# JAGIR SINGH & ORS. ETC. ETC v. STATE OF BIHAR & ANR. ETC. ETC

- **Citation:** [1976] 2 S.C.R. 809
- **Court:** Supreme Court of India
- **Decided:** 1975-11-26
- **Bench:** A. N. Ray, K. K. Mathew, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jagir-singh-ors-etc-etc-v-state-of-bihar-anr-etc-etc-6555
- **Pages:** 9

## Headnote

Biluir Taxation on Passengers and Goods (Carried by Public Service Motor
Vehicles) Act, 1961--Sec. 3-'0wner'-lf includes any person for the time
being in charge of the Vehicle-Liability to pay tax-On )>'hom rests.
Section 2(d) of the Bihar Taxation on Passengers and Goods (carried by
Public Service Motor Vehicles) Act, 1961, defines "owner" as the owner of a
public service motor vehicle and includes the holder of a permit under the Motor
Vehicles,,.Act, 1939, in respect of a public _service motor yehicle or l)ny person
for the time being jn .charge of such vehicle or re~pCl!lsible for the management of the 111a-c:e of' business of such: owner.
Sect10n 3(2) of the Act provides that every owner shall pay to the State Government the amonnt of tax
due under s. 3.
Sub-section 3 provides that every passenger carried by a public
service motor vehicle and every person whose goods are carried. by such vehicle
shall be liable to pay to the owner the amount of tax payable under s. 3 and
every owner would recover such tax from such owner or person as the case may
be.
A
B
c
There are identical provisiom in the different
State
Acts. The
term
D
~'operator'' used in some Acts, instead of the wo1~d "owner'', means n_ny per~on
whose name is entered in the permit as the permit-holder or any person hav\11g
the possession or contro1 of such vehicle.
In a petition under Art. 32 of the Constitution it was contended that the
words "or any person for the time being in charge of such vehicle" in the definition of "owner" mean that if there are two types of owners for a particular
vehicle, it will be the owner who transports the goods carried by the vehicle
wl:Jo is responsible to pay the tax.
E
Dismissing the petition,
HELD : The liability to pay tax is of the permit-holder in all cases. The
permit-holder is the owner within the definition of the word "owner" in the
Bihar and other State Acts and is also the "operator'' within the meaning of the
word "operator" in other Acts.
[817G-H]
(1) The definition of the term "owner" is exhaustive and intended to extend_ the m_eaning of the term by including within its sweep bailee of a public
F
earner vehicle or any manager acting on behalf of the owner. The intention
of the Legislature to extend the meaning of the term by the definition given by
it will be frustrated if what is intended to be inclusive is interpreted to-exclude
the actual owner.
[815H]
(2) Th~ words "or any person for the time being in charge of such vehicle
.?r _regmnsible for the management o.f the place of business of such, owner"
mdicate that the permit-holder will include any person who is in charge of such
vehicle or any person who is tesponsible for the management of the place of
G
busmess of such_ owner. The owner cannot escape the liability by stating that
any person i's for fhe time being in charge of such vehicle and therefore such
person is the, owner and not the permit-holder.
[815E]
'
·
(3) (a) Once 'it isl found that the Legislature levies tax on passengers and
goods carried by public service motor vehicles, it becomes the responsibility
of the owner of the vehicle not to permit the vehicle to be used until the tax
is paid.
[8160]
. (b) The operational arrangement has no relevance to the liability to taxaH
.!ion. The person who a!lows his vehicle to be used for the purpose' of carrymg goods or passengers i~ the permit-hold<;r and, therefore, the liability to pay •
tax attaches to the permit-holder as the owner of the vehicle. The fact that
A
S LO_
SUPREME COURT REPORTS
(1976) 2 S.C.R.
these licensed agents have to furnish the operator~ with correct figures of freight
receivable by them shows not only that they are accountable to the own·~rs or
operators but also that licensed agents are nol the owners or operators. [816C;.
817E]
(c) Section 59 and 61 of the Motor Vehic\'es Act, 1939, indicate that a
_ .
permit cannot be transferred.
[817G]
B
ORIGINAL
JURISDICTION :
Writ
Petitions
Nos. - 110,
116J
172, 321-327, 527-529, 590-593,

## Text

JAGIR SINGH & ORS. ETC. ETC.
v.
STATE OF BIHAR & ANR. ETC. ETC.
