Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 8528 OF 2011

(Arising out of SLP (C) NO. 11653 OF 2010)

The State of West Bengal & Ors. …… Appellants

Versus

Mani Bhushan Kumar …… Respondent

WITH

CIVIL APPEAL No. 8529 OF 2011

(Arising out of SLP (C) NO. 11876 OF 2010)

The State of West Bengal & Ors. …… Appellants

Versus

Vijay Kumar Jha …… Respondent

J U D G M E N T

A. K. PATNAIK, J.

Civil Appeal arising out of SLP (C) NO. 11653 OF 2010:

Leave granted.

2.This is an appeal by special leave against the order

dated 23.03.2010 of the Division Bench of the Calcutta High

Court in A.S.T. No. 83 of 2010 (for short ‘the impugned

order).

3.The facts very briefly are that on 02.09.2009 the State

Transport Authority, Bihar, issued a temporary permit in

favour of the respondent for plying a Stage Carriage Vehicle

for the route Motihari in Bihar to Siliguri in West Bengal, for

a period of four months with effect from 01.09.2009. On

07.09.2009, the respondent submitted an application to the

Secretary, State Transport Authority, West Bengal, for

counter-signature on the temporary permit. On

08.09.2009, the respondent also deposited a sum of Rs.

9,180/- towards tax and additional tax in respect of his

vehicles for plying within the State of West Bengal. On

08.10.2009 vehicle no. BR-31P 5105 of the respondent was

intercepted by the Enforcement Branch of the Motor Vehicle

Department at Siliguri and the driver of the vehicle was

asked to produce the papers including permit and proof of

payment of tax relating to the vehicle. Since the permit

produced by the driver of the vehicle was not counter-signed

by the State Transport Authority, West Bengal, the vehicle

was seized by the officials of the Motor Vehicle Department

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and a notice was issued to the respondent under Section

16(4)(a) & (b) of the West Bengal Motor Vehicles Tax Act,

1970 (for short ‘the Motor Vehicles Tax Act’) to produce the

papers and documents showing payment of tax and

additional tax due for the vehicle and other necessary

documents relating to the vehicle failing which the vehicle

will be sold.

4.Aggrieved, the respondent filed Writ Petition No. 17755

(W) of 2009 before the Calcutta High Court challenging the

seizure of his vehicle and praying for release of the vehicle

alongwith the seized documents. The appellants herein filed

a reply in the said Writ Petition contending inter alia that

the temporary Stage Carriage permit granted by the State

Transport Authority, Bihar, in favour of the respondent for

the route Motihari in Bihar to Siliguri in West Bengal had

not been counter-signed by the State Transport Authority,

West Bengal, as provided in Section 88 of the Motor

Vehicles Act, 1988 (for short ‘the Motor Vehicles Act’) and

hence the vehicle of the respondent was plying without a

valid permit and had to be seized under Section 207 of the

said Act. In the reply, the appellants also contended that in

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the facts of the case the duration of plying has to be

reckoned as 17 weeks retrospective from the date of

interception of the vehicle and the respondent is liable to

pay a tax at the rate applicable for a period of 17 weeks

together with a fine of equal amount and therefore the total

of tax and penalty payable by the respondent works out to

Rs.1,13,460/- as per the assessment memo dated

15.10.2009 of the Taxing Officer, Siliguri.

5.The learned Single Judge, who heard the Writ Petition,

held in his order dated 04.03.2010 that while sub-section

(1) of Section 88 of the Motor Vehicles Act provides that

counter-signature is absolutely necessary for a permanent

permit, it will be clear from sub-section (7) of Section 88 of

the Motor Vehicles Act that for a temporary permit no such

counter-signature is necessary. The learned Single Judge

also held that the entire tax had been paid by the

respondent relying on a notification dated 13.04.2007 of the

State Government. Accordingly, the learned Single Judge

allowed the Writ Petition and directed the appellants to

forthwith release the vehicle of the respondent and awarded

a cost of Rs.10,000/- in favour of the respondent against

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the appellants. Aggrieved by the order of the learned Single

Judge, the appellants filed an appeal before the Division

Bench of the Calcutta High Court and by the impugned

order, the Division Bench of the High Court sustained the

findings of the learned Single Judge that a temporary permit

issued under Section 87 of the Motor Vehicle Act to be valid

in the State of West Bengal need not be counter-signed and

that the respondent has paid the tax and additional tax to

the State Transport Authorities in respect of the vehicle.

