JUDGMENT
M.N. Rao, J.
1. This batch of cases is concerned the validity of the circular issued by the Joint Transport Commissioner and Secretary, Regional Transport Authority, Hyderabad in No. 36/54384/D1/95 dated 22-11-1995 by which, inter alia, the Assistant Secretaries who are permit issuing authorities in respect of the transport vehicles, were requested not to issue temporary permits for transport of factory employees collecting pro-rata tax inasmuch as the need is a regular one, and that they should collect quarterly tax in advance at the time of issue of permits and keep regular DCB and keep a watch on their movement during the periods when they are not covered by permit and book cases. The petitioners are the owners of motor vehicles popularly known as ‘Idle Contract Carriages’. They are not covered with permits to ply either as stage carriages or contract carriages for any fixed period. As and when a temporary need arises, the owner would obtain a permit under Section 87 or 88 (8) of the Motor Vehicles Act. It is not necessary to go into the ingredients of these two sub-sections since the validity of the permits is not at issue in these cases. The petitioners make available their vehicles on daily basis for hire to the private contractors, who in turn, under agreements with certain Public Sector undertakings, use these vehicles for transporting the employees of the Corporations. Under the Motor Vehicles Taxation Act, the Government by notification is empowered to levy tax in the manner specified therein. Section 9 of the Act confers powers on the Government to grant exemption or reduce the rate or modify the tax payable by any person or class of persons in respect of any motor vehicle running in any particular area. In exercise of the power under Section 3, the State Government issued G.O.Ms. No. 137 dated 22-8-1995 by which the quarterly tax per seat per passenger concerning contract carriages carrying more than six passengers on Inter-State routes on All India tourist permits was fixed at Rs. 1,051/- and in respect of the other contract carriages plying within the home district and in one contiguous district, at Rs. 875/-. The Government also in exercise of power under Section 3 issued G.O.Ms. No. 139, TR & B (Tr .II) dated 22-8-1995 reducing the rate of tax in respect of:
1. Idle Contract Carriages
2. Stage Carriages covered by basic permits
3. Stage Carriages covered by spare permits, plying on the strength of temporary/special permits issued under Section 87 or sub-section (8) of Section 88 of the Motor Vehicles Act, 1988 as specified below:
"Class of Vehicles Rate of Tax
In respect of Contract Carriages Rs. 35 /- (Rupees thirty five only) per
plying on Intra-State or Inter- seat for minimum period of 3 days
State Routes. and Rs. 13/- (Rupees thirteen only)
per seat per day for a period
exceeding 3 days."
2. The above concessional rate of tax is subject to seven conditions specified therein, of which conditions 6 and 7 which are relevant read as follows:
Condition No. 6:
"Violation of any of the conditions specified above will entail in levy of full quarterly tax."
Condition No. 7:
"The concession of payment of tax for a minimum period of three days shall not be admissible in respect of vehicles plying on long term contracts exceeding 30 days."
3. The Joint Transport Commissioner and Secretary, Regional Transport Authority, Hyderabad, in and by the impugned circular after adverting to the fact that some Assistant Secretaries are issuing temporary permits for vehicles transporting factory employees on a regular basis and that several such breaches came to his notice, issued the following instruction:
“Not to issue temporary permits for ideal buses transporting factory employees on a regular basis by collecting pro-rata tax as notified under G.O.Ms. No. 139, TO & B (Tr.III) Department, dated 22-8-1995 since the purpose of levying tax on pro-rata basis is altogether different like going on short tours, pilgrimage, marriage parties etc.”
4. The above instruction contained in the impugned circular is the subject matter of dispute in this writ petition. Sri. K.N. Jwala, the learned Counsel for the petitioners contends that when the rate of tax was subjected to certain conditions by the State Government in exercise of their statutory power under Section 9 of the Motor Vehicles Taxation Act, it was not open to the Joint Transport Commissioner to direct the Assistant Secretaries to collect quarterly tax in advance in respect of the vehicles covered by G.O.Ms. No. 139 dated 22- 8-1995. In opposition to this, the learned Government Pleader says that the vehicles in question were not utilised for any temporary need and by no stretch of reasoning can it be said that transporting the employees from their residences to the factory and back is a temporary need, and therefore, the circular issued by the Joint Transport Commissioner and Secretary does not suffer from any infirmity. Sri Eshwaraiah, the learned former Government Pleader, who was requested by us to assist the Court as Amicus Curiae, has invited our attention to several Sections of the Motor Vehicles Act and in particular Sections 88 (1) (c) and submitted that the issue of temporary permits to the vehicles belonging to the petitioners was not justified as the need would appear to have been a regular one.
5. As already observed by us, we are not concerned with the validity of the permits issued by the authorities. When once power was exercised by the Government under Section 9 of the Motor Vehicles (Taxation) Act to reduce the rate of tax in respect of certain categories of the vehicles subject to the conditions mentioned therein, the Transport Commissioner cannot alter the same by expressing the opinion that the need was a regular one, and the permit holder should pay quarterly tax. Condition No. 7 which is extracted supra says in specific terms that the concession of payment of tax for a minimum period of three days shall not be admissible in respect of vehicles plying on long term contracts exceeding 30 days. In all these cases, it is asserted by the petitioners that the contracts in respect of their vehicles did not exceed 30 days and that they have not violated condition No. 7 so as to attract the liability of payment of quarterly tax. We see some force in this contention. If the condition is violated, it is always open to the authority to take action and subject the owner of the vehicle to higher rate of tax. But so long as that did not happen, the authorities would not be justified in treating the vehicles, which otherwise are entitled to the lower rate of tax, as liable to tax at either higher rate or for a longer period. In all these cases, the permit period was only 30 days and to ask the holder of such permit to pay quarterly tax is on the face of it arbitrary and unreasonable. What course of action in future the authorities should follow is not the concern of this Court. We, therefore, hold that the impugned memo will not entitle the authorities to collect quarterly tax in respect of the temporary permits already issued for periods not exceeding one month. All the writ petitions are accordingly allowed. A writ will issue accordingly.
6. We place on record our high appreciation of the assistance rendered by Sri V. Eswaraiah, the former Government Pleader as an Amicus Curiae.