November 26, 1975
809
(A. N. RAY, C. J., K. K. MATHEW AND N. L. UNTWALIA, JJ.]
Biluir Taxation on Passengers and Goods (Carried by Public Service Motor
Vehicles) Act, 1961--Sec. 3-'0wner'-lf includes any person for the time
being in charge of the Vehicle-Liability to pay tax-On )>'hom rests.
Section 2(d) of the Bihar Taxation on Passengers and Goods (carried by
Public Service Motor Vehicles) Act, 1961, defines "owner" as the owner of a
public service motor vehicle and includes the holder of a permit under the Motor
Vehicles,,.Act, 1939, in respect of a public _service motor yehicle or l)ny person
for the time being jn .charge of such vehicle or re~pCl!lsible for the management of the 111a-c:e of' business of such: owner.
Sect10n 3(2) of the Act provides that every owner shall pay to the State Government the amonnt of tax
due under s. 3.
Sub-section 3 provides that every passenger carried by a public
service motor vehicle and every person whose goods are carried. by such vehicle
shall be liable to pay to the owner the amount of tax payable under s. 3 and
every owner would recover such tax from such owner or person as the case may
be.
A
B
c
There are identical provisiom in the different
State
Acts. The
term
D
~'operator'' used in some Acts, instead of the wo1~d "owner'', means n_ny per~on
whose name is entered in the permit as the permit-holder or any person hav\11g
the possession or contro1 of such vehicle.
In a petition under Art. 32 of the Constitution it was contended that the
words "or any person for the time being in charge of such vehicle" in the definition of "owner" mean that if there are two types of owners for a particular
vehicle, it will be the owner who transports the goods carried by the vehicle
wl:Jo is responsible to pay the tax.
E
Dismissing the petition,
HELD : The liability to pay tax is of the permit-holder in all cases. The
permit-holder is the owner within the definition of the word "owner" in the
Bihar and other State Acts and is also the "operator'' within the meaning of the
word "operator" in other Acts.
[817G-H]
(1) The definition of the term "owner" is exhaustive and intended to extend_ the m_eaning of the term by including within its sweep bailee of a public
F
earner vehicle or any manager acting on behalf of the owner. The intention
of the Legislature to extend the meaning of the term by the definition given by
it will be frustrated if what is intended to be inclusive is interpreted to-exclude
the actual owner.
[815H]
(2) Th~ words "or any person for the time being in charge of such vehicle
.?r _regmnsible for the management o.f the place of business of such, owner"
mdicate that the permit-holder will include any person who is in charge of such
vehicle or any person who is tesponsible for the management of the place of
G
busmess of such_ owner. The owner cannot escape the liability by stating that
any person i's for fhe time being in charge of such vehicle and therefore such
person is the, owner and not the permit-holder.
[815E]
'
·
(3) (a) Once 'it isl found that the Legislature levies tax on passengers and
goods carried by public service motor vehicles, it becomes the responsibility
of the owner of the vehicle not to permit the vehicle to be used until the tax
is paid.
[8160]
. (b) The operational arrangement has no relevance to the liability to taxaH
.!ion. The person who a!lows his vehicle to be used for the purpose' of carrymg goods or passengers i~ the permit-hold<;r and, therefore, the liability to pay •
tax attaches to the permit-holder as the owner of the vehicle. The fact that
A
S LO_
SUPREME COURT REPORTS
(1976) 2 S.C.R.
these licensed agents have to furnish the operator~ with correct figures of freight
receivable by them shows not only that they are accountable to the own·~rs or
operators but also that licensed agents are nol the owners or operators. [816C;.
817E]
(c) Section 59 and 61 of the Motor Vehic\'es Act, 1939, indicate that a
_ .
permit cannot be transferred.
[817G]
B
ORIGINAL
JURISDICTION :
Writ
Petitions
Nos. - 110,
116J
172, 321-327, 527-529, 590-593, 597-604, 643-648, 650, 680-681,
'
c
D
E
F
G
H
683-685, 687-688, 690-693, 695, 696-698, 734-766, 769-82fi, 827- -
952, 1058-1062, 1073-1086, 1088-1089,
1110-1115,
1193-1210.
~
1298-1300, 1301-1307 /1975).
'
(Petitions Under Article 32 of the Constitution of India).
AND
WRIT PETITIONS NOS. 576-577, 578-584 AND 607/1975.