The Division Bench, however, reduced the cost awarded by

the learned Single Judge from Rs.10,000/- to Rs.5,000/-

provided the vehicle of the respondent is released by

26.09.2010. On 26.04.2010, this Court directed that

pending consideration of the Special Leave Petitions, the

vehicle shall be released subject to the respondent

furnishing a Bank Guarantee for Rs.1,00,000/- for the

vehicle.

6.Mr. Altaf Ahmed, Learned Senior Counsel appearing

for the appellants, submitted that in the Reciprocal

Agreement entered into by and between the State of West

Bengal and State of Bihar, there was no provision for grant

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of temporary permit in respect of a Stage Carriage Vehicle,

except for the interregnum between the draft and final

publication of the Reciprocal Agreement. He submitted that

in the absence of any such Reciprocal Agreement for grant

of temporary permit in respect of a Stage Carriage Vehicle,

no temporary permit could be granted from Motihari in

Bihar to Siliguri in West Bengal. In support of this

submission, he cited the decisions in Ashwani Kumar and

Another v. Regional Transport Authority, Bikaner and

Another [(1999) 8 SCC 364] and A. Venkatkrishnan v. State

Transport Authority, Kerala [(2004) 11 SCC 207] in which

this Court has held that in the absence of reciprocal

agreement between two States, grant of permit for an inter-

state route is illegal and beyond the jurisdiction of the State

Transport Authority. He submitted that sub-section (1) of

Section 88 clearly states that a permit granted in any one

State shall not be valid in any other State unless counter-

signed by the State Transport Authority of that other State

or by the Regional Transport Authority concerned. He

vehemently argued that in the absence of any counter-

signature by the State Transport Authority of West Bengal,

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the permit issued in favour of the respondent was not a

valid permit in the State of West Bengal. He submitted that

since the vehicle was plying without a valid permit, the

authorities of the Motor Vehicle Department had detained

and seized the vehicle in accordance with the provisions of

Section 207 of the Motor Vehicles Act. Regarding the tax,

he relied on the provisions of sub-sections (3) and (4) of

Section 16 of the Motor Vehicles Tax Act and submitted that

the tax and penalty amounting to Rs.1,13,460/- as

assessment in the assessment memo dated 15.10.2009 of

the Taxing Officer, Siliguri had not been paid by the

respondent.

7.Mr. Nagendra Rai, Learned Senior Counsel for the

respondent, on the other hand, submitted that admittedly

the respondent had filed an application for counter-

signature on the permit before the Secretary, State

Transport Authority, West Bengal, but the counter-

signature was not put on the permit by the State Transport

Authority and as a result the vehicle of the appellant was

seized and detained. He cited the decision of this Court in

Kusheshwar Prasad Singh v. State of Bihar and Others

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[(2007) 11 SCC 447] for the proposition that a wrong-doer

ought not to be permitted to make a profit out of his own

wrong. He argued that since the State Transport Authority,

West Bengal has not counter-signed the permit of the

appellants, the appellants cannot take advantage of this

wrong-doing and recover exorbitant amount of tax and

penalty from the respondent.

8.Sub-section (1) & (7) of Section 88 of the Motor

Vehicles Act are quoted hereinbelow:

“88. Validation of permits for use outside

region in which granted. -(1) Except as may be

otherwise prescribed, a permit granted by the

Regional Transport Authority of any one region

shall not be valid in any other region, unless the

permit has been countersigned by the Regional

Transport Authority of that other region, and a

permit granted in any one State shall not be

valid in any other State unless countersigned by

the State Transport Authority of that other State

or by the Regional Transport Authority

concerned:

