Tata Engineering & Locomotive Co.
Ltd. Vs. The Sales Tax Officer & Regional Transport Officer, Poona [1978] INSC
237 (22 November 1978)
FAZALALI, SYED MURTAZA FAZALALI, SYED MURTAZA
BHAGWATI, P.N.
SARKARIA, RANJIT SINGH
CITATION: 1979 AIR 343 1979 SCR (2) 357 1979
SCC (1) 208
ACT:
Bombay Motor Vehicles. (Taxation on
Passengers) Act, 1958, Section 2(1), (7) and 3 read with Preamble-Whether
transport service registered as a 'private service vehicle providing
exclusively transport service to employees of the company a public service
vehicle, so as to be exigible to passenger tax under the Bombay Act, 1958.
HEADNOTE:
The appellants are a Company registered under
the Companies Act, 1913 and provide transport facilities to their employees at
a nominal rate from certain pick-up places to their factories at Pimpri and
Chinchvad in district Pune (Maharashtra) in their transport vehicle registered
as "private service vehicle" within the meaning of the Bombay Motor
Vehicles Rules 1959. The Bombay High Court held that the transport vehicle
provided to the employees by the company would be a public service vehicle and
therefore, the respondents sought to levy a tax on passengers under the
charging section 3 of the Bombay Motor Vehicles Taxation on Passengers) Act, 1958.
A challenge to the said levy having been rejected by the Commissioner of Pune
the appellant obtained special leave of this Court.
Allowing the appeals, the Court ^
HELD: 1. The preamble to the Bombay Motor
Vehicles (Taxation on Passengers) Act, 1958 clearly reveals that the dominant
object of the Act was to impose tax on certain classes of public service
vehicles. In other words, the Preamble indicates that vehicles which could not
be termed as public service vehicles fell beyond the ambit of the taxing
provisions of the Act. [359 G-H]
2. Though the Act and Rules made there under
do not define the term "public service vehicle", it is clear that,
from the Preamble of the Act that the tax can be levied only on passengers who
are carried by a stage carriage which is of` the nature of Public Service
Vehicle. [361A-B]
3. Section 3 of the Act which authorises the
levy of tax on all passengers carried by road in state carriages contains two
essential ingredients (1) that the transport concerned must carry passengers by
road, and (2) that each passengers must be carried in stage carriages, that is
to say, as defined in Section 2(7) of the Act, passengers must be carried for
hire or reward at separate fares paid by or for individual passengers, either
for the whole journey or for stages of the journey. [360F-G]
4. A combined reading of section 7 (1) which
defines 'passenger' and section 2(7) which defines 'stage carriage.
Of the Act clearly indicates that the tax
would be leviable only if the passengers are carried on a public service
vehicle. [361A] 358
5. The word 'Public' has got a well known
connotation and means a carriage to which any member of the public can have
free access of payment of the usual charges. It cannot by any process of
reasoning or stretch of imagination be deemed to include employees of a private
company who are given facilities not as members of the public but as holding a
status namely, the employees of that company. Thus, qua public the employees
from a separate class and cannot be said to be public as contemplated by rule
2(i). [361-C] 6. In the present case:
(a) The transport service which was
registered as a private service vehicle falls squarely within the ambit of the
definition of 'private vehicle service in the Bombay Motor Vehicles Rules,
1959. [361E] (b) The transport provided to the employees of the company was
reserved for them only and no other member of the public even if he wanted to
pay full charges could be carried on the said vehicle. In these circumstances,
therefore, it cannot be said that the transport vehicle provided to the
employees by the appellants could be a public service vehicle in any sense of
the term. Such a transport vehicle, being not a public service vehicle within
the meaning of the provisions of the Bombay Motor Vehicles Act, the view taken
by the Bombay High Court is clearly erroneous. [361F-G, 362B]
CIVIL APPELLATE JURISDICTION: Civil Appeal
Nos. 204-226 of 1978.