For the Petitioners :
ln WPs. Nos. 110, 116-172, 643, & 607 /75 ; M/s. K. B. Rohatgi,
D. N. Gupta and V. K. lain, Advocates.
In WPs. Nos. 688, 852-863, 664-952, 1058-1062, 1073-1086,
1298-1300, 1304-1307/75: M/s. M. S. Ratta and S. K. Sabharwal,
Advocates.
In WP. Nos. 321-327, 527-529, 590-593, 650, 691, 697, 698,
1088-1089, 1110-1115 & 1193-1210/75 :
S.
T.
Desai,
Senior
Advocate (In WP. No. 321-327 only) (M/s. B. R. Kapur (Jn WPs.
Nos. 527-529 & 321-327) and T.S. Arora, Advocates, with him).
In WP. Nos. 597-604, 644-647, 683-685, 687, 692, 576, 578579, 580-584/75 : Mis. M. S. Ratta and S. K. Sa/Jharwal, Advocates.
In WP. Nos. 680-681, 689, 695-6.96/75 : S. C. Patel, Advocate
In WP. Nos. 690-693/75 : C. K. Rc.tnaparkhi,
Advocate
For
the Respondents :
In WPs. Nos. 110, 116-172, 590-593, 650, 697 and Respondent
Nos. 1 & 3.
In T-VPs. Nos. 647 & 693, Respondent Nos. 1, 3 & 4.
In WPs. Nos. 597, 576, and Respondent No. 1 In WP. No. 577
& 1193-1210/75 : Balabhadra Prasad Singh, Advocate General for
the State of Bihar.
(In WP. Nos. 110, 116-172, 321··327) U. P. Singh, Advocate in
all other matters.
For Respondent No. 1, 7 & 13, (In WP. No. 601/75), Respondent No. l, 3, 4 (In WP. No. 680 & 688, Respondent No. 1 & 5
In WP. 691, Respondent No. 1 & 9 In WP. No. 578-79, Respondent
No. 4 & 5 in WP. No. 600, 1073-86. Respondent No. 6 in WP. No.
690 and Respondent No. 7 in WP. No. 599/75 : M. C.
Bhandare,
\
j
'; "'::
JAGIR SINGH V. BIHAR (Ray, C.J.)
811
Senior. Advocate,· (In WP. Nos. 601, and 602/75 only), N. N. GosA
wami (lrt WP 769-806/75) and R. N. Sachthey (In all other petitions) , Advocates, with him) .
For: Respondent No. 1 & 7 In WP 603, Respondent No. l, 5-,7
In WP: No. 645, 695, Respondent No. 1 and 5-7 In WP. No. 10731086; Respondent No. 1 & 7 In WP. No. 584 and For Respondents
ln WP. 1208-1300: G.,N. Dikshit, Senior Advocate (In WP. No. 603
B
only), 0. P. Rana, Advocate, with him in all the petitions).
For Respondent No. 1 In WP. No. 598, 646, 692 and for Respondents.
In 581-82/75 : L. M. Singhvi, Advocate
General
for
the Slate of Rajasthan and S. M. Jain, Advocate.
Respdt. No. l, 3, 4, 6, 8 In WP. No. 604, Respdts In WP. No.
C
643, 698, 1110-1115, and Respdt. No. l, 7 & 8 In WP.
683-84,
Respdt. No. l, 6, 8 In WP. No. 696, Respondents in WP. No. 607
and 1088-89/75 : I. N. Shroff, Advocate.
For Respondent No. 1 & FP. 602, Respdt. 8 In WP 598 & 646,
Respdt. 1 In WP. No. 599 and 687, Respdt. Nos. 1 & 5 In WP. No.
685 and Respondents l, 5/3 ln WP. No. 689/75 :
V.
S.
Desai
D
Senior Advocate (In WP. Nos. 646 & 689/75), M. N. Shroff, Advocate, with him).
For Respdt. Nos. 1, 5, 6, 10 In WP. No. 600, Respdt. Nos. 2
& 5 In WP. 691 and Respondent Nos. 1 In WP. No. 689/75 : 0. P.
Sharma Advocate.
For Respondent No. 1 (In WP. Nos. 734-736/75: B. R. G. K.
Achar, Adv9cate.
The Judgment of the Court was delivered by
E
RAY, C.J.
The question raised in these petitions is whether the
petitioners are liable to pay tax under Bihar Taxation on Passencrers
and Goods (carried by Public Service Motor Vehicle)
Act,
1961
F
(hereinafter referred to as the Bihar Act).
