ORDER
Goda Raghuram, J.
1. All these writ petitions involve common questions and seek substantially similar reliefs and as such are heard and disposed of by this common judgment.
2. All the petitioners are owners of vehicles which have a registered seating capacity in excess of six. Some of these vehicles have a registered seating capacity of 16. All the petitioners have approached the competent transport authorities seeking permission to alter the seating capacity of the vehicles to seven in all or thirteen in all, as the case may be, with a view to obtaining permits to ply their vehicles as motor cabs or maxi cabs, respectively. On the competent authority declining the petitioners’ applications, they have approached this Court seeking a declaration that the action of the competent authorities in not permitting the alteration constitutes arbitrary action and for a consequential direction to the authority to alter the seating capacity of the vehicles to seven in all or thirteen in all, as the case may be, and for issuance of motor cab or maxi cab permits on the basis of such altered seating capacity, as sought,
3. It is represented by the learned Govt. Pleader appearing for the respondents that in many of these cases, recourse is made directly to this Court without the petitioners approaching the competent authorities in the first instance seeking alteration.
4. In all these Writ Petitions this Court granted interim directions directing the competent authority, impleaded as the respondent, to alter the seating capacity of the petitioners’ vehicles and directing the respondents to issue a motor cab or maxi cab permit, as the case may be, so as to enable the respective petitioners to operate their vehicle as a motor cab or maxi cab, in particular districts. Pursuant to such interim directions, permits were granted and the petitioners are plying their vehicles.
5. Part of the issues involved in these Writ Petitions came to be considered by this Court in A. Narayana Rao v. Asst. Secretary, RTA, Secunderabad, wherein the learned Single Judge of this Court held that a registered owner need not obtain the approval of the registering authority if he intends to reduce or increase the seating capacity under Section 52 of the Act, so however, that if the result of any such changes involves an alteration exceeding two per cent of the weight entered in the registration certificate, the approval of the registering authority is necessary. In the said decision this Court declined to go into the question as to the quantum of tax payable in the event of the seating capacity having been factually altered by the owner of the vehicle and has further declined to go into the question and adjudicate upon the aspect whether the tax payable would be on the seating capacity as reflected in the registration certificate or the factual seating capacity provided by the owner. This Court left it open to the respondent authorities to collect the appropriate differential tax, in accordance with law.
6. Pursuant to the aforesaid decision of this Court, the Transport Commissioner issued a Circular Memo 12/86B/D1/99, dated 12-8-1999 inter alia directing,
(1) Cancellation of motor cab permits by issuing notices to registered owners to surrender the permits along with registration certificates. Along with the cancellation of the permit, the seating capacity in the registration certificate was to be restored to the position prevailing prior to the grant of motor cab permit by reducing seating capacity to seven in all on the interim directions of the High Court.
(2) To collect taxes at omnibus rate prospectively from the date of cancellation of the permit and restoration of seating capacity as omnibus.
(3) Check vehicles and book cases of the omnibuses misused as either contract carriages or stage carriages without permit, without payment of tax etc., by keeping a close watch on their movement.
7. This Circular of the Transport Commissioner was assailed in another batch of Writ Petitions No. 20335 of 1999 and batch which came to be considered by a Division Bench of this Court in O. Gangadhar and Ors. v. Transport Commissioner, A.P. and Ors., (D.B.). On an analysis of the legislative environment governing the issues involved, this Court categorically game to the conclusion that the petitioners are not entitled to continue the motor cab or maxi cab permits which were originally registered either as omnibuses or private service vehicles, as the case may be, obtained by them in respect of the vehicles registered otherwise, that the seating capacity of the vehicle would continue as reflected in the registration certificate irrespective of the factual diminution of the seating capacity effectuated by the owner and that for the purpose of consideration of grant of permits, the seating capacity as contained in the registration certificate is determinative and not the actual seating capacity provided by the owner. To elucidate, this Court held that notwithstanding the owner of a vehicles reducing the seating capacity factually, an application for grant of a permit in respect of such a vehicle would have to be considered in accordance with the seating capacity contained in the certificate of registration.
8. This Court further held that in view of the above conclusion of the legal environment, the petitioners are obligated to pay tax as fixed for the vehicle in question on the basis of its seating capacity as reflected in the registration certificate. In respect of the tax payable on such vehicles, this Court specifically analysed as under:
Once the petitioners are not entitled to continue the Motor Cab permits in respect of their Maxi Cabs/Omnibuses, the original tax as fixed has to be collected on the seating capacity as Omnibuses or as per their usage. However, if the petitioner wants to ply the vehicle for hire or reward, they will have to obtain Taxi Cab Permits by paying the tax applicable thereto under the relevant item.
