NATIONAL TRANSPORT COMPANY versus STATE OF BIHAR

Citation: [1976] 3 S.C.R. 897 · Decided: 25-03-1976 · Supreme Court of India · Bench: HANS RAJ KHANNA · Disposal: Dismissed

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Judgment (excerpt)

' \' 
f 
NATIONAL TRANSPORT COMPANY 
v. 
STATE OF BIHAR 
March 25, 1976 
[H. R. KHANNA A..ND P. K. GOSWAMI, JJ.] 
897 
• 
Bihar Taxation on Passengers and Goods (Carried by Pf.4Plic Service Motor 
Vehicles} Act, 1961, .s. 2(d)-Owner, wha is-'ln-charge' of a vehicle, scope 
of 
Under s. 3 ( 1) and (2) of the Bihar Taxation on Passenaers and Goods 
(Carried by Public Services 
~lotor Vehicles) Act, 1961, every owner shall 
pay to the State Government a tax on all passengers and goods carried by a 
public motor vehicle. Under s. 2(d), 'owner' means not only the owner of 
the specified type of vehicle but also includes, inter alia, "any perS9!1 for the 
time being in-charge of such vehicle". Under s. 4(1) every owner liable to 
pay tax shall apply for registration, and under s. 6 every owner shall furnish 
the prescribed return to the prescribed authority. Section 18 provides _for penal-
ties for failure to apply for registration or to su~mit the return. 
The assessee was the sole transporting company of the cement of a manu-
facturing company. 
Since it did not have its own fleet of trucks, Jt used to 
engage trucks for use in its transport work. It was provi9ing petrol and oil for 
the running of the trucks in the transport work although tbe prices paid by the 
assessee were later on adjusted in the hiring charges. The 
assess~e was 
obtaining the receipts of delivery of the goods to the various stockists indicat-
ing the quantities of cement received through a particular vehicle. 
On delivery 
to the appellant of the buyers' receipt by the truck owner or his representative, 
the bills of hire charges of the truck owner were paid by the appellant as per 
the agreement between the appellant and the truck owner. The assessee was 
maintaining a complete record of the trucks used by it for the transport work, 
of the \barges realisable and realised from the stockists on account of freight 
payable by 1hen1, and of the charges actually paid to the .truck owners. The 
assessee was not registered under s. 4. 
After a surprise check, the total taxable 
amount of the assess:ee was determined and the tax and a pehalty were imposed 
on the assessee. The assessee's appeal, revision to the tribunal, and reference 
to the High Court, were all decided against the assessee. 
Dismissing the appeal to this Court, 
A 
B 
c 
D 
E 
HELD : The appellant was in-charge of the trucks for the purpOSe of its 
F 
business 'during the entire course of transportation of the cement frcim the 
factory to the various stockists and, as such, came within the definition of 
owner under s. 2(d). [904 D.E] 
( 1) Whether a certain person is in-charge of the vehicle 
for the 
time 
being depends on the particular facts of each case. 
Beihg 'in-charge' of tho 
vehiclt• in the context of the vruvisions of the Act, does not relate to mere 
physical charge or control in the process of movement of the vehicle from one 
l)lace to another but 'to charge or control' for fulfilment of the le2al obliga-
tion under the Act for payment of taxes for the carriage of goods or passen-
gers. 
The words "for the time being in-charge of such vehicle" have to be 
comprehended in the context of the provisions of the taxing statute and these 
words have nexus with the actual realisation and approprialion of the freight 
for the goods carried by the vehicle. 
In a given case, the person, who is for 
the time being in-char!!\' of the loaded truck and who or on whose behalf 
some one like a driver or conductor received the freight or fare. is also a 
owner within the meanin!!: of the definitioh in s. 2(d). [9Q3 C.D; 904 C-D] 
(2) On the facts of the present case the appellant took full responsibility 
for the carriage of the goods from the factory to various destinations. Tue 
freigbt had been realised by the appellant from the stockists and the truck 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
898 
SUPREME COURT REPORTS 
[1976] 3 S.C.R. 
owner received only 'hire cb.arges'. There is nothing to shO\\' nor is t4ere any 
averment by the appellant that those charges included the taxes under the Act. 
The matter might have been different if the truck owners had been given 
the tax collections in addition to the hire charges. 
Further tlie absence of 
any prov·ision for tax payment by the truck owners in the agreement militates 
against. the 
content~on that it is only the truck owners thrtt are liable. [90'2 
B-C, 0•.903 BJ 
(3) The case of Jagir Singh v. State oi Bihar [19·761 2 SCR 809 was an 
app

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