Vinod Kumar Agarwal and Others v Government of Uttar Pradesh and Another

Allahabad High Court

31 January 1975

Civil Misc. Writ No. 6132 of 1974.

The Judgment was delivered by GULATI, J. :

GULATI, J. :

In this and in the connected writ petitions the validity of the notification No. 2952/-T/XXX-4-24-p-73 dt. 17th April, 1974, issued under sub-s. (4) of s. 3 of the Uttar Pradesh Motor-Gadi (Yatri Kar) Adhiniyam, 1962 (hereinafter referred to as the Act) has been challenged.

The petitioners in writ petitioner No. 6132 of 1974 are holders of permanent stage carriage permits on Datia Samthar Via Jhansi route. The state of U.P. passed the aforesaid Act for the purposes of levying Tax on the passengers carried by the public service vehicles in the state of Uttar Pradesh. Under s. 3 of the Act every passenger has to pay a tax @ equivalent to 5 per cent of the fare payable by him. Under sub-s (2) of s. 3 of the State Government was authorised to increase the rate of tax so as not to exceed 15 per cent of the fare. It may be stated here that the State Government has since increased the tax to 15 per cent, maximum permissible under the Act. Every operator of a stage carriage is required under s. 14 to obtain a registration certificate. Sec. 5 provides for the method of collection of tax and reads :-

“5. Method of collection of tax;

(1) The tax shall be collected by the operator of the stage carriage and paid to the State Government in the prescribed manner;

Provided that the State Government may accept, or agree to accept, a lump sum in lieu of the amount of tax that may be payable by the operator of the State Government.

Provided further that any change in the rate of tax which comes into force after the date of agreement shall have the effect of making a corresponding (proportionate) change in the lump sum agreed upon, in relation to that part of the period of the agreement during which the change rate remains in force.(2) the State Government may be rule require the operator to purchase the stamps and use the same for the collection of the tax”

.

In short, s. 5 provides that the operators of sage carriages shall collect tax from the passengers and shall pay to the Government in the prescribed manner. The manner has been provided in the Rules. The first proviso contains an alternative mode of payment of tax. Under this mode an operator has been given the option to pay a lump sum in lieu of the amount of tax, instead of paying the actual collection and the second proviso provides that a change in the rate of tax after the date of agreement will automatically enhance the lump sum amount proportionately.

In order to raise funds for the refugees who came over to India from Bangla Desh in the year 1971 the State Government issues an Ordinance called the Uttar Pradesh Taxation Laws (Amendment) Ordinance, 1971. This Ordinance was latter on replaced by an Act the Uttar Pradesh Taxation Laws (Amendment) Act, 1972. By this amending Act sub-ss. (3) and (4) were added to s. 3. They are reproduced below :

“(3) From and after the Commencement of this section there shall further be levied and paid to the State Government an additional tax on every passenger carried by a stage carriage, not being a stage carriage plying exclusively within the limits of city or municipality at the rate of ten paise on the fare for each journey (where the ordinary fare for such journey is not less than one rupee) payable by such passenger to the operator of the stage carriage in respect of every journey in the Stage.

Explanation-The additional tax under this sub-section shall, in the case of a contract carriage be levied in respect of the number of passengers from whom accommodation is provided in it, irrespect ve of the actual number of passengers carried.(4) The provisions of this Act shall, so far as may be, apply in relation to the additional tax chargeable under sub-s. (3) as they apply in relation to the tax under sub-s. (1), so however, that t e second proviso to sub-s. (1) of s. 5 shall apply in relation to the said additional tax within such adaptation or modification as the State Government may be notification in the Gazette direct.

Explanation-In this section, the expression ‘city’ and municipality’ have the meanings respectively assigned to them in the Uttar Pradesh Nagar Mahapalika, Adhiniyam, 1959 and the United Provinces uncipalities Act, 1916.”

