R.S. Narula, J. - (1.) THE solitary question which calls for decision in this writ petition is whether a corporation is or is not liable to pay tax under Section 3 of the Punjab Passengers and Goods Taxation Act (16 of 1952), as subsequently amended (hereinafter called the Act) in respect of its employees carried by motor vehicles belonging to the corporation from and to their places of residence, where the corporation recovers a nominal amount from the employees on slab basis in proportion to the salary of the respective employee irrespective of the distance to be covered by the motor vehicle concerned.
(2.) MESSRS Hindustan Machine Tools Limited, Pinjore (hereinafter referred to as the Petitioner) is corporation manufacturing machine tools in the public sector at Pinjore within the district of Ambala in the State of Haryana. Out of the 2238 employees of the Petitioner residential accommodation is provided by the corporation at Pinjore to only about 1106. The rest of the employees reside either at Kalka or at Chandigarh or on the outskirts of Pinjore. The Petitioner maintains a fleet of vehicles which carry employees at the time of the shifts in its factory from and to their places of residence, since the inception of the factory of the Petitioner in 1962. Though the Act was in force since 1952, the Petitioner was never required to pay any passenger tax under the Act, till notice, dated March 26, 1968, was received by the Petitioner from Respondent No. 3, who is the Excise and Taxation Officer (Enforcement) -cum -Assessing Authority, Ambala Division - In the said notice (Annexure 'A'), the Petitioner was required to attend before the Assessing Authority on April 18, 1968, and to produce the relevant documents and also to show cause why penalty at the rate of 1 1/2 times be not imposed upon the Petitioner under Section 9(4) of the Act besides the amount of the tax. On the receipt of the notice, the Petitioner submitted a written representation (Annexure 'B') to the Financial Commissioner (Revenue), State of Haryana, wherein it was stated that no hire or reward was being realised from any one of the employees of the company, that the vehicles run by the company were not public service vehicles, and that, therefore, the employees of the Petitioner travelling in its buses were not passengers within the meaning of Section 2(f) of the Act By letter, dated April 16, 1968 (Annexure 'C'), the Haryana Government informed the Petitioner in reply to the latter's representation, dated April 1,1968, that before sending a final reply, it was necessary to ascertain whether the Petitioner was charging any hire or reward in any form from the persons that were allowed to travel by the buses of the Petitioner. Another point on which clarification was sought by the Government was whether the use of the buses of the Petitioner was restricted only to its employees or whether members of the public could also avail of the facility, and if so, whether any fare was collected from them for the same or not -In reply to the Government's letter, the Petitioner sent communication, dated April 29, 1968 (Annexure 'D'), wherein it was stated that the company was not charging any hire or reward from its employees, but was only providing the transport facility to them though certain administrative charges were being realise from the employees, and that the use of the Petitioner's buses was restricted only to the employees of the Petitioner and no member of the public was allowed to avail of the facility. In a further communication, dated May 21, 1968 (Annexure 'E') the Petitioner wrote to the Excise and Taxation Officer, Ambala, that the administrative charges recovered - by the Petitioner were not related to the distance travelled by the employees, and that the charges were the same irrespective of whether an employee travelled from Kalka, Chandimandir, Panchkula, Manimajra or Chandigarh to the Petitioner's factory at Pinjore. It was added in the letter that the administrative charges in respect of the conveyance were charged on the basis of the pay drawn by the employees on the following slab basis to partially meet the maintenance cost of the transport fleet maintained by the company to provide the facility: JUDGEMENT_16_LAWS(P&H)4_1969.html After the exchange of some further correspondence, the Government gave its final decision on the administrative side in its letter, dated August 14/16, 1968 (Annexure 'G') addressed to the General Manager of the Petitioner wherein it was stated "that after due consideration of the matter Government are of the view that passenger tax is leviable" in respect of the buses of the Petitioner which were being utilised for the transportation of its employees between Chandigarh/Kalka and Pinjore. Assessment proceedings were there; after taken in hand, - -vide memorandum, dated October 7, 1968 (Annexure 'H'). Thereupon the Petitioner submitted an application under Section 16 of the Act to the Excise and Taxation Commissioner, State of Haryana (who is Respondent No. 2 in this case) wherein the Petitioner denied its liability to the levy of any passenger tax on the ground that no hire or reward was being realised from any of its employees. The said application of the Petitioner was ultimately dismissed by the order of the Excise and Taxation Commissioner, dated December 13, 1968 (Annexure 'J'). After referring to the definition of "passenger" contained in Section 2(f) of the Act, and to the definition "public service vehicle" contained in Section 2(25) of the Motor Vehicles Act (4 of 1939) (hereinafter referred to as the Motor Vehicles Act) read with Section 2(j) of the Act and after noticing the submission of the learned Counsel for the Petitioner, the Commissioner stated that the decision of the case rested on two considerations, viz: (i) whether the motor vehicles run by the Petitioner were public service vehicles; and (ii) whether the employees travelling in the vehicles of the Petitioner were passengers; and observed that if answer to both the abovesaid considerations was in the affirmative, the company was liable to pay the tax otherwise not. Immediately after framing the two issues referred to above, the Excise and Taxation Commissioner jumped to the following conclusion on the first point: The issue whether the company's vehicles are public service vehicles is clinched by the fact that all these vehicles are registered as public service vehicles under the Motor Vehicles Act; these are not registered as private vehicles. It is, therefore, useless to dilate on this point any further. Regarding the second question about the employees being or not being passengers, Respondent No. 2 took notice of the scale at which the alleged administrative charges are recovered by the Petitioner, and also of the allegation of the Petitioner that by the recovery of the said charges, Petitioner collected during 1967 -68, a sum of Rs. 59,847 only as against the expenditure of Rs. 2,66,708 incurred by the Petitioner on the operational costs of the fleet of vehicles maintained for transporting its employees. He then referred to the provisions of Section 3(2) of the Act and held that so long as tide vehicles owned by the Petitioners are public vehicles, all persons travelling in them are passengers, and though the lump sum paid by the employees may be considered as a reduced charge, the tax under the Act is to be levied on such amount as appears to the Assessing Authority to be fair and equitable having regard to the fares fixed by the competent authority under the Motor Vehicles Act.
(3.) THEREUPON the present writ petition was filed on March 15, 1969 -At the time of the admission of the petition on March 18, 1969, Respondents entered appearance before the Motion Bench and accepted notice of this case, which was thereupon directed to be listed for hearing on April 14, 1969.;