The other petitioners raised similar question under Maharashtra
Tax on Goods (Carried by Road) Act, 1962; Rajasthan Passengers
and Goods Taxation Act, 1959; Madhya Pradesh Motor Vehicles
(Taxation on Goods) Act, 1962; Punjab Passengers and Goods Act
1952; the Gujarat Carriage of Goods Taxation
Act,
1962;
th~
Mysore Motor Vehicles (Taxation on Passengers and Goods Act
1961.
'
Reference may be made to the Bihar Act as typical of all
the
c~s~s covered by these petitions.
The pattern of all the
Acts
is
s1m1Jar.
At the. outset it may be stated that the validity of the Bihar Act
~as some years back challenged with regard to retrospective operation of the Act. This Court in Civil Appeals No. 16 and 17 of 1963
G
H
A
B
c
E
F
G
H
812
SUPREME COURT REPORTS
[1976] 2 S.C.R.
-R11i Ram Krishna & Ors. v. State of Biliar decided on 11 March,
1963 and reported in A.I.R. 1963 S.C. 1667 upheld the retrospective
operation of the Bihar Act.
Section 3 of the Bihar Act is the charging section. That section
provides that on and from the date on which this Act is deemed to
have come into force there shall be levied and paid
to the State
Government a tax on passengers and goods carried by a public service motor vehicle.
The other two relevant provisions in the Bihar Act are subsections ( 2) and ( 3) of the charging section 3 of the Act. The said
sub-section ( 2) provides that every owner shall, in the manner prescribed in section 9, pay to the State Government, the amount of lax
due under section 3.
Sub-section (3) provides that every passenger
carried by a public service motor vehicle and every person whose
goods are carried by such vehicle shall be liable to pay to the owner
the amount of tax payable under section 3 and every owner shall
recover such tax from such owner or person as the case may be.
. When the Act came into force such tax was levied and paid at
the rate of twelve and a half per cent of the fares and freights payable to the owner of such vehicle.
The rate of tax was
raised
to
twenty per cent under a notification dated 25 May, 1973.
There is also a provision in the Bihar Act for lumpsum payment
in lieu of the tax at Rs. 320 per month per vehicle.
Formerly, the
lumpsum was Rs. 160/- per month per vehicle with the carrying
capacity of the vehicle at 10 metric to:'.
Section 9 of the Bihar Act speaks of payment and recovery of
tax.
That section provides that before any owner furnishes any return under this Act he shall, in the prescribed manner, pay into the
Government Treasury the full amount of tax due from him under
this Act according to such return and shall furnish along with the
return a receipt from such treasury showing payment of
the
said
amount.
Further if any owner fails, without any reasonable cause,
to make payment of the tax due from him according to the return
furnished under section 6, the prescribed authority may direct that
the owner shall, in addition to the amount of tax payable by him,
pay by way of penalty, a sum not exceeding five rupees for every day
after the expiry of the period prescribed under the said section. The
amount of tax and penalty, if any which remains unpaid after the
date specified in the notice issued shall be recovered as an arrear of
land revenue.
The provisions in the different Acts in different States are identical to the provisions in the Bihar Act. The only material difference
in the Maharashtra, Gujarat and Mysore Acts is that instead of the
word "owner" of public vehicle the word used is the "operator" of
public vehicle.
JAGIR SINGH V. BIHAR (Ray, C.J.)
813
The expression "owner" is defined in the Bihar Act in section
2(d) thereof as follows:-
" "Owner" means the owner of a public service motor
vehicle in respect of which a permit has been granted. ~y a
Regional or State Transport Authority under the prov1S1ons
ot the Motor Vehicles Act 1939 and includes the holder of
a permit. under the said Act in respec~ of a publ!c service
motor vehicle or any person for the time bemg m charge
or such vehicle or responsible for the management of the
place of business of ~uch owner".
In the Maharashtra Act "operator" means any
person
whose
name is entered in the permit as ·the permit holder or any person
having the possession or control of such vehicle.
A
B
c
In all these petitions the petitioners are all holders of permit in
respect of public service motor vehicles.
The m~in contention. of
the petitioners is that the vehicles are hired by bookmg or forwardmg
agencies who have direct link with persons whose goods are carried
on the hired transport vehicles and they collect the fare and freight
as well as the tax, and, therefore, they should be liable for the tax
D
and not the petitioners.
