Case Law Details
Ms. Tata Motors Limited Vs State of Jharkhand And Others (Supreme Court)
Conclusion: Liability of tax was on the manufacturer for the chasis of the motor vehicles manufactured by them during the period these chasis were in their “possession”, i.e., before they were delivered to the dealers and/or the purchasers of the said vehicles as per section 6 of Bihar Motor Vehicles Taxation Act, 1994.
Held: In the present case, Bihar Government, under section 6 of the Bihar Motor Vehicles Taxation Act, 1994 imposed penalty on assessee-manufacturer on the chassis of the motor vehicles manufactured by them during the period this chassis were in their “possession”, i.e., before they were delivered to the dealers and/or the purchasers of the said vehicles. It was pointed out that after the manufacture of the vehicle when it remained with the manufacturer (or when it remained with the dealer after delivery thereof to the dealer by the manufacturer) and before it was sold to the ultimate consumer, the vehicle was brought on the road and was driven. It might be for the purpose of testing the technical suitability of such a vehicle or when it went for delivery from the manufacturer’s factory to the dealer’s showroom. Likewise, the dealer might also drive this vehicle for the limited purpose, say it wa driven by the customer etc. Thus, liability to pay tax under section 6 was linked with the incidence of manufacturer or the dealer possessing the vehicle which was suitable for use on road during the course of his business. Thus, the manufacturer or a dealer of a motor vehicle, in respect of the motor vehicle in his possession in the course of business as such a manufacturer or dealer should pay tax, was within the legislative competence of Entry 57.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
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.
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