B.P.SINGH, J. - (1.) :- In this batch of writ petitions, the legal issues being common, the writ petitions have been heard together and are being disposed of by this common judgement. The writ petitioners have challenged the constitutional validity of the Bihar Motor Vehicles Taxation Act, 1994, particularly Section 6 thereof whereunder a tax at an annual rate has been levied on a manufacturer or a dealer in motor vehicles in respect of the motor vehicles in his possession, in the course of his business as such manufacturer or dealer under the authorisation of trade certificate granted under the Central Motor Vehicles Rules, 1989. The said Act shall be hereinafter referred to as "the impugned Taxation Act." The petitioners have also challenged the demands made under Section 6 of the impugned Taxation Act. The petitioner in CWJC No. 3788 of 1995(R) is M/s. Tata Engineering and Locomotive Company, Ltd. a Company registered under the Indian Companies Act. The aforesaid Company claims to carry on business of manufacturing chassis at its manufacturing Unit situated at Jamshedpur in the State of Bihar.CWJC No. 2708 of 1995(R) has been filed by M/s. Chotanagpur Chamber and Commerce and Industry espousing the cause of its members who have been called upon to pay the tax levied under Section 6 of the impugned Taxation Act. The petitioner in the remaining three writ petitions are dealers who deal in Scooters, Motorcycles and Autorickshaws etc. i.e. in two or three wheeler vehicles. Apart from the challenge to the constitutional validity of the impugned Taxation Act, some of the petitioners have also challenged the action of the taxing authority on other grounds, which shall be dealt with separately, since the facts in each case have to be considered having regard to the provisions of the impugned Taxation Act and the Rules framed thereunder.
(2.) I shall notice the basic facts stated in CWJC No. 3788 of 1995(R) which are relevant for a proper consideration of the challenge to the vires of the impugned Taxation Act.The petitioner carries on business of manufacturing chassis at its manufacturing unit at Jamshedpur. It is averred that the manufacturing unit of the petitioner-Company is fenced with brick built boundary wall throughout. The roads inside and outside the manufacturing unit, and in the TELCO Colony, are private roads maintained by the Company at its own cost. The entry into the factory premises is regulated by issuance of entry pass and such entry is managed and controlled by the Personnel belonging to the security department of the petitioner-Company. Entry to the premises of the petitioner' manufacturing unit may be refused in the absence of proper authority. The maintenance of the roads is also done by the petitioner-Company since the roads within the establishment are not public roads of the State of Bihar. All the machines and the offices of the Company are located within one campus. The manufacture of Chassis is undertaken and completed inside the manufacturing unit/factory premises and after the chassis is fitted with tyres and other accessories, it remains inside the manufacturing unit and is not taken on the public road. After manufacture of chassis, and after the same is fitted with necessary accessories, the chassis is taken to the Company' test yard for testing purposes. The test yard is also located within the premises of the Company and the roads connecting the test yard to the place of manufacture is also within the factory premises maintained by the Company. Even such roads are not public roads.Under Section 39 of the Motor Vehicles Act, 1988 enacted by the Parliament (hereinafter referred to as "the Central Act"), it is necessary to register a vehicle which is to be driven in any public place, but the proviso to Section 39 makes it clear that the said provision does not apply to a motor vehicles in possession of a "dealer", subject to such conditions as may be prescribed by the Central Government. The petitioner-Company being a "dealer" within the meaning of the Central Act obtains trade certificates under Rule 34 of the Central Motor Vehicles Rules 1989 (hereinafter referred to as the Central Rules) which have been framed under the Central Act. Such trade certificates have been granted to it by the competent authority under Rule 35 of the Central Rules. All manufactured chassis are not taken to public road or place on the basis of trade certificates, but only such chassis are covered by the trade certificates which are taken out for testing in public place and for the other purposes enumerated in Rule 41 of the Central Rules. The manufactured chassis are sent to different regional sales offices after obtaining temporary registration. The chassis after manufacture are kept inside the manufacturing unit and are not used on the public road except for the purposes enumerated in Rule 41 of the Central Rules.
(3.) Mr. M. L. Varma, appearing on behalf of the petitioner-Company, has challenged the constitutional validity of the impugned Taxation Act on the ground of legislative competence, but left that point to be developed and argued by Sri Ram Balak Mahto, Senior advocate, appearing on behalf of petitioners in CWJC No. 10453 of 1995 and 2708 of 1995(R). Sri Verma has urged before us the following main contentions.(i) The imposition of tax on "manufacturer" or a "dealer" of motor vehicles under Section 6 of the impugned Taxation Act is beyond the legislative competence of the Bihar Legislature and therefore ultra vires.(ii) The levy is totally arbitrary inasmuch as no procedure has been prescribed for the assessment to be made under the impugned Taxation Act, nor is there any provision for issuance of notices etc., nor is there any procedure under the impugned Taxation Act and the rules framed thereunder for recovery of taxes. The levy of tax is clearly hit by Article 14 of the Constitution of India being arbitrary.(iii) The impugned Taxation Act in its application to a manufacturer is totally unworkable, and there is no mechanism or scheme for its applicability to a manufacturer.(iv) Even if it is assumed that the impugned Taxation Act is not arbitrary and not beyond the legislative competence and the State Legislature, in its application to a manufacturer it must be limited to the levy of tax on vehicles which are possessed by a manufacturer under authority of trade certificates granted under Rule 35 of the Central Rules.(v) The construction put on the impugned Taxation by the State amounts to triple taxation. If it is not confined in its application to vehicles covered under trade certificates, the levy would in effect be a duty on manufacture i.e. an excise duty not referable to entry 57 of List II of the 7th Schedule, but referable only to entry 51 of List II which is limited in its application and does not authorise the State Legislature to levy duty of excise on motor vehicles.(vi) The impugned letter of demand dated 25-11-1995 whereunder the District Transport Officer in purported exercise of authority under Section 6 of the impugned Taxation Act has commanded the petitioner to pay tax in their status as manufacturer of chassis between the period from 26-11-1993 to 31-3-1995, calculating the taxes on the basis of production of 100 chassis per day, and holding out a threat of initiation of certificate proceeding in case of non-payment is also bad for several reasons.;