The tax shall be levied on every motor vehicle used or kept for use in respect of the particular classes of motor vehicles as specified in the First Schedule by a notification. It is pertinent to note that as per Rule 5 of A.P. Motor Vehicles Taxation Rules, 1963, when there is an alteration in respect of any motor vehicle and that alteration results in payment of additional tax, the registered owner of such vehicle or any other person having possession or control thereof, shall file a declaration in Form 4 with the Licensing Officer together with certificate of registration by paying additional amount of tax payable in respect of that vehicle. Rule 5 does not provide for filing a declaration when the motor vehicle is altered resulting in lesser tax but only it provides for payment of additional tax. Thus, the Rules do not contemplate payment of tax at lesser rate on account of unilateral reduction in seats.
Coming to the taxation provisions, for Omnibus with seating capacity of more than 6 excluding the driver, the tax liable to be paid is Rs. 126/- for every person other than the driver. As the petitioners’ vehicles are liable to be treated as Omnibus, the tax liable to be paid by them will be at the above rate as per Sl.No. 7 of G.O.Ms.No. 75, dated 27-4-1993 which is the notification issued under Section 3 of A.P. Motor Vehicles Taxation Act. The petitioners’ Counsel submit that on account of reduction of seats, they are entitled to apply for and get Motor Cab Permits and in respect of Motor Cab, the tax payable is Rs. 345/- or Rs. 414/- per quarter as prescribed by S.No. 4(ii) and 4(iii). The said entries read as follows:
“4. Motor Vehicles plying for hire and used for Transport of passengers:
(i) xx xx xx
(ii) Vehicles permitted to carry 7 persons in all but excluding vehicles covered by All India Tourist Taxi Permits. Rs. 345/-.
(iii) Vehicles permitted to carry 7 persons in all and covered by All India Tourist Taxi Permits Rs. 414/-.
As already held supra, the seating capacity is the determining factor to identify the nature of vehicle unless any condition is imposed in the permit itself limiting the number of passengers to be carried. Moreover, even going by the language in the Clauses (ii) and (iii) of Sl.No. 4, it is difficult to come to the conclusion that the vehicles with seating capacity of more than 7, will answer the description specified in Clauses (ii) and (iii), even if the seats are reduced for the reasons best known to the petitioners. It cannot be said that the vehicle is permitted to carry only 7 persons in all inasmuch as the seating capacity of the vehicle, which is basically Omnibus, does not change.
Explanation-I relied upon by the learned Counsel cannot also come to their aid. The Explanation reads as follows:
“Explanation-I: The number of persons or passengers which vehicle is permitted to carry shall,-
(i) In the case of a motor vehicle in respect of which a permit is granted under Motor Vehicles Act, 1988, be the number of persons or passengers which the motor vehicle is authorised to carry by the permits; and
(ii) In the case of a motor vehicle plying for hire or reward without permit, granted under the Motor Vehicles Act, 1988, be the maximum number of persons or passengers which the vehicle may be permitted to carry, if a permit was granted under the aforesaid Act; and
Provided that in the case of Maxi Cab or Motor Cab or Motor Car misused as a stage carriage by the number of persons or passengers actually carried in the vehicle at the time of such misuse.”
We have already discussed the form of permits and the possible reasons for mentioning in the Form PC “number of passenger seats”. Whatever it may be, merely because in the form of permit issued to a Motor Cab, the number of passenger seats are specified to be less than 7, it does not mean that the vehicle is authorized to carry the number of persons equivalent to seats. Mere mention of number of seats does not mean that the permit granting Authority authorized the grantees of permit to carry passengers different from the seating capacity of the vehicle. Indisputably, the permits granted to the petitioners pursuant to the interim order do not contain any stipulation that the vehicle was permitted to carry specified number of passengers. The words “authorised to carry by the permits” should be given a meaning, which will not defeat or enable to circumvent the provisions of the Act.”
