JUDGMENT
G.G. Sohani, Actg. C.J.
1. This is a petition under Article 226 of the Constitution of India.
2. The material facts giving rise to this petition, briefly, are as follows: The petitioner was granted by the State Transport Authority, Maharashtra, a permit under the Motor Vehicles Act, 1939 (hereinafter called the Act) for plying stage carriages on the route Nagpur-Warud via Pandhurna, for a period of three years expiring on 30-6-1984. A part of the aforesaid route falls within the State of M.P. and is, therefore, Inter-State route and is covered by an agreement entered into between the State of Maharashtra and the State of Madhya Pradesh under the provisions of Section 63-A of the Act. As required by Section 63(1) of the Act, the permit granted to the petitioner as aforesaid, was countersigned by the State Transport Authority, Madhya Pradesh. The application for renewal of the aforesaid permit submitted by the petitioner, was rejected by the State Transport Authority, Maharashtra. Hence the petitioner preferred an appeal before the State Transport Appellate Tribunal, Maharashtra and also obtained a temporary permit for plying stage carriages on the aforesaid route from 2-7-1984 to 31-10-1984. The temporary permit issued to the petitioner, was countersigned by the State Transport Authority, Madhya Pradesh. In the meanwhile, on 13-10-1984, during the pendency of the appeal preferred by the petitioner before the State Transport Appellate Tribunal Maharashtra, the Tribunal passed an order Under Section 134(1-A) of the Act directing that the permit, renewal of which was refused, would continue to be valid until the disposal of that appeal. In pursuance of the direction, the State Transport Authority Maharashtra, issued an authorisation letter to the petitioner to operate on the route in question and the authorisation was countersigned by the State Transport Authority, Madhya Pradesh, on 15-11-1984. Subsequently, by order dt. 15-3-1985, the appeal preferred by the petitioner was allowed. Consequently, the permit in question granted to the petitioner, was renewed for a further period of three years and the permit so renewed, was countersigned by the State Transport Authority, Madhya Pradesh. On 6-9-1986, respondent 1, the Tax Officer-cum-Regional Transport Officer Jabalpur, issued a notice to the petitioner to show cause why action be not taken against the petitioner for recovering a sum of Rs. 22,97,362.00 by way of additional tax for having plied passenger bus on the aforesaid inter-State route from 1-11-84 to 31-3-1985 in the absence of a valid permit duly countersigned by the State Transport Authority, M.P. The petitioner showed cause and contended that the substantive permit granted to the petitioner by the State Transport Authority, Maharashtra, was counter-signed by the State Transport Authority, M.P.; that the temporary permit granted to the petitioner from 2-7-84 to 31-10-84 was also counter-signed by the State Transport Authority, M.P.; that in the appeal preferred by the petitioner before the State Transport Appellate Authority Maharashtra, from the order rejecting the application for renewal of permit, the Appellate Tribunal had given a direction Under Section 134(1-A) of the Act that the. permit would remain valid until the disposal of the appeal notwithstanding its expiry on 30-6-84; that the appeal was disposed of on 15-3-85 whereby the permit granted to the petitioner was renewed and that it was countersigned by the State Transport Authority, M.P. Thereafter, by notice dt. 1012-86 (Ex.1), the demand for the balance of the additional tax made from the petitioner earlier, was reduced and the petitioner was called upon by respondent 1 to pay a sum of Rs. 2,81,742.00 on account of balance of additional tax payable by the petitioner under the provisions of Section 3-A of the Motor Vehicles Taxation Act 1947 (hereinafter referred to as the Taxation Act), for plying passenger buses on the aforesaid inter-State routes from 1-11-84 to 14-11-84 without a valid permit. Aggrieved by this demand, the petitioner has filed this petition praying that the demand for the sum of Rs. 2,81,742.00 made by the respondent 1 from the petitioner, is illegal and deserves to be quashed.
3. In the return filed on behalf of the respondents, it is admitted that a stage carriage permit was issued to the petitioner for plying stage carriages on the inter-State route Nagpur-Warud via Pandhurna for a period of 3 years expiring on 30-6-84; that the permit so granted, was countersigned by the State Transport Authority, M.P.; that the temporary permit issued to the petitioner for operating on the aforesaid route from 2-7-84 to 31-10-84 was also countersigned by the State Transport Authority, M.P.; and that the authorisation issued to the petitioner in pursuance of the order passed by the State Transport Appellate Tribunal Maharashtra, was also countersigned by the State Transport Authority, M.P., on 15-11-1984. It is, however, contended by the respondents that for the period from 1-11-84 to 14-11-84, the petitioner had operated on the inter-State route in the absence of a permit duly countersigned by the State Transport Authority, M.P. and that the petitioner was, therefore, liable to pay the balance of the additional tax as demanded from it under the provisions of the Taxation Act.
