1. This appeal is by a person who had got possession of a registered motor vehicle namely a bus from the registered owner to ply the vehicle on a route for which the person had permit. The appellant got possession of registered motor vehicle bearing registration No. KA-19-3161 in or around the year 1998 as can be inferred from a perusal of the endorsement so made on the stage carriage permit in respect of which the vehicle was sought to be covered. As per. Form No.34, application dated 10.02.1998 registered owner of the vehicle was described as lessor and the appellant as permit holder. The present appeal is one basically presented by the appellant to dispute his liability to pay motor vehicle tax in respect of this vehicle for the period from 01.03.1999 co 30.11.2004 and to make payment of Rs.5,55,580/- in terms of determination made by the Assessing Authority, RTO as per order dated 31.07.2008, Annexure E. The appellant as well as the registered owner who were made jointly liable to pay this amount of tax while determining this liability, the RTO and Taxation Authority, Shimoga did not agree with the stand of the appellant that the appellant at any rate and even as per statement of the financier who had financed the vehicle purchased by the registered owner, did not have possession of the vehicle on and after 25.06.2007 where after possession of the vehicle if at all was only with the registered owner and not with the appellant etc. The Taxation Authority rejected this stand for the reason that no supporting material was placed before the authority, that admittedly the present appellant got possession of the vehicle as per agreement and no intimation of surrender of possession of the vehicle to the registered owner or any one else or present condition of the vehicle had been given to the authority and therefore it must be held that the appellant is in continuous possession of the vehicle and therefore the liability of the possessor did not cease.
2. Being aggrieved, the appellant preferred an appeal Commissioner for Transport, Shimoga in appeal No. DCT.SMG.Tax-07/2008-09, Annexure F. An appeal of this nature is required to be accompanied by part deposit of the demanded amount on an order passed in an application filed u/s 15(2) of the Karnataka Motor Vehicles Taxation Act, 1957 (for short ''the Act).
3. It appears that the appellant had made one such application and. the Appellate Authority by order dated 01.10.2008 had permitted the appellant to deposit 50% of the Tax demanded by way of cash and balance 50% by way of security etc.
4. The deposit and furnishing of security was not complied by 17.11.2008 and as the Appellate Authority found the present appellant had not complied with it''s order, dismissed the appeal for non compliance. It is against this order the present appellant had preferred writ petition No.2644/2009 before this Court,
5. For a good measure. the appellant questioned the legality of Rule 31-A of Karnataka Motor Vehicles Taxation Rules, 1957 ( for short The Rules) wherein the manner of compliance of Section. 15(2) of the Act is effectuated. The rule was challenged as ultra vires.
6. Section 15 (2) of the Act and Rule 31-A of the Rules reads as under:
Section 15(2)(a) : No appeal shall be entertained by the Appellate Authority unless it is accompanied by satisfactory proof of the payment of the tax not disputed in the appeal.
Rule 31-A. Furnishing of security. - (1) (a) for the purpose of clause (a) of sub-section (2) of Section 15, the appellant shall produce no-due-certificate issued by the Taxation Authority to the effect that all the undisputed amount are paid by the appellant.
7. The matter was contested after issuing notice to respondents. Learned Single Judge heard the learned Counsel for the petitioner and learned AGA for the respondent, but found no merit for interference either on the question of challenge to Rule or on the merits of the case, but nevertheless allowed further eight weeks in favour of the petitioner to get his appeal before the Appellate Authority revived by depositing the entire amount as determined by Taxation Authority.
8. The appellant instead of taking advantage of this order has preferred this appeal contending inter alia that the order of the learned Single Judge is also not sustainable as the Single Judge has not considered various contentions urged etc.
9. We have heard Sri. N. E. Nagesh, learned Counsel for the appellant and Smt. S. Sujatha, learned AGA for the respondents extensively including several other contentions urged.
10. Liability of a person who is found in possession of registered vehicle to pay motor vehicle tax under the provisions of the Act is only for the duration for which the person is in possession and in this regard Sri Nagesh is unable to point out to us from the record that the appellant had got rid of the possession of the vehicle at any point of time after he got possession of the vehicle pursuant to the agreement between him and the registered owner of the vehicle.
11. Though. Mr. Nagesh made a valiant effort to convince us that on and after 25.06.2007 the appellant cannot be attributed possession of the vehicle, unfortunately the premise on which this submission proceeds namely the financier of the vehicle had seized the vehicle earlier and had restored possession of the vehicle to the registered owner is not so available en the record but on the contrary Smt. Sujatha learned AGA points out that the financier had given statement that he did not even seize the vehicle even as the vehicle could not be traced etc.
12. Though M. Nagesh has sought to place reliance on earlier decisions of this Court to contend that the appellant has no liability when he is not in possession of the vehicle and that the very purpose of entering into lease agreement and getting possession of the vehicle was to cover it by the permit, validity of which permit was only upto 21.04.2000 and thereafter permit having not been renewed. It should be taken that the appellant not having any further use of the vehicle beyond the validity period of the permit could not have get possession of the vehicle, such inference cannot be drawn in this writ appeal for the reason that duration of the validity of a permit is not the criteria for attracting liability for payment of tax under the provisions of the Act.
13. Under the charging Section 3(1) of the Act tax liability is on the vehicle which are suitable for use on public road and primary liability is on the registered owner of the vehicle to pay tax. Section 4 of the Act ropes in even a. per 3on who is in. possession of the vehicle or a person who is in control of the vehicle also to be jointly liable for payment of tax along with registered owner of the vehicle.
14. In this scenario when once a vehicle that can be on use on public roads was admittedly in possession of the appellant and unless the appellant has demonstrated that he has get rid of possession of the vehicle in a manner recognised by law, mere submission he was not having possession of the vehicle and was not using the vehicle cannot be accepted as non possession of the vehicle.
15. In so far as challenge to the validity of the rule contending that it is ultra vires the section 15 of the Act is concerned we find. that u/s 15 while the admitted tax or portion of the tax demand not disputed or not made subject matter of the appeal before the Appellate Authority has to be paid in full, so far as disputed amount is concerned, discretion is allowed in favour of Appellate Authority in terms of proviso to sub section (2)(b) of Section 15 to grant relief by accepting security in lieu of deposit in respect of both admitted tax liability and disputed tax liability.
16. In the present case it is found that even as appellant the entire amount was disputed by the appellant. Be that as it may. The statutory provision is that the admitted amount is to be compulsorily deposited and in respect of the disputed amount an application for relaxation can be made.
17. Rule 31-A in our opinion is nut only for effectuating the proviso to clause (b) of sub-Section (2) of Section 15 but also allows further discretion to enable the authority to entertain the appeal subject to imposition of such condition. In fact the Section itself says the discretion and the deposit is in manner prescribed under the Rules arid not free from imposition of conditions.
18 Therefore we hold that the Rule is not at variance with the provisions of Section 15 but one for effectuating the same. Even requirement for compliance in terms of the Rule is incorporated in the section itself and therefore the conditional order passed by the Appellate Authority for deposit of 50% by cash and 50% by security cannot be held to be an order at variance with the provisions of the Act. The challenge to the Rule fails. In the result, we find no merit either in the facts and circumstances in the instant case cir on the ground the Rule being ultra-virus and therefore the appeal is dismissed.
