chassis as
such could neither be used nor kept for use in a public place, before a body
was fitted to it and so long as the said step was not taken, the question of
levy of tax under the Act would not arise. We were referred to the different
meanings of the word "use" in the Oxford Dictionary some of which are
as follows :- "To make use of as a means or instrument; To employ for a
profitable end;" In our view, it is not necessary for a chassis to have a
body attached to it before it can be used within the meaning of the Act
inasmuch as it can be used by the man who drives it and such use of it on
public roads would be enough to attract the levy. Ordinary chassis have bodies
attached to them for commercially profitable use but even without a body a
chassis can be used and is actually used when it is taken over public roads.
The second submission was that the appellants
qualified for exemption under the Government notification under s. 9 of the
Act. Section 9 inter alia provides :
"(1) The Government may, by
notification-- (a) grant an exemption, make a reduction in the rate or order
other modification not involving an enhancement in the rate, of tax payable--
(i) by any person or class of persons; or (ii) in respect of any motor vehicle
or class of motor vehicles or motor vehicles running in any particular area;
xx xx XX. " The notification issued ran
as follows:- " In exercise of the powers conferred by sub- section (1) of
section 9 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (Andhra
Pradesh Act 5 of 1963), the Governor of Andhra Pradesh hereby grants exemption
of the tax payable in respect of motor vehicles specified in column (1) of the
Table below subject to the conditions, if any, specified in column (2)
597 Item (4) of the table reads :
"Any chassis of a motor vehicle"
the condition for exemption being :
"When driven to any place in order that
a body may be attached to it." It was argued that as the use of a chassis
would be meaningless unless a body is attached to it and all chassis, as a
matter of fact, have to have bodies attached to them, the driving of the
chassis on the road without a body' would qualify for exemption under, the
above notification. We find ourselves unable to accept this view. Item (4) in
the table of the above notification limits the exemption from the tax to the
journey of the chassis for the express purpose of a body being attached to it.
The Automotive Manufacturers being dealers can and do probably deal with or dispose
of the chassis as such. There is no allegation in any of the two writ petitions
filed by these appellants that the chassis were coming from Madras or Bombay
for the purpose of having bodies attached to them at the workshop of the
appellant. In so far as Ashok Leyland Ltd. is concerned, it is their positive
case that the chassis were being driven through the State of Andhra Pradesh
either for delivery there or in other States of India. They were certainly
being driven along the roads of Andhra Pradesh for disposal at the joumey's end
and it would be for the purchaser at the destination to have a body fixed to
the chassis according to Ms own need and on the specification given by him.
Merely because bodies were going to be attached by the ultimate purchasers, it
cannot be said that the running of the chassis on the roads of Andhra Pradesh
would attract exemption under item (4) of the notification.
The last point urged by counsel was that
inasmuch as registration of a vehicle in any State under s. 28 of the Motor
Vehicles Act is to be effective throughout India any tax by a State on motor
vehicles be they merely chassis or otherwise would run counter to Art. 301 of
the Constitution according to which trade, commerce and intercourse throughout
the territory of India is to be free subject to the other provisions of Part
XIII. Under Art. 304(b) how- ever it is open to the Legislative of a State to
impose such reasonable restrictions on the freedom of trade, commerce or
intercourse with or within that State as may be required in the public
interest. This again is subject to the proviso that no Bill or amendment for
the purpose of the said cl.
(b) is to be introduced in the State
Legislature without the previous sanction of the President. Learned counsel
wanted to urge that the impost was not saved by Art. 304(b) inter alia, on the
ground that there was no previous sanction of the President in respect of the
Bill as envisaged by Art.
304(b). We did not allow counsel to press
this point inasmuch as it had 598 not been urged in the writ petition and we
hereby make it clear that we are not examining the merits of the contention
urged by counsel in this regard and it will be open to his clients, if so
advised, to urge it in any future proceedings they may choose to take.
These appeals were originally heard by a
Bench of five Judges including S. C. Roy, J. who expired a few days back.
The above judgment was concurred in by our
We however gave a further hearing to the
parties at which nothing was addressed to us to make us change our opinion
In the result, the appeals fail and are
dismissed with costs. One set of costs including hearing fee.
K. B. N. Appeals dismissed.