Appeals by Special Leave from the order dated
29-11- 1977 of the Commissioner, Pune Division, Pune in Passenger Tax Appeals
Nos. POI-1/56 AR-12, 24, 27, 32, 42, SO and 17 other appeals.
F. S. Nariman Ravinder Narain and K. J. John
for the Appellant.
V. S. Desai M. C. Bhandare (In CA 209/78) and
M. N. Shroff for the Respondents.
Ravinder Narain and K. J. John for the
Interveners- Sandvik Asia Ltd. S. K. F. Cooper Engineering Ltd. Bharat Forge
Ltd. and Bajaj Auto Ltd.
The Judgment of the Court was delivered by
FAZAL ALI, J. These appeals by special leave arc directed against an order of
the Commissioner of Pune dated 29-11-1977 dismissing the appeals and holding
that the challenge to the tax sought to be realised by the Revenue was not
tenable and the appellants were liable to pay the tax as also the penalty.
The appellants are a company registered under
the Companies Act, 1913 and have their factories at Pimpri and Chinchvad in the
District of Pune (Maharashtra). The appellants employ as many as 7.000 workmen
in those factories. In order to provide transport 359 facilities to their employees
to come to the factories from their respective villages the appellants provided
transport which would pick up passengers from Pune or Khed or Vadgaon or Alandi
or places enroute to TELCO Factory at Pimpri or Chinchvad and back. For this
journey a nominal charge of Rs. 10 per month was realised by the appellants
from the employees. Similarly, for the transport facilities provided to the
employees from Pimpri Railway Crossing and onwards to TELCO factory, they were
charged at the rate of Rs. 5 per month. A charge of Rs. 2 per month was levied
for the transport of employees from Chinchvad Village to TELCo factory at
Pimpri and back. the appellants further averred that these amounts were
realised by the appellants only from a particular category of employees and no
charges were levied in respect of those employees who were in the supervisory
grades. In the course of the arguments, it was pointed out that when the
company was prepared to grant free transport facilities to the supervisory
staff there was no reason why the same amenities should not be extended to the
other employees and Mr. Nariman, learned counsel for the appellants frankly
conceded that in future no charges would be realised from the employees and
they would he provided free transport as in the case of supervisory staff. It
is manifest that if the appellants had not levied any charge at all for the
transport facilities granted to the employees they would not be exigible to
passenger tax. Mr. Nariman, however, argued that even if a nominal charge is
realised from the employees that would not make the transport a public service
vehicle carrying passenger;, so as to attract the provisions of section 3 which
is the charging section of the Act. In our opinion, the contention of the
learned counsel is well founded and must prevail.
The Bombay Motor Vehicles (Taxation on
Passengers) Act, 1958 hereinafter called the Act is a statute which authorises
the levy of passenger tax. This Act has been amended several times right from
the year 1960 to 1975.
Before analysing the relevant provisions of
the Act, it may be necessary to extract the Preamble to the Act which runs
thus:- ..Whereas it is expedient lo provide for the levy of a tax on
passengers, carried in certain classes of public service. vehicles in the State
of Bombay. It is hereby enacted in the Ninth Year of the Republic of India as
follows." A perusal of the Preamble clearly reveals that the dominant
object of the Act was to impose tax on certain classes of public service
vehicles. In other words, the Preamble indicates that vehicles which could not
be termed as public service vehicles fell beyond the ambit of the taxing
provisions of the Act.
360 Section 2(7) of the Act defines 'stage
carriage' thus:- "'stage carriage' means a motor vehicle carrying or
adapted to carry more than six persons excluding the driver, which carries
passengers for hire or reward, at separate fares paid by or for individual
passengers, either for the whole journey or for stages of the journey, and
includes such a carriage or other omnibus when used as a contract carriage
within the meaning of the Motor Vehicles Act, 1939".
