STATE OF U.P. AND OTHERS versus SUKHPAL SINGH BAL ETC. ETC.

Citation: [2005] SUPP. 2 S.C.R. 1135 · Decided: 02-09-2005 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

,_ 
STATE OF U.P. AND OTHERS 
A 
v. 
SUKHPAL SINGH BAL ETC. ETC. 
SEPTEMBER 2, 2005 
B 
[B.P. SINGH AND S.H. KAPADIA, JJ.] 
Uttar Pradesh Motor Vehicles Taxation Act, 1997: 
Section 10(3)-Penalty-Default in payment of additional tax, payable 
in advance-Twenty five percent of the due amount prescribed for goods C 
carriage playing under pern1its granted by authorities within UP while ten 
time of due amount for vehicles playing under permits granted by authorities 
au/side U.P.-Validity of-Held, provision not ultra vires the Articles 14 and 
19(l)(g) of the Constitution. 
Fiscal statutes-Taxation-Default-Imposition of ten items penalty--
Held, valid, deterrence is the main theme or object behind such imposition. 
Words & Phrases : 
Penalty-Meaning of 
The tanker of the Respondent having national permit, valid for the 
states of Chattisgarh, Maharashtra, Uttar Pradesh and Andhra Pradesh, 
issued by the Regional Transport Authority, Durg (Madhya Pradesh) was 
seized by Assistant Regional Transport Officer, Lalitpur, On the application 
made for the release of the vehicle, the Assistant RTO passed an order 
directing the appellant to pay Rs. 5100 as composite tax plus ten times 
under section 10(3) of the said 1997 Act. The order of penalty was challenged 
by the appellant by way ofa writ petition in the High Court of Allahabad, 
in which the validity of section 19(3) was pat in issue. The High Court 
holding the provision oppressive, coercive and unreasonable, dtclared 
section 10(3) of the Uttar Pradesh Motor Vehicle Taxation Tax, 1997 as 
ultra vires articles 14 and 19(l)(g) of the Constitution. 
D 
E 
F 
G 
Appellant contended that on account of huge evasion of tax, the 
legislature had to enact section 10(3) providing for a deterrent penalty as H 
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SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R. 
A 
the State of U.P. has a vast boundary and the vehicles could enter from 
distant corners without payment of statutory dues at the entry point. It 
was further contended that _additional tax is payable in advance by the 
goods carriage oper"lting under national permit granted by the authorities 
within U.P. as well as by authorities outside U.P. In case breach occurs 
B in payment of additional tax within the period stipulated, a penalty of 
twenty five per cent of the due amount has been prescribed for goods 
carriage playing under permits granted by authorities within U.P., whereas 
ten times penalty is imposed for the same offence on transport vehicles 
having national permit granted by authorities outside U.P. as it was found 
c that in the former case, the authorities within the State of UP had better 
control as compared to goods carriages registered outside the State ofU.P. 
playing under the national permit under section 88(12) of the M.V. Act, 
1988 and, therefore, there was no discrimination between the two categories 
as alleged. 
D 
Respondent, on the other land, contended that the imposition of ten 
times penalty in any event was harsh, unreasonable, unconscionable and 
confiscatory in nature. It was contended that on the composite tax of Rs. 
500, ten times penalty would come to Rs. 51000, which was unreasonable 
and, therefore, violative of article 19(1 )(g) of the _Constitution. It was 
E urged that penalty up to ten times could have been imposed so that in 
genuine cases, the respondents could be made liable for lesser penalty in 
cases of mistakes is non-payment of tax. However, in the present case, 
under section 10(3), ten times penalty at a fixed rate on composite tax was 
harsh, arbitrary and unreasonable as no opportunity is provided to the 
F 
alleged offending vehicle to explain its case and to get the penalty reduced. 
G 
It was urged that in imposition of ten times penalty, there was no 
adjudication and determination of the quantum. It was urged that to 
impose ten times penalty without determination violated the rights of the 
respondent under Articles 14 and 19(l)(g) of the Constitution. It was next 
contended that the imposition often times penalty was discriminatory and 
irrational as for the same offence in respect of vehicles falling under 
section 9(3), penalty does not exceed twenty five per cent of the due 
amount, whereas transport vehicle playing in UP under national permit 
on default is liable to ten times penalty and, therefore, the said levy was 
unreasonable, irrational and discriminatory and consequently, violative 
H of Article 14 of the Constitution. 
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