# M.P., GWALIOR v. ANAND TRANSPORT CO. (P) LTD. ETC

- **Citation:** [1971] Supp. 1 S.C.R. 984
- **Court:** Supreme Court of India
- **Decided:** 1971-07-29
- **Case number:** Civil Appeals Nos. 1449 IB 1454 of 1967
- **Bench:** K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-p-gwalior-v-anand-transport-co-p-ltd-etc-5314
- **Pages:** 4

## Headnote

Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act, 1959Section 1-Return filed accepted as correct-No order quantifying a1no1uit
of lax necessary before issuing demand notice.
Under the Madhya Prade•h Motor Vehicles (Taxation of Passengers)
Act, 1939, where returns have been accepted as correct nothing more need
be done except to recover the tax due which has not been paid and no
assessment order need be passed in view of the express language of s. 7.
It ii only when the returns have not been submitted or when returns sutJ..
mitted are found to be incorrect and incomplete that the tax officer ha.."
to make an enquiry and determine the sum payable by the operator by
way of tu. Similarly if there bas been escapement of tax, proceedinp
have to be taken under s. 8 and an order has to be made after an enquiry.
The position would be the same if penalty is soueht to be levied under
s. 9.
[986F-H; 987 A]

## Text

984
A
SHRI M. P. SINGH, DY. TRANSPORT COMMISSIONER,
B
c
D
,
G
H
M.P., GWALIOR
v.
ANAND TRANSPORT CO. (P) LTD. ETC.
July 29, 1971
(K. S. HEGDE AND A. N. GROVER, JJ.]
Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act, 1959Section 1-Return filed accepted as correct-No order quantifying a1no1uit
of lax necessary before issuing demand notice.
Under the Madhya Prade•h Motor Vehicles (Taxation of Passengers)
Act, 1939, where returns have been accepted as correct nothing more need
be done except to recover the tax due which has not been paid and no
assessment order need be passed in view of the express language of s. 7.
It ii only when the returns have not been submitted or when returns sutJ..
mitted are found to be incorrect and incomplete that the tax officer ha.."
to make an enquiry and determine the sum payable by the operator by
way of tu. Similarly if there bas been escapement of tax, proceedinp
have to be taken under s. 8 and an order has to be made after an enquiry.
The position would be the same if penalty is soueht to be levied under
s. 9.
[986F-H; 987 A]
CivIL APPELLATE JURISDICTION: Civil Appeals Nos. 1449 IB
1454 of 1967.
Appeals by special leave from the judgments and
orders
dated December 15, 1966 of the Madhya Pradesh High Court ill
Misc. Petitions Nos. 303 of 1966 etc.
I. N. Shroff, for the appellants (in all the appeals).
M. N. Phadke, K. L. Hathi and P. C. Kapur, for the respoodents (in C.As. Nos. 1449, 1450 and 1452 of 1967).
V. S. Desai, K. L. Hathi and P. C. Kapur, for the respondents
(in C.As. Nos. 1453 and 1454 of 1967).
The Judgment of the Court was delivered by
Grover, J.-All these appea.ls arise out of writ petitions that
were filed in the High Court of Madhya Pradesh challenging the
notices of demand issued by the Deputy Transport Commissioner
for payment of the amount of passenger tax said to be due under
the Madhya Pradesh Motor Vehicles (Taxation of Passengers)
Act, 1959, hereina.fter referred to as the 'Act'. By a common
judgment dated November 8, 1966 the High Court allowed the
petitions and quashed the demand notices.
The appeals may
be divided into two categories. In C. As. 1449 and 1453 of 1967
returns had been duly filed as contemplated by s. 5 of the Act
but no tax had been deposited as required by s. 6.
Demand
M. P. SINGH'· ANAND TRANSPORT (Grol'er, J.)
985
notices were issued in respect of the tax payable pursuant to the
A
returns some years later.
Proceedings were also taken as no
payment was made for recovery of the tax as arrears of land
revenue. In the other four appeals the returns were never filed
but it appears the authorities did take certain proceedings under
s. 7 of the Act and in some cases accounts of the respondents
were checked and their liability detennined.
When demand
B
notices were sent and recoveries sought to be made the writ petitions were filed. The High Court did not go in these matters fully
and treated all the petitions as if the facts werl! similar.
Section 3 of the Act which is the charging section provides
that there shall be levied and paid to the State Government a tax
on all passengers carried &y stage carriages at a rate equivalent
to I 5 % of the fare inclusive of the tax payable to the operator
of a stage carriage. The tax has to be collected by the operator
of a stage carriage and paid to the Sta.le Government in accordance with the provisions of the Act. Under s. 5 the operator
must deliver to the tax officer or to such prescribed officer as may
be specified a return in the prescribed fonn and manner either
daily or at such intervals as ma.y be prescribed. Section 6 Jays
down that the tax payable during any month in accordance with
the return submitted under s. 5 shall be paid into a Governmen<
treasury by the operator and the receipt evidencing such payment
