Case Law Details
Facts of the case-This batch of Writ Petitions has been filed by various Associations namely Chennai City Auto Ootunargal Sangam, Tamilnadu Driving Schools Owners Federation, Madras Metro Auto Drivers Association, Vada Chennai Maavatta Auto Ottunargal Padugappu Nalasangam and Tamilnadu Lorry Owners Federation, challenging notification issued in G.S.R.1183(E) dated 29.12.2016 amending Rule 32 and Rule 81 of the Central Motor Vehicle Rules 1989 (Rules’) fixing a new fee structure under the Motor vehicles Act 1988 (Act’) and levying additional fees for certain category of services rendered by the authorities under the Act. Though the prayer addresses the notification in entirety, challenging the same on the ground of unconstitutionality and invalidity, the petitioners, have, in the course of the hearing restricted the prayer to the levy of additional fees alone.
The main contention of the petitioners is as follows:
The Petitioner Associations represent owners and drivers of Autos and Lorries as well as driving schools covered under the provisions of the Motor Vehicles Act 1988. The Act stipulates various conditions that are to be complied with by the members of the Associations such as the holding of valid licenses for plying of the vehicle, affixation of valid registration mark on the vehicle, norms to be followed in the conduct of driving classes etc. Section 110 of the Act authorizes the Central Government to make Rules in regard to the construction, equipment and maintenance of motor vehicles and trailors as well as various matters connected therewith.
The main contention of the petitioners is to the effect that the power under section 211 of the Act is restricted to the levy of a fee alone and does not extend to the levy of additional fee as proposed in the impugned notification. The instances where additional fee is proposed to be levied are as follows (emphasized in italicized bold);
’32. Fees. — The fees which shall be charges under the provisions of this Chapter shall be as specified in the Table below:
Provided that the States may levy additional amounts to cover the cost of automation and technology utilized for conducting the testing or providing value added services
TABLE
81. Fees. The fees which shall be charged under the provisions of this Chapter shall be as specified in the Table below:
Provided that the States may levy additional amounts to cover the cost of automation and technology utilized for conducting the testing or providing value added services.
| Sl. No. | Purpose | Amount |
| 4 |
Issue or renewal of certificate or Registration and assignment of new registration mark:……….. |
…………….. |
| (j) Any other vehicle not mentioned above | Three thousand rupees | |
| Note 1: Additional fee of two hundred rupees shall be levied if the certificate of registration is a smart card type issued or renewed in Form 23A. Note 2: In case of delay in applying for renewal of certificate of registration, an additional fee of three hundred rupees for delay of every month or part thereof in respect of motor cycles and five hundred rupees for delay of every month or part thereof in respect of other classes of non transport vehicles shall be levied. |
||
| 6 | Transfer of ownership | Half of the fee mentioned against Serial No.4
Note: In case of delay in submission of “No Objection Certificate”, an additional fee of rupees three hundred for delay of each month or part thereof in case of motor cycles and five hundred rupees for each month of delay or part thereof for other vehicles shall be levied. |
| 7. | Change of residence | Half of the mentioned Serial No.4
Note: In Case delay in submission of “No Objection Certificate” for change of residence, an additional fee of rupees three hundred for delay of each month or part thereof in case of motor cycles and five hundred rupees for each month of delay or part thereof for other vehicles shall be levied. |
| 11 | Grant of renewal of certificate of fitness for motor vehicle | Two hundred rupees
Note: Additional fee of fifty rupees for each of delay after expiry of certificate of fitness shall be levied |
The petitioners would contend that the levy of additional fee was in the nature of a fine or penalty over and above the prescribed fee and that the provisions of the Act and the Rules do not authorize such punitive levy.
A perusal of the provisions of section 22 would indicate clearly that the Act contemplates only the levy of a fee in return for services rendered by the authorities. Nowhere is there sanction for any levy over and above the fee. The settled proposition that emerges from the judgments relied upon by the Petitioners is that there can be no substantive levy without the backing of a charging provision in this regard. Though the judgments have been rendered in the context of various revenue enactments, the principle is equally applicable to the present case.
With respect to the case-law cited by the respondents, the challenge in that matter was to the constitutionality of section 234E of the Income Tax Act 1961 enacted for the levy of a fee for delay in filing a return of tax deduction, that stood repelled. That was not a case where a fee was sought to be levied in the absence of a charging provision. We are thus of the view that the cited case is of no assistance to the respondent.
