HARDEV MOTOR TRANSPORT versus STATE OF M.P. AND ORS.

Citation: [2006] SUPP. 7 S.C.R. 766 · Decided: 19-10-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
HARDEY MOTOR TRANSPORT 
v. 
STA TE OF M.P. AND ORS. 
OCTOBER 19, 2006 
B 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991 (as amended 
by Madhya Pradesh Motoryan Sanshodhan Adhiniyam, 2004): Entry JV 
C Clause (g) of the First Schedule read with Explanation (7) of the First 
Schedule. 
Public service vehicle-Motor vehicle plying without permit-Rate of 
tax-levy of penalty for non-payment of tax-Constitutional validity of-
Contract carriage permit holders allegedly used their vehicles as stage 
D carriage permits-They were asked to pay duty as if the vehicles were being 
plied without permit-They paid tax as specified for in permits granted in 
their favour as a contract carriage-The rate of tax of a contract carriage 
permit was more than that of the stage carriage permit-Held: For non-
payment of tax or for payment of tax for a wrong purpose, a penalty can be 
imposed-But a different rate of tax which is not contemplated under Section 
E 3 of the 1991 Act cannot be imposed by way of penalty-By taking recourse 
to Explanation (7) no new definition could be introduced-Moreover, no 
penalty can be levied by treating an owner having one kind of permit as 
having no permit only for alleged violation of the conditions of permit-
Hence, Clause (g) of Entry IV of the First Schedule of the 1991 Act as 
p amended by the 2004 Act read with Explanation (7) of the First Schedule 
declared unconstitutional-Motor Vehicles Act, 1988-Central Motor Vehicles 
Rules, 1989. 
Interpretation of Statutes: 
G 
Explanation-Role of-Held: The main provisions of the Act cannot be 
H 
defeated by inserting an Explanation-Even otherwise, the scope and effect 
of a provision cannot be enlarged 
Words & Phrases: 
766 
HARDEY MOTOR TRANSPORT v. STATE OF M.P. 
767 
"Plying without permit"-Meaning of-In the context of Entry IV Clause A 
(g} of the First Schedule read with Explanation (7) of the First Schedule of 
the Madhya Pradesh Motory1an Karadhan Adhiniyam, 1991 (as amended by 
Madhya Pradesh Motoryan Sanshodhan Adhiniyam, 2004). 
The appellants are holders of contract carriage permits. On allegations 
that the appellants had been using their vehicles as stage carriage permits, B 
the vehicles were detained. The appellants were asked to pay duty as if the 
vehicles were being plied without any permit. The appellants had paid tax as 
specified for in permits granted in their favour as a contract carriage. The 
rate of tax of a contract carriage permit is more than that of the stage carriage 
pe~ 
c 
The constitutional validity of Clause (g) of Entry IV of the First Schedule 
of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991 as amended by 
Madhya Pradesh Motoryan Sanshodhan Adhiniyam, 2004 read with 
Explanation (7) of the First Schedule thereof is in question in these appeals. 
The following question arose before the Court:-
Whether penalty could be levied by treating an owner having one kind 
of permit as having no permit only for alleged violation of the conditions of 
the permit? 
Allowing the appea~ the Court 
D 
E 
HELD: 1. Section 3 of the Madhya Pradesh Motoryan Karadhan 
Adhiniyam, 1991 is the charging Section. It provides that the tax shall be 
levied on· every motor vehicle used or kept for use in the State at the rates 
specified in the First Schedule. The levy of tax, therefore, is on the motor F 
vehicles. Its rate may vary keeping in view its use or the nature thereof. 
However, the use of a motor vehicle so far as public service vehicles are 
concerned would depend upon the nature of permit held by it. It is not in dispute 
that the appellants have been granted permit for plying their buses as contract 
carriage. Allegation against them is that they have been violating the terms 
and conditions of the permit by plying their vehicles as stage carriage. It is, G 
however, not in dispute that the rate of tax of a contract carriage permit is 
more than that of the stage carriage permit. (782-D, E, F] 
2.1. Explanation (7) of the First Schedule of the 1991 Act does not create 
any legal fiction. It provides for an inclusive definition stating that the words H 
768 
SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R. 
A 'plying without permit' in Clause (g) shall include plying of a public service 
vehicle on an authorized route or making a trip not authorized by a permit 
granted under the Motor Vehicles Act, 1988. [782-F, G[ 
2.2. The role of an explanation of a statute is well known. By inserti
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