Section 3 which is the charging section runs
thus:- "3. (1) There shall be levied and paid to the State Government a
tax on all passengers carried by road in stage carriages at such rate to be
filed by the State Government from time to time by order in the official
Gazette as would yield an amount not exceeding twenty per cent of the inclusive
amount of fares payable to the operator of a stage carriage.
(2) After calculating the total amount of tax
payable under sub-section (1) out of the total amount received by an operator
during each month on account of inclusive fares in respect of the stage
carriage or stage carriages held by him the total amount of the tax shall
wherever necessary be rounded off to the nearest naya paisa, fractions of half
a naya paisa and over being counted as one and less than half being
disregarded".
Thus section 3 authorises the levy of tax on
all passengers carriages by road in stage carriages. This section contains two
essential ingredients: (1) that the transport concerned must carry passengers
by road, and (2) that such passengers must be carried in stage carriages. that
is to say, as defined in section 2(7) of the Act, passengers must be carried
for hire or reward at separate fares paid by or for individual passengers,
either for the whole journey or for stages of the journey.
Rule 2(i) of the Bombay Motor Vehicle Rules,
1940 framed under the Bombay Motor Vehicles Act, 1939 defines 'passenger'
thus:- " 'passenger' for the purposes of the rules in Chapter IV means any
person travelling in a public service vehicle other than the driver or the
conductor or an employee of the permit holder while on duty".
361 A combined reading, therefore, of rule
2(i) and section 2(7) of the Act clearly indicates that the tax would be
leviable only if the passengers are carried on a public service vehicle. It is
true that the term 'public service vehicle' has not been defined either by the
Act or by the Rules, but that however does not create any difficulty, because
having regard to the Preamble of the Act we are of the opinion that the tax can
be levied only on passengers who are carried by a stage carriage which is of
the nature of a public service vehicle. The word 'public' has got a well known
connotation and means a carriage to which any member of the public can have
free access on payment of the usual charges. It cannot by any process of
reasoning or stretch of imagination be deemed to include employees of a private
company who are given facilities not as members of the public but as holding a
special status, namely, the employees of that company. Thus, qua public the
employees form a separate class and cannot be said to be public as contemplated
by rule 2(i).
On the other hand, the Bombay Motor Vehicles
Rules 1959 define 'private service vehicles' as follows:
"Private Service Vehicle' means any
omnibus constructed or adapted to carry more than nine persons excluding the
driver and ordinarily used by or on behalf of the owner of such vehicle for the
purpose of carrying persons for or in connection with his trade or business, or
otherwise than for hire or reward; but does not include a motor vehicle used
solely for Police purposes".
The transport service in the present case
which was registered as private service vehicle falls squarely within the ambit
of the aforesaid definition Moreover, in the instant case, it is not disputed
that the transport provided to the employees of the company was reserved for
them only and no other member of the public even if he wanted to pay full
charges could be carried on the said vehicle. In these circumstances,
therefore, it cannot be said that the transport vehicle provided to the
employees by the appellants could be a public service vehicle in any sense of
the term. Mr. Nariman drew our attention to a number of rules and forms in
order to illustrate his point that private service vehicle was beyond the ambit
of the charging section. In view of what we have already said, it is not
necessary for us to go into such meticulous details, because the legal position
appears to be clear enough. As counsel for the appellants has already
undertaken not to charge any amount from the employees for providing transport
facilities, the point has now become more or less academic.
The Commissioner appears to have dismissed
the appeals of the appellants 5-978 SCI/78 362 as he felt bound by the judgment
of the Bombay High Court which had held that the transport vehicle provided to
the employees by the company would be a public service vehicle.
In view of our finding that such a transport
vehicle is not a public service vehicle within the meaning of the provisions of
the Bombay Motor Vehicles Act, the view taken by the Bombay High Court is
clearly erroneous and must be overruled.
For these reasons, therefore, the appeals are
allowed and the order of the Commissioner imposing the tax is set aside. The
appellants would be entitled to one set of costs.
S.R. Appeals allowed.
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