As a result of this amendment an additional tax became chargeable from every passenger in the fare payable by him was not less than Re. 1. The petitioners have alleged that most of them are paying passenger tax under s. 3(1) on the lump sum basis and they have been also paying additional tax @ 10 paise per passenger. The newly added sub-s. (4) makes applicable to the additional tax the provisions applicable to the passenger tax leviable under sub-s. (1) of s. 3 to that additional tax could also be paid in lump sum at the option of the operator. The passenger tax on lump sum basis and additional tax @ 10 paise per passenger. On 17th April, 1974, the State Government issued a notification amending r. 5 of the Rules framed under the Act by adding sub-r. (4) under which the manner and method of payment of additional tax in lump sum was laid down. Simultaneously the State Government issued another notification validity whereof is challenged in the present writ petitions. This notifications runs as under –

“In exercise of the powers under sub-s. (4) of s. 3 of the Uttar Pradesh Motor Gadi (Yatri Kar) Adhiniyam, 1962 (U.P. Act No. VIII, 1962), the Governor is pleased to direct that the second proviso to sub-s. (1) of s. 5 shall apply in relation to the additional tax with the modification that the levy of the additional tax under sub-s. (3) of s. 5 shall have the effect of increasing the lump sum agreed upon the first proviso to sub-s. (1) of s. 5 -(i) in the case of agreements in force on the date of commencement of the Uttar Pradesh Taxation Laws (Amendment) Act, 1972 by twenty five per cent for the remainder period of the agreement;

(ii) in the case of agreements made between the date of the commencement of the Uttar Pradesh Taxation Laws (Amendment) Act, 1972 and the date of this notification by twenty five per cent.

There shall be no increase in the case of agreements relating to such routes where the maximum tare is less than rupee one”

In pursuance of this notification the Passenger Tax Officer, Jhansi issued notices to some of the petitioners requiring them to pay varying amount. The amounts demanded were calculated in the followings manner :-

To the total passenger tax payable under the lump sum agreement was added the additional tax which the petitioners had already paid.

Twenty five per cent of this total was again added and after deducting from it the additional tax already paid, the operators were required to pay the balance.

To petitioners have challenged these notices as also the notification of 17th April, 1974.

The impugned notification seeks to enhanced by the 25 per cent the passenger tax payable in lump sum under the first proviso to sub-s. (5). Under the second proviso to s. 5(1) an increase in the lump sum could only be made if there was a change in the rate of tax there has been no such change and indeed there could be none because the State Government is already charging the maximum permissible under the Act. So far as the Additional tax under sub-s. (3) is concerned, there has been no increase in the rate of this tax either. It continues to be 10 paise per passenger in the case of operators who had not opted for its payment on lump sum basis. In these circumstances the nature of this tax was not clear to us. We accordingly called upon the standing counsel to file an affidavit, making clear the nature of enhancement. The standing counsel has not filed, any affidavit, obviously, because the State Government has no explanation to offer. If there has been no change in the additional tax there cannot be a change in the lump sum payable in lieu thereof. The enhancement of 25 per cent in the lump sum on passenger tax leviable under sub-s. (1) of s. 3 could be in lieu of the additional tax payable under sub-s. (3) out from the impugned notices issued by the passenger tax officer Jhansi it appears that the petitioners are required to pay not only the additional tax already paid by them in respect of each passenger but an additional amount of 25 per cent of the lump sum payable under sub-s. (1) of s. 3. This demand is wholly unauthorised. As already stated under the second proviso to s. 5 an increase can be made in the lump sum payable either of passenger tax or of additional tax only if there has been increase in the rates of such taxes. But since there has been no increase the enhancement contemplated by the notification appears to be without jurisdiction.

In the result, the petitions succeed and are allowed. The impugned Notification No. 2853/T/XXX-4-2-24-p-1973 dt. 17th April, 1974 is quashed. The notices of demand issued in pursuance of this notification are also quashed. The petitioners are entitled to their costs.