The
petitioners
contend
that
the
defi.nition
of
"owner"'
speaks
of
the
following
two types of
owners. The first
type
is the owner of a public service vehicle in respect of which a permit
has been granted to such owner. The second category of owner is the
person who is in charge of such a vehicle for the time being and where
E
a vehicle is in charge of such, a person he is alone to be regarded as
an owner of the vehicle. The petitioners c·ontend that the words "or
any person for the time being in charge of such vehicle" in the definition of "owner" would indicate that the transport or booking agencies
which would take the public service motor vehicle on hire would be
owners within the definition of the word without being permit holders
in respect of these public service motor vehicles.
.
F
The petitioners rely on the words "or any person for the time being
in charge of such vehicle" to show that when the vehicle is in charge
of a person who is not the holder of the permit he is regarded as an
owner of the vehicle because he carries the goods and unless he is regarded as the owner, the consignor of the goods would not be liable
to pay the tax to the person for the' time being in charge as the owner
G
within the meaning of the definition. The petitioners amplify the contention to mean that if there are two types. of'°wners for a particular
vehicle it will be the owner who transports the goods and oollects the
tax, who alone is respunsible to pay to the Government the tax on
goods carried by the vehicle.
Tiie petitioners also rely on the definition of "agent" in the Bihar
Public Carrier (Licensing of Collecting, Forwarding and Distributing
Agents) Rules, 1971 hereinafter referred to as the Bihar Public Carrier
Rules.
In these Rules "agent" is defined to mean any person who
H
'
A
B
c
0
E
F
G
H
SUPREME COURT REPORTS
[1976] 2 S.C.R.
engages directly or indirectly in the business of (a) collecting (b) col-
~ecting and forwarding (c) forwarding and distributing and (d) collectmg, forwarding and distributing goods carried by any public carriers. ·
The petitioners rely on the aforesaid definition oJi "agent" and the fol-
. lowill:g Rules in support of the contention that transport companies or
bookmg agencies can be engaged in forwarding and distributing goods
without holding permits in their names and thus become owners in.
charge of the vehicles within the definition of "owners". The petitioners
rely on Rule 8 of the Bihar Public Carrier Rules to show some conditions for licences.
Rule 8 (g) mentions that the licensee shall furnish
the operators with correct figures of the freight receivable by them
from the consignors or the consignees.
Rule 8 (e) states that the
licensee shall maintain a proper record of the vehicles under his control'
and of the collection, despatch and delivery of goods which shall be
open to inspection by the State Transport Authority. Rule 8(i) shows
that the licensee shall ensure that the goods vehicles under his control
have valid permits for routes on which the vehicles have to ply.
The petitioners further contend that in any event no machinery· is.
provided in the Act or in the Rules as to how the petitioners can collect tax from the consignor of the goods or force the consignors to pay
the tax to them before their goods are carried.
The petitioners rely
on the provisions in section 3(3) of the Bihar Act that the person
whose goods are carried shall be liable to pay t'O the owner and every
owner shall recover such tax from such passengers or persons as the·
case may be in support of the contention that the owner is merely a
depositor of the tax if the tax is paid to the owner.
The petitioners;
rely on section lO(l)(a) of the Bihar Act which provides that any person from whom any n1oney is due or may become due to an owner,
who has failed to comply with a notice served upon him under section
9, or any person who holds or may subsequently hold any money for
or on account of such owner, may be directed to pay into the Government Treasury the tax and contend that the petitioners who lend their
trucks to transport agencies are not liable to pay the tax and the transport agencies can be directed to pay the tax.
The Bihar Act and the other Acts in the charging section enact that
there shall be levied and paid to the State Government a tax on all
·passengers and goods carried by public service motor vehicles.
The
charging section further requires every owner to pay the amount of
tax as mentioned in section 9 of the Bihar Act. Section 9 of the Bihar
Act states that the amount of tax or penaltv payable by an owner shall
be paid in the manner provided.
The other provisions in the Bihar
Act are these.
Section 6 states that every owner shall furnish to the
prescribed authority such returns as may be. prescribed.
Section
7
stat~s that the prescribed authority shall assess the amount of tax due
from the owner on the basis of such returns. Section 8 provides that
the prescribed authoritv may permit an owner to pay, in lieu. o~ the
tax payable by him, such amount as may be fixed by the Comm1ss1oner
in the prescribed manner. Section 9 enacts tha.t the amount of t~x ?r
penalty, if any, pavable bv an owner under this Act shall. be patd m
the manner hereinafter provided. Section 10 speaks of. spec~al m~e of
recovery and states that notwithstanding anything contamed m section 9
...