Provided that a goods carriage permit, granted

by the Regional Transport Authority of any one

region, for any area in any other region or

regions within the same State, shall be valid in

that area without the countersignature of the

Regional Transport Authority of the other region

or of each of the other regions concerned:

Provided further that where both the starting

point and the terminal point of a route are

situate within the same State, but part of such

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route lies in any other State and the length of

such part does not exceed sixteen kilometres,

the permit shall be valid in the other State in

respect of that part of the route which is in that

other State notwithstanding that such permit

has not been countersigned by the State

Transport Authority or the Regional Transport

Authority of that other State:

Provided also that –

(a) where a motor vehicle covered by a permit

granted in one State is to be used for the

purposes of defence in any other State, such

vehicle shall display a certificate, in such form,

and issued by such Authority, as the Central

Government may, by notification in the Official

Gazette, specify, to the effect that the vehicle

shall be used for the period specified therein

exclusively for the purposes of defence; and

(b) any such permit shall be valid in that other

State notwithstanding that such permit has not

been countersigned by the State Transport

Authority or the Regional Transport Authority of

that other State.

(7) Notwithstanding anything contained in sub-

section (1), a Regional Transport Authority of

one region may issue a temporary permit under

section 87 to be valid in another region or State

with the concurrence, given generally or for the

particular occasion, of the Regional Transport

Authority of that other region or of the State

Transport Authority of that other State, as the

case may be.”

(emphasis supplied)

9.The last limb of sub-section (1) of Section 88 of the

Motor Vehicles Act states that a permit granted in any one

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State shall not be valid in any other State unless counter-

signed by the State Transport Authority of that other State

or by the Regional Transport Authority concerned. Sub-

section (7) of Section 88 of the Motor Vehicles Act, however,

states that notwithstanding anything contained in sub-

section (1), a Regional Transport Authority of one region

may issue a temporary permit under section 87 to be valid

in another region or State with the concurrence, given

generally or for the particular occasion, of the Regional

Transport Authority of that other region or of the State

Transport Authority of that other State, as the case may be.

Hence, unless there is concurrence, given generally or for

the particular occasion, of the Regional Transport Authority

of the other region or of the State Transport Authority of the

other State no valid temporary permit can be issued for the

other region or the other State.

10.In the facts of this case, we find that although the State

of West Bengal and the State of Bihar had entered into a

reciprocal agreement in 1988 for issue of a certain number

of permits, the State Transport Authority, Bihar exceeded

the quota of permits for the inter-state route and there was

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no concurrence in general or for a particular occasion for

issue of the temporary permit in favour of the respondent

for the route from Motihari in Bihar to Siliguri in West

Bengal. Hence, the High Court is not right in relying on the

provisions of sub-section (7) of Section 88 of the Motor

Vehicles Act in coming to the conclusion that no counter

signature of the State Transport Authority, West Bengal,

was necessary for the temporary permit of the respondent

for plying his vehicle in the State of West Bengal.

11.As admittedly, there was no counter-signature of the

State Transport Authority, West Bengal, on the temporary

permit issued by the State Transport Authority (Bihar), the

respondent did not have a valid permit for the part of the

route inside the State of West Bengal. The plying of the

vehicle of the respondent in the Siliguri region within the

State of West Bengal was thus in contravention of Section

66(1) of the Motor Vehicles Act which provides that no

owner of a vehicle shall use or permit use of the vehicle as a

transport vehicle save in accordance with the conditions of a

permit granted or counter-signed by the Regional or State

Transport Authority. The appellants, therefore, were well

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within their powers to detain and seize the vehicle of the

respondent under Section 207 of the Motor Vehicles Act for

contravention of Section 66 of the said Act.

12.Regarding the tax payable by the respondent for the

vehicle plying within the State of West Bengal, it appears

that on 08.10.2009 the appellants had seized and detained

the vehicle of the respondent under sub-section (3) of

Section 16 of the Motor Vehicles Tax Act and issued a notice

under sub-section (4) of Section 16 of the Motor Vehicles

Tax Act and it is at this stage that the petitioner filed the

writ petition before the Calcutta High Court for release of

the seized vehicle and the High Court has held that

respondent has paid all the taxes in respect of the vehicle.

