A. K. Sikri, J. - (1.) A common question of law which arises in all these appeals pertains to levy of tax by the respondent No.1 State under Section 6 of the Bihar Motor Vehicles Taxation Act, 1994 (hereinafter referred to as the 'Bihar Act') on the chasis of the motor vehicles manufactured by the appellants during the period these chasis are in their "possession", i.e., before they are delivered to the dealers and/or the purchasers of the said vehicles.
(2.) The Bihar Act envisages three kinds of taxes, namely: (a) on registered vehicles under Section 5 of the Act; (b) on vehicles held under trade certificates as per Section 6 of the Act; and (c) in respect of vehicles registered, where the registration is temporary, a marginal tax under Section 7(4) of the Act.
(3.) As would be noticed, tax under Section 5 of the Bihar Act is paid by the ultimate buyers who, on purchase of vehicles and becoming owners thereof, get these vehicles registered in their names. After the manufacture of the vehicle and before it is sold to the ultimate buyer to use the said vehicle, a temporary registration is required by the manufacturer under Section 7 of the Bihar Act. Since this registration is temporary for a limited duration, a fractional tax is paid by the manufacturer or dealer under Section 7(4) of the Bihar Act. Section 6, on which the fulcrum of dispute revolves, deals with those vehicles which are in possession of a manufacturer or dealer in the course of his business and are held under trade certificates. Sections 5, 6 and 7 are reproduced below in order to have an idea of the payment of these three motor vehicle taxes: "5. Levy of tax - (1) Subject to other provisions of this Act, on and from the date of commencement of this Act, every owner of a registered motor vehicle shall pay tax on such vehicle at the rate specified in Schedule I. (2) Subject to other provisions of this Act, on and from the date of commencement of this Act, every owner of a registered motor vehicle shall pay Additional Motor Vehicles Tax on such vehicle at the rate specified in Schedule II. (3) The State Government may, by notification from time to time, increase the rate of tax specified in the Schedules: Provided that no such increase shall, during any year, exceed fifty percent of the rate of taxes prescribed in the Schedules. 6. Tax payable by a manufacturer or a dealer - A tax at the annual rate specified in Schedule III in lieu of the rates specified in Schedule I shall be paid by 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. 7. Payment of tax - xx xx xx (4) In the case of motor vehicles temporarily registered under Section 43 of the Motor Vehicles Act, 1988, the tax for vehicles other than personalised vehicles shall be levied at the rate of 1/12th of the tax payable for the year for such vehicles. In case of extension of the period of temporary registration under the proviso to sub-section (2) of Section 43 tax at the rate of 1/12th payable for the year shall be payable on every extension of temporary registration for period of 30 days or part thereof; Provided that for temporary registration of personalised vehicles the rates of tax will be Rs.50/- for a motor cycle (including moped, scooter and cycle with attachment for propelling the same by mechanical power) and Rs.100/- for a motor car.";