LexHINDUSTAN AERONAUTICS LTD. ETC. versus REGISTERING AUTHORITY AND ORS.
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A HINDUSTAN AERONAUTICS LTD. ETC. v. REGISTERING AUTHORITY AND ORS. SEPTEMBER I 0, 1999 B [S. RAJENDRA BABU AND R.C. LAHOTI, JJ.] Orissa Motor Vehicles Taxation Act, 1986-Section 2 (7)-Motor vehicles belonging to appellant used to transpoi·t children of its employees to school/college are not "Contract Carriage"-Chart specifYing rates is to C regulate use of vehicle than for making profit-"To ply for hire" implies that vehicle runs regularly for a reward or that customers are solicited to use vehicle for a price-Entry 4 of the Schedule to the Act-a charge under this Entry cannot be attracted when there is mere use without "hire or reward". D The appellant Company used some of its vehicles for transporting children.J>f its employees to school/college regularly and sometimes hired them out to employees at certain fixed rates for private use, after due approval of concerned authorities. The Motor Vehicle Department, after checking some of the vehicles, issued a notice and seized the vehicles on the ground that they are "Contract Carriages" and had to pay a higher rate of E tax. The Company paid the differential tax but contested the view of the department and claimed a refund. The taxing officer rejected the claim. The appellate authority also rejected the appeal holding that there was overwhelming evidence to show that the vehicles were used for making money. The Revisional Authority upheld the order of the Appellate authority F on the ground that vehicles were also used by outsiders; children of employees were not connected with the business of the Appellant Company; buses were not run by educational institutions. High Court upheld order of taxing officer. Hence this appeal. The appellants contended that the vehicles cannot be termed as G "Contract Vehicles" relying on Mis Tata Engineering and Locomotive Co. H Ltd v. The Sales Tax Officer and Regional Transport Officer, Poona and Anr., AIR (1979) SC 343 and Hindustan Zinc Ltd. and Anr. v. State of Rajasthan & Ors., AIR (1989) Rajasthan 124. Allowing the appeal, the Court 296 - I HINDUSTAN AERONAUTICS LTD. v. REGISTERING AUTHORITY 297 IJELD: 1. The High Court and the authorities under the Motor Vehicles A Act were not justified in either imposing the higher rate of tax under Entry 4 of the Schedule to the Act or upholding the same when challenged. Although the circular is captioned "Revision of charges to be levied for private use of Company's Vehicles", it is made clear that the policy of the company is to discourage private use of company's transport or vehicles but wherever B it is considered necessary to permit such use in unavoidable cases, the officer concerned will intimate the employees of the revised rates before forwarding the requests to the General Manager for approval. Thus the rates specified are not by way of an offer to the general public but to regulate the rise of the vehicles in a particular manner. The buses are not plied for hire or reward. And, in addition to that, the vehicles are used mainly for their C employees and their children as part of the welfare measure of the employees. If the members of the family of the employees, like the spouses or children, are allowed to travel in those buses, it should not be treated as a vehicle being plied for "hire or reward". In such circumstances, the authorities were not justified in treating the vehicles as being plied for "hire or reward". They D have lost sight of the fact that the requirement to attract the charge under Entry 4 of the Schedule to the Act was "plying of motor vehicles for hire" and not mere user. [302-E-H) I.T.l. limitedv. Passenger tax Officer, AIR (1996) Allahabad 79; TATA, • Engineering & Locomotive Co. Ltd. v. The Sales Tax Officer@ Regional E Transport Officer, Poona & Anr., [1979) 2 SCR 357 and Smt. HM T. Sitamma & Anr. v. State of Karnataka & Ors., AIR (1979) Karnataka 211, distinguished. 2. "A vehicle plies for hire" means that it is regularly used for such hire, that is, the vehicle is offered for such service regularly. The expression. "to ply for hire" means to exhibit the vehicle in such a way as to invite those F who may desire to hire it for travel in it on payment of usual farP.s or to offer its use thereby soliciting customers. (300-H; 301-A] Sales v. Lake & Ors., (1922) 1 KB 553, relied on. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7253 of 1997 Etc. G From the Judgment and Order dated 1.2.95
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