JAGIR SINGH V. BIHAR (Ray, C.J.)
815
or any law, the prescribed authority may at any time by notice in writing direct any person from whom any money is due or may become
due to an owner who has failed to comply with a notice served upon
him under section 9, or any person, who holds or may subsequently
hold any money for or on account of such owner is directed to pay into
the Government Treasury: in the manner specified in a notice so much
of the money as is sufficient to pay the amount due from the owner.
Section 11 mentions that where an owner, liable to pay tax, transfers
his public service motor vehicle to another person, the transferor and
the transferee shall jointly and S<everally be liable to pay the amount
of tax and penalty.
These provisions indicate that the tax is payable
by the owner, returns are to be furnished by the owner, the assessment
isi of the owner, the liability to pay is of the owner and if the owner
fails to pay the money persons who are liable to pay money or owe
mQney to the owner can be directed to pay to the Government.
B
c
The definition of "ow.ner" repels the interpretation submitted by the
petitioners that the definition means not only the owner who is the permit holder but also a booking agency who may be in charge of the
vehicle without being a permit holder. The entire accent in the definition of owner is on the holder of a pern;:iit in respect of the public service motor vehicle. It is the permit which en1itles the holder to ply
D
the vehicle. It is because the vehicle is being plied that the passengers
and C'Onsignors of goods carried by that vehicle become liable to pay
not only fare and freight to the owner but also tax thereon to the owner.
The words "or any person for the time being in charge of such vehicle
or responsible for the management of the place of business of such
owner" indicate that the permit holder will include any person who is
in charge of such vehicle. of the pe1mit holder or any person who
is
E
responsible for the, management of the place of business of such owner.
The owner cannot escape the liability by stating that any person is for
the time being in charge of such vehicles, and, therefore, such person
is the owner and not the permit holder.
The general rule of construction is not only fo look at the word but
to look at tbc context, the collocation and the object of such words relating to such matter and interpret the meaning according to what would
appear to be the meaning intended to be conveyed by the use of the
words under the circumstances.
Sometimes definition clauses create
qualification by expressions like "unless
the context
otherwise requires"; or "unless the contrary inten1ion appears"; or "if not inconsistent with the context or subject rimtter".
"Parliament would legislate to little purpose", said Lord Macnaghten in Netherseal
Co.
v.
Bourne ( 1) "if the objects of its care might sujJp!ement or undo the
work of legislation by making a definition clause of their own. People
cannot escape from the obligation of a statute by putting a private
interpretation on its language".
The courts will always examine the
real .nature of the transaction by which it is sought to evade the tax.
G
The definition of the term "owner" is exhaustive and intended to
H
extend the meaning of the term by including within its sweep bailee of
----·-·------
~
(1) [1889] 14 A.C. 228.
816
SUPREME COURT REPORTS
(1976] 2 S.C.R.
.l\.
a public carrier vehicle or any manager acting ·on behalf of the owner.
The intention of the legislature to extend the meaning of the term by
the definition given by it will be frustrated if what is intended to be
.in.elusive is interpreted to exclude the actual owner.
c
D
E
IF
H
The taxing event is the transporting of goods by public service vehiile. The consignor is to pay the tax. The owner of the vehicle, namely
the permit holder who allows the goods to be transported en his vehicl~
.has a duty eo instanti .he allows the goods to be loaded for transhipJll~nt he. i~. to see that the tax payable in the event of transportation is
paid. Surnlarly, the tax is on passengers carried by public servi~ vehicles and the owner becomes liable to pay tax on the fares payable by
passengers to the owners.
The operational arrangement to which the
petitioners refer that
they have let out the vehicle on hire has no relevance to the liability
to taxation.
The goods are transported by a vehicle. The passengers
are carried by the vehicles. The person who allows his vehicle 1:JQ be
used for the purpose is the permit holder, and, therefore, the liability
to pay tax attaches to the permit holder as the owner of the vehicle.