ha.s to be forwarded to the Tax Officer. Sections 8, 9 and 10 arc
in the following terms :-
"(8) Fares escaping assessment.-lf, for any reason,
the whole or any portion of the tax Jeviable under thil
Act, for any month has escaped assessment, the Tax
Officer may, at any time within, but not beyond, one
year from the expiry of that month, a.ssess the tax which
has escaped assessment, after issuing a notice to the
operator and making such inquiry as the officer may
consider necessary.
(9) Penalty for non-paymefll
01 tax.-Wherc the
whole or any portion of the tax pa.yable to the State
Government in respect of any stage carriage for any
month or portion thereof in pursuance of ss. 6, 7 and
8 has not been paid to it in time the Tax Officer may,
in his discretion, levy in addition to the tax so payable,
a penaHy not exceeding 25 per cent of the maximum tax
which would have been payable to the State Government
if the stage carriage had carried its full complement of
passengers during such month or portion thereof.
(10) Recovery of tax, etc.-(!) In the cases referred·
to in sections 7, 8 and 9 the Tax Officer shall serve on
lhe operator a notice of demand for the sums payable
c
D
Ill
,
G
ll
t86
A
B
c
D
E
F
G
II
SUPREME COURT REPORTS
(1971] SUPP. s.c.R.
to the State Government and the sums specified in >uch
notice may be recovered from the operator as arrears of
land revenue.
(2) The tax shall be a first charge on the stage carriage in respect of which it is due as a0lso on its accessories and such stage and the accessories thereof may be
attached and sold for the recovery of the tax under the
appropriate law relating to the recovery of arrears of
land revenue."
Section 12 provides for a.n appeal against a notice of demand
served under s. 10.
The scheme of the above provisions apparently is that the
operator of a stage carriage has to submit a return in accordance
with s. 5 and pay tax into the Government treasury every month
as provided by s. 6. No question can arise of any assessment order
being made under s. 7 by the Tax Officer where the returns are
found to be correct and complete. It is only where either no
returns have been submitted or where the return submitted
appear to the Tax Officer to be incorrect or incomplete that the
Tax Officer has to follow the procedure laid down in s. 7 and
determine the tax payable by
the operator.
The High Court
wa<S of the view that even where returns had been filed and accep·
ted as correct the Tax Officer has to pass a proper assessment
order holding the operator liable for payment of tax in accordance
with the return submitted by him. In other words no notice of
demand can be ·issued until the Tax Officer makes such an order
quantifying the a.mount of tax.
We are unable to accede to the contention which prevailed
with the High Court that even where returns had been submitted but the tax has not been paid the Tax Officer is bound to
make an order before serving a notice of demand even though
the dema.nd is strictly in accordance with the returns which have
been submitted. Section 7 rules out any such course to be followed by the Tax Officer. It is only when the returns have not
been submitted or when return submitted are found to be incorrect and incomplete that the Tax Officer has to make an inquiry
and determine the sum payable by the operator by way of tax.
Similarly if there has been escapement of tax proceedings have
to be taken under s. 8 and an order has to be made after an enquiry.
The position would be same if penalty is sought to be levied
under s. 9.
But where returns have been accepted as correct
nothing more need be done except to recover the tax due which
has not been paid and no a.ssessment order need be passed in
view of the express language of s. 7.
M. P. SINOH v. ANAND TRANSPORT (Grover, J.)
9&7
We are satisfied that in the two appeals, i.e., C. As. 1449
A
and 1453 / 67 in which returns had been filed the Tax Officer was
not bound to make any order quantifying the amount of tax before
issuing the notice of demand. The amount sought to be realii:ed
was quantified in the returns themselves vide Form IV read with
Rule 4(2)(c) of the M. P. Motor Vehicles (Taxation of Passengers)
Rules. It ·!las not been shown that any penalty was sought to be
B
imposed in those two cases. The order of the High Court, therefore, in these appeals cannot be sustained and is hereby set a~ide
and the writ petitions are ordered to be dismissed.
As regards c: As. Nos. 1450, 1451, 1452 and 1454/67, it
arpears, as has been stated earlier, that some proceedings were
held of the nature contemplated by s. 7 a.nd the notices of demand
C'
were issued after orders had been duly made by the Tax Officer.
But this is a matter which was not examined in each case by the
High Court and we would like to express no opinion with regard
to it. These appeals are also allowed and the orders of the High
Court are set aside. The High Court will rehear and redecide
the same in accordance with law. There will be no order as to
D
costs in all the. appe:ils.
K. B. N.
Appeals allowed.