K.M. CHIKKAPUTTASWAMY ETC. versus STATE OF ANDHRA PRADESH AND ORS.

Citation: [1985] 3 S.C.R. 890 · Decided: 23-04-1985 · Supreme Court of India · Bench: A.P. SEN · Disposal: Appeal(s) allowed

Judgment (excerpt)

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890 
K.M. CHIKKAPUTTASWAMY ETC . 
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STATE OF ANDHRA PRADESH AND ORS. 
April 23, 1985 
(A.P. SEN AND E.S. VENKATARAMIAH, JJ .] 
A.ndhra Pradesh Motor Vehicle! Taxation Act, 1963, s. 9 (1)-Inler-State 
Bus Permits-Exemption from payment of tax-Withdrawal without issuing notifi-
cation under section 9(/)(b)-Whether valid. 
Motor Vehicles Act, 1939, S. 63(3)-lnter-State agreements-Tax exemp-
tion-Withdrawn on the recommendation of Honie Secretaries:of two States-
Whether recommendatory In 
nature-Acceptance by State Government-If 
necessar1. 
The appellants were operating stage c01.rriage services on inter-State routes 
between the States of Mysore and Andllra Pradc;;h. 
The procedure envisaged 
counter-signature of permits in pursuance t1J the inter-State agreements entered 
into by- the two States under s. 63 (3) of the Motor Veh;cles Act, 1939. On 
March 27, 1963 the Government of Andhra Pradesh issued a notification under 
s. 9 (1) of the Andhra Pradesh Motor Vehicles 1axation Act, 1963 exempting 
from the payment of tax under the said Act of stage carriage! registered in the 
State of Mysore and operating on routes which lie in both the State! of Mysore 
and Andhra Pradesh. The appellants satisfied the conditions eavisage4 in the 
notification and were exempted from payment or Motor Vehicle tax. 
On January 25, 1968 the State of Mysore published and approved a 
scheme under s. 68 Dor the Motor Vehkles Act. 
fbe [scheme authorised the 
State Transport Undertaking in the State or Mysore to operate exclusively stage 
carriage services on certain routes and the :said scheme came into force with 
effect from January 1, 1959. The scheme e'.lvisaged that the ;existing permit 
holders on the inter-State routes could continue to operate on such {inter-State 
routes subject to the condition that their permits would be rendered ineffective 
on the over-lapping portions or the notified routes which lay within the State of 
Mysore. After the scheme came into force the question of renewal of counter-
signatures of certain stage carriages permits came up for consideration and the 
authorities in the State of Mysore declined to countersign the stage carriage 
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k. M. CHIKKAPUTTASWAM\' v. ANDliRA PRADESH 
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permits. Consequently the operators in the State of Andhra Pradesh could 
not continue to operate their services on the notified routes. On their repre-
sentation5 a meeting or the Home Secretaries of the two States was held on 
November 7, 1%9 and it was resolved that notwithstanding the inter-State 
Agreements, the ten routes which included the three routes on which the appel-
lants were operating the stage carriage services should be deleted from -the 
purview of the inter-State Agreements and that the Mysore State operaters who 
were operating the services on inter-State routes would have to pay tax for 
plying the motor vehicles in the Andhra Pradesh from the quarter commencing 
from January 1, 1970. 
No notification was, however, issued under s.-9 (1) of the Act cancelling 
the exemptions which had been grarited earlier in respect of the motor vehicles 
which were operating on the inter~State routes including the motor vehicles of 
the appellants. 
A demand was made. by the officers in the State of Andhra Pradesh 
asking the appellants to pay tax under the Act" with effect from January 1, 
1970. 
BeiP.g aggrieved by the· notices of demand, the appellants filed Writ 
Petition luzder Article 226 questioning the· validity of the notices of demand 
issued to them contending (i) that in the absence of a notification issued under 
Section 9 (1) (b) of the Act revoking the exemption which had been granted 
earlier. it was not open to the State of Andhra Pradesh or any of the ·officers 
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functioning under the Act to demand payment of motor vehicles tax under the 
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Act in respect.of their motor vehicles, (ii) that the impugned notices of the 
demand issued by tbe authorities caUing for payment of motor vehicles tax with 
effect from January 1, 1970 were invalid and unvenforceable and (iii) that since 
the appellants had spent lar~ge sums of monei on the busineess of runriing the 
stage carriage serviceS on the rbutes in question, it was not open to the ~State of 
Andhra Pradesh to withdraw the said concession unilaterally. 
The High Court rejected the contentions and dismissed the Writ Petition 
holding tbat since it was not necessary to issue a notification under s. 9 [(1) fOr 
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