13.Sub-sections (3) and (4) of Section 16 of the Motor

Vehicles Tax Act are extracted hereinbelow:

“(3) Notwithstanding anything contained

elsewhere in this Act, any officer referred to in

sub-section (1) [may seize and detain] any motor

vehicle in respect of which tax is due until the

person liable to pay the tax,—

(a) has satisfied the Taxing Officer having

jurisdiction within thirty days of the detention

that the tax has actually been paid,

(b) has within thirty days of such detention paid

to the Taxing Officer having jurisdiction the tax

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due together with the penalty to be paid for non-

payment of tax within the prescribed time.

(4) (a) On the expiry of the period of thirty days

the vehicle seized and detained may, subject to

the provisions of this Act, be sold in auction

unless the person liable to pay tax has, within a

further period of fifteen days, paid to the Taxing

Officer having jurisdiction double the amount of

the total tax due, including the penalty under

section 11, in respect of such vehicle (hereinafter

referred to as the aggregate amount).]

Provided that the terms and conditions in respect

of auction of a motor vehicle under this sub-

section shall be specified by order, made in this

behalf, by the State Government.

(b) The sale of the vehicle seized and detained

[may be effected by the Taxing Officer] within

whose jurisdiction the vehicle has been seized

and detained under this section, and the

proceeds of sale shall be disposed of in the same

manner as an arrear of land revenue.”

It will be clear from the provisions of sub-sections (3) and (4)

of Section 16 of the Motor Vehicles Tax Act that power is

vested in the Taxing Officer to decide whether tax in respect

of the vehicle has been paid and if the same has not been

paid, to recover the same from sale of the vehicle, if

necessary. Thus, the High Court should not have straight

away come to the conclusion in the writ petition that the tax

in respect of the vehicle has been paid.

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14.We, therefore, set aside the impugned order of the

Division Bench of the Calcutta High Court as well as the

order of the learned Single Judge and direct that the

appellants will continue with the proceedings against the

respondent in accordance with Section 16 and other

provisions of the Motor Vehicles Tax Act for determining and

recovering the tax amount after giving all due opportunity to

the respondent. We direct that the Bank Guarantee for

Rs.1,00,000/- furnished by the respondent shall remain in

force for six months and in case the concerned authority

holds that the respondent is liable for any amount of tax,

the appellant would be entitled to encash the Bank

Guarantee for Rs.1,00,000/- furnished by the respondent

and recover the tax amount within a period of six months

from today. We, however, direct that in the facts of the case

no penalty will be recovered from the respondent because

the State Transport Authority, Bihar had granted the

temporary permit for the route upto Siliguri in West Bengal,

in excess of the quota fixed between the two States and the

respondent had in fact applied to the State Transport

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Authority, West Bengal for counter-signature on the

temporary permit.

15.The appeal is allowed to the extent indicated above.

There shall be no order as to costs.

Civil Appeal arising out of SLP (C) NO. 11876 OF 2010:

Leave granted.

2.This is an appeal by special leave against the order

dated 23.03.2010 of the Division Bench of the Calcutta High

Court in A.S.T. No. 84 of 2010 and this appeal was heard

alongwith Civil Appeal arising out of SLP (C) NO. 11653 OF

2010.

3.We have delivered a judgment today setting aside the

impugned order of the Division Bench of the Calcutta High

Court as well as the order of the learned Single Judge

against which the appeal has been filed before the Division

Bench of the High Court and directed that the Bank

Guarantee for Rs.1,00,000/- furnished by the respondent

shall remain in force for a period of six months from today,

during which the appellants will complete the proceeding for

determination of tax in accordance with Section 16 of the

Motor Vehicles Tax Act after giving all due opportunity to

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the respondent and recover the tax amount from the Bank

Guarantee within six months, but will not recover any

penalty from the respondent. This appeal is also disposed

of in terms of the said order passed in Civil Appeal arising

out of SLP (C) NO. 11653 OF 2010.

.……………………….J.

(R. V. Raveendran)

………………………..J.

(A. K. Patnaik)

New Delhi,

October 11, 2011.

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