Prior to the proposed levy, a Committee was constituted to consider the revision of fees prescribed under the Rules. A copy of the report dated September 2014 has been made available. The Committee notes that the fees prescribed for various purposes were last revised vide amendment notification No.GSR 221(E) dt.28.3.2001 effective from the same date and that there has been no revision since. On account of the significant increase in cost of infrastructure, the committee suggests increasing the fee. With respect to the levy of additional fees or a fine, the committee makes the following observations and recommendations:
‘A. At present, there is no fine prescribed for non‑ renewal of registration in respect of non-transport vehicles. This results in there being a large number of them plying without renewal of their certificates of registration.
The Committee therefore recommends to prescribe a fine of Rs.300/- per month or part thereof for motor cycles and Rs.500/- per month or part thereof for other vehicles for late renewal of registration (i.e. after 15 years) of non-transport vehicles.
B. At present, there is no fine prescribed for delayed submission of NOC for change of address and transfer of ownership. This result in very late submission of NOC’s in these cases, going even upto 2 to 3 years This creates a peculiar situation as previous office has issued NOC land new office has not received the same, thereby keeping record in both offices blank and incomplete.
The Committee therefore recommends to prescribe a fine of Rs.300/- per month for motor cycles and Rs.500/- per month or part thereof for other vehicles for delay in submitting NOC for change of address and transfer of ownership.
C. At present, there is no fine prescribed for non-renewal of fitness certificate before its expiry. Due to this, there is likelihood of such vehicles plying on expired certificates of fitness. To curb this tendency, it is necessary to levy a fine for non renewal of fitness certificate in time.”
The Committee therefore recommends to prescribe a fine of Rs.50/- per day for non renewal of fitness certificate in time.
The present provisions of the Motor Vehicles Act do not provide for levy of fines in the above circumstances. The MoRTH may consider and make necessary amendments in the Motor Vehicles Act accordingly.’
Thus the suggestion of the committee for the levy of a fine is itself, and rightly, subject to the amendment of the Act to provide for such levy. The purpose behind the suggestion is on the ground that it would deter the plying of vehicles without required documentation and compliances. Such purpose would however, have to be achieved taking recourse to the available methods. The present proposal for the levy of a fine is clearly without the requisite authority. Indeed the observation of the committee extracted above with the specific suggestion for amendment makes this position clear and unambiguous.
The Motor Vehicles Act has been enacted to take into account and provide for road transport technology, pattern of passenger and freight movements, development of road net work in the country and improved techniques in motor vehicle management. The power extended to Government in terms of sec.211 of the Act is for the levy of a fee as a quid pro quo for services offered by officers or authorities under the Act. The fee prescribed is thus designed to be commensurate to the service rendered by the authority. We fail to see any justification for the levy of an additional fee in the nature of the penalty when there is no change in the nature of service rendered by the authority under the Act particularly in the absence of any statutory backing for the same. The purpose, as is apparent from the recommendation of the committee is the fond hope that such levy would act as a deterrent for non-compliance of various provisions. Such noncompliance is however, a matter to be addressed using such powers as have been extended to the authorities. The Motor Vehicles Act and the Central Motor Vehicles Rules at present, only contain a provision authorizing the levy of a fee and nothing more. In this connection, we may refer to the judgement of the Supreme Court in re. State of U.P. and others Vs. Vam Organic Chemicals Ltd and others (AIR 2003 Supreme Court 4650) wherein there was a challenge to the levy of a fee on denaturalisation of alcohol. The Bench, quashing the levy, states as follows:
“44. The question is (to borrow the language in Synthetics) whether in the garb of regulations a legislation, which is in pith and substance, as we look upon the instant legislation, a fee or levy which has no connection with the cost or expenses administering the regulation, can be imposed purely as a regulatory measure, Judged by the pith and substance of the impugned legislation, we are definitely of the opinion that these levies cannot be treated as part of regulatory measures.”
Reference is also been made by the writ petitioners to a draft notification proposed to be issued by State Government to the effect that the fee structure set out in the impugned notification is intended to be reduced shortly. This is only a draft and we see no reason to comment thereupon.
In view of the foregoing discussion, we find that the levy of additional fee under various heads as per the impugned notification is without authority and such levy of additional fee is,therefore, liable to be struck down.
Government of Bihar, Department of Transport is enforcing additional enhanced fine amount as per India Gazette Notification G.S.R. 1183(E) Dated 29/12/2016, even though it has been declared void by the Division Bench of Hon’ble Madras High Court & no contrary Decision has been passed by any other High Court or any stay granted by the Apex Court of India. I feel Taxguru should take up this issue at the appropriate level and expose the illegal act of Department of Transport, Government of Bihar.