The plea that no machinery has been provided enabling th~ owner
to collect or recover the tax from the owner of the goods is unacceptable. Once it is found that the legislature levies ·tax on passengers and
googs carried by public service motor vehicle it becomes responsibility
of the owner of the vehicle not to permit the vehicle to be used until
the tax is paid. If the permit holder lets out the vehicle to any person
on hire it is a matter of internal arrangement between the owner who
is the permit holder and the person who is allowed by the permit holder to hire the vehicle to collect tax in order to enable the owner to
discharge the liability. If the ·owner does not make adequate provision
in that behalf the owner cannot escape liability by pleading that the hirer
,of the vehicle is liable to pay tax and the owner is not liable. The intention· of these Acts is made clear if reference is made to other similar
Acts. The Mysore Act speaks of "operator" meaning any·person whose
name is entered in the permit as the holder there•of.
The Mysore Act
speaks of tax being levied and collected on goods carried by stage carriages and further provides that if the operator collects from the passengers fares and freights inclusive of the tax the operator shall pay to
the State Government on account of the tax one eleventh of the totJJ
amount of fares and freights, inclusive of tax coilectcd by him from the
passengers.
The definition of "agent" in Rule 2 of the Bihar Public Carrier
Rules 1971 is not applicable to the Bihar Act under which tax is levied 01; passengers and goods.
The Bihar Public Carrier Rules
~re
framed in exercise of powers conferred by clause (ww) of sub-section
(2) of section 68 of the Motor Vehicles Act, 1939. Section 68 of the
Motor Vehicles Act, 19·39 confers power on the State Government ~o
make Rules inter alia for (ww) licensing of agents engaged in: the business of collecting o~ forwarding and distri~uting of !-'oods ~arried by
public carriers.
These agents under the B1har P~bhc Carner Rules,
1971 are licensed agents to be engaged as forwardmg agents, collecting agents. These agents have no liability to pay tax levied under sec-
..
JAGIR SINGH V. BIHAR (Ray, C.J.)
817
tion 3 of th.: Dihar Act on passengers and goods carried by public serA
vice vehicles. Th-:se agents collect the goods, forward the goods, distribute the goods.
Whatever freight they collect for goods they have
to collect the tax also on such freight. They furnish the operators with
correct figures of the freight receivable by them.
These agents can
charge only such commission as will be prescribed by the State Government under the Rules. These agents are separate from owner of the
vehicle as will appear from Rule 9 of the1 Bihar Public Carrier Rules
B:
which speaks of particulars to be mentioned in contract of agency. One
of the matters mentinoned there is the name of the owner, driver, registration numi.>cr of vehicle and its authorised load and the rate and
amount of the commission. These agents are con.fined to the special
work of collecting, forwarding, distributing of goods carried by public
service vehicles.
·
The Bihar Act prescribes Rules made under the Bihar Act.
The
Bihar Act and Rules thereunder define 'agent' t'O. mean a person authorised in writing by owner to appear on his behalf before a prescribed
authority.
An agent under the Bihar Act is only one authorised by
the owner to appear before a prescribed authority for different purposes mentioned in the Rules. The Bihar Act and the Rules do not
recognise any agency in the matter of tax on fares and freights payable
to the owner of the public service vehicle.
The agents under public
Carrier Rules are licensed to do the special task of collecting, forwarding and distributing goods carried by public carriers. They charge fees
fo1: such service and they have special responsibility and liability under
terms of agency. These agents are not owners of public service vehicles. The fact that these licensed agents have to furnish the operators
with correct figures of freight receivable by them shows not only that
they are accountable to the owners or operators but also that licensed
agents arc not the owners or operators.
The Motor Vehicles Act, 1939 in sections 514, 55 and 56 deal with
applications for public carrier's permit, procedure in considering application for public carriers. permit and grant of public carrier's permit.
Section 59 of the Motor Vehicles Act, 1939 states that save as provided in section 61, a permit shall not be transferable from one person to
another e.xcept with the permission of the trans~ort authority which
granted the permit and shall not without such permission operate to
confur on any person to whom a vehicle
covered by the permit is,
transferred any right to use that vehicle in the manner authorised by
the permit. Section 61 speaks of transfer of permit on the death of the
holder.
Therefore, these provisions in the Motor Vehicles Act 1939
indicate that a permit cannot be transferred.
'
The permit holder is the owner within the definition of the "owner"
in the Bihar Act and other Acts and is also the "operator" within the
meaning of the word "operator" in other Acts to which reference has
been made. The liability to pay tax is of the permit holder in all
cases.
E
FFor these reasons. the contentions of the petitioners fail.
The
Hr
petitions are dismissed: Parties will pay and bear their own costs.
P.B.R.
I
Petitions dfamissed.