9. The Writ Petitions were dismissed by this Court upholding the Transport Commissioner’s Circular dated 12-8-1999 holding that the petitioners are not entitled to continue to correct the entries in the registration certificates nor are they entitled to continue to operate on the basis of consequential motor cab or maxi cab permits as have been obtained by them on the mere basis of reduction in the number of seats. This Court concluded that the Transport Department is entitled to restore the original entry in the registration certificates with regard to seating capacity and to register the vehicles as Omnibuses or retain their original registration as Omnibuses on the basis of the seating capacity as reflected in the registration certificate. In view of the fact that tax had been represented to have been paid for the quarter and permits were stated to be in force, this Court directed that no action be taken to cancel the permits upto 31-12-1999.
10. In view of the above settled legal position, the reliefs as sought for in this batch of Writ Petitions, would have to be declined. The petitioners would be at liberty to reduce the seating capacities of the vehicles within the ambit of Section 52 of the Motor Vehicles Act to the extent enunciated by this Court in the Judgment (1) supra, so however, that the entitlement of the petitioners to apply for, be considered and thereupon be granted permits would depend upon the seating capacity as reflected in the registration certificates irrespective of the actual seating capacity that they may be provided. The petitioners would also be obligated to pay tax on the basis of the seating capacity as reflected in the registration certificate and the permits granted to them on such basis.
11. At this stage, it is brought to the notice of this Court that some of the petitioners in the cases considered by the Division Bench (Judgment (2) supra) had approached the Supreme Court in SLP (Civil) Nos. 1931 to 1951 of 2000 and 1971 to 1977 of 2000 and by the order dated 2-2-2000, the Supreme Court directed stay of cancellation of the permits obtained by the respective petitioners after recording the statement by the Counsel for the petitioners to the effect that the petitioners would not challenge the collection of tax on the basis of unconverted vehicle.
12. Yet another Writ Petition No. 3848 of 2000 was instituted by some operators again seeking invalidation of the Transport Commissioner’s Circular dated 12-8-1999 and for restraining the respondents from cancelling the motor cab permits of the petitioners and for further direction to the respondents to collect tax as applicable to a motor cab. This Writ Petition came up to be considered in the aftermath of the aforesaid interim order of the Supreme Court dated 2-2-2000 and this Writ Petition was disposed of by the Division Bench of this Court as under:
“In the normal course, the writ petition should have been dismissed outright following the judgment in W.P.No. 20335 and batch. However, having regard to the interim order passed by the Supreme Court and the pendency of SLP in Supreme Court, we direct that there should be stay of cancellation of permit subject to further orders of the Supreme Court in the aforementioned S.L.P. At the same time, we make it clear that in view of the observation of the Supreme Court, the tax can be demanded and collected from the petitioners, ignoring, the conversion, the benefit of which the petitioners have got by virtue of the interim orders of this Court. In other words, the petitioners cannot claim to pay the tax applicable to a motor cab into which the vehicle was converted or got registered by the petitioners. They can however, pay the tax at the rate applicable to omnibus as per the circular of the Transport Commissioner so long as the said circular is in force and subject to further orders that may be passed by the Supreme Court.
The Writ Petition is disposed of accordingly.”
13. It now transpires on the basis of the extant law that the permits, if any, issued to the petitioners pursuant to the interim orders of this Court in these Writ Petitions, enabling them to ply their vehicles as motor cabs or maxi cabs, as the case may be and on the basis of the seating capacity as reduced by the petitioners, are all invalid. The petitioners are also obligated to pay tax on the basis of the seating capacity of the vehicles as contained in original registration certificate. The petitioners are also obligated to pay tax as prescribed in respect of an omnibus and in view of their having paid the tax applicable to a motor cab or a maxi cab, as the case may be, on the basis of the permits granted to them pursuant to the interim orders of this Court, they are now obligated to pay the differential tax as between the tax payable in the case of omnibus and the tax actually paid by them treating the vehicles as a motor cab or a maxi cab, as the case may be, from the date of issuance of the permits by the respondents. In view of the orders of the Supreme Court dated 2-2-2000 and the orders of the Division Bench of this Court dated 9-3-2000 above, the permits already granted to the petitioners treating their vehicles as motor cab or maxi cab, as the case may be, shall not be cancelled by the respondents pending disposal of the S.L.Ps. before the Supreme Court viz., S.L.P. (Civil) Nos. 1932 to 1951 of 2000 and 1971 to 1977 of 2000 or till the expiry of the permits held by them whichever is earlier. The respondents would, however, be at liberty to take such steps as are available to them in law for realization of the differential tax consequent on the judgment of this Court above from the petitioners.
14. The writ petitions are dismissed with the observations as above. No order as to costs.