4. Learned counsel for the petitioner contended that the effect of the order passed by the State Transport Appellate Tribunal, Maharashtra, Under Section 134(1-A) of the Act, was to keep the substantive permit granted to the petitioner to operate on the inter-State route in question alive till 15-3-85, the date of the disposal of the appeal, notwithstanding the expiry of the term of the permit and that as the said permit was countersigned by the State Transport Authority M.P., it could not be held that the petitioner was operating on the route in question without a valid permit duly countersigned by the State Transport Authority, M.P. It was also contended that as the inter-State route in question was covered by the agreement entered into between the State of Maharashtra and the State of M.P. Under Section 63-A of the Act, countersigning a permit granted by the State Transport Authority, Maharashtra, was a ministerial act and the State Transport Authority, M.P. had no discretion to refuse to countersign the permit. It was, therefore, contended that the petitioner could not be held liable for payment of additional tax on the basis that the petitioner was operating on the route in question without a valid permit. In reply, Shri Saxena, learned Additional Advocate General, contended that the order passed by the State Transport Appellate Authority, Maharashtra Under Section 134(1-A) of the Act was not binding on the State Transport Authority, M.P. and as the permit granted to the petitioner for operating the inter-State route was not countersigned for the period from 1-11-84 to 14-11-84, the petitioner was rightly held liable to pay additional tax as demanded by respondent 1.
5. The first question for consideration is whether the demand for the balance of the additional tax made from the petitioner, vide Ex. 1, is valid. That demand is based on the allegation that from 1-11-84 to 14-11-84, the petitioner had plied stage carriages in the State of M.P. without a valid permit. Before we proceed to appreciate the contentions advanced by the learned counsel for the parties, it would be useful to refer to the relevant provisions of law in that behalf.
6. Under Section 3A of the Taxation Act, additional tax is levied on all public service vehicles having seating capacity exceeding six passengers excluding the driver and the conductor, at the rate specified in the Third Schedule. It is undisputed that if the provisions of Clause (1) of Entry 1 of the Third Schedule are applicable, i.e. if the petitioner is held to have operated on the route in question under a valid permit, the petitioner has paid the additional tax leviable in such case. However, the allegation of the respondent is that the provisions of Clause (c) of item 1 of the Third Schedule are applicable. That provision is attracted when a stage carriage is operated without permit. In that case, the additional tax payable is Rs. 100.00 per passenger per day for the full compliment of passengers as per seating capacity, for the period the vehicle was so used. It is not disputed that if it is held that the petitioner had plied stage carriage on the route in question without a valid permit from 1-11-84 to 14-11-84, then the petitioner would be liable to pay the amount of additional tax as demanded from the petitioner by respondent 1. The question for consideration, therefore, is whether from 1-11-84 to 14-11-84, the petitioner can be held to have plied stage carriages on the route in question in the State of M.P, without a valid permit in that behalf.
7. Now the route in question is an inter-State route covered by an agreement arrived at between the State of M.P. and the State of Maharashtra Under Section 63-A of the Act. The petitioner was granted a permit by the State Transport Authority Maharashtra to operate on that route and the period for which the permit was granted, expired on 30-6-84. Under the provisions of Section 63(1) of the Act a permit granted in any one State is not valid in any other State unless it is countersigned by the State Transport Authority of the other State. It is not disputed that the substantive permit granted to the petitioner was countersigned by the State Transport Authority, M.P. and that while countersigning that permit, no condition as to duration or otherwise was attached to the permit. The consequence of countersigning the permit by the State Transport Authority M.P. was not that the permit which was valid in the State of Maharashtra, also became valid in the State of M.P. for the entire period for which the permit was granted. Normally, after the expiry of the period specified in the permit, the permit would have ceased to be valid both in the State of Maharashtra and in the State of M.P., but by an order passed by the State Transport Appellate Tribunal Maharashtra, Under Section 134(1-A) of the Act, not-withstanding the expiration of the term specified in the permit, it continued to be valid until the disposal of the appeal preferred by the petitioner from the order passed by the State Transport Authority rejecting the application of the petitioner for renewal of the permit. The provisions of Section 134(1-A) of the Act read as under :
“134(1)……………….
“(1-A). Notwithstanding anything contained in Sub-section (1), if an an application made by a person for the renewal of permit has been rejected by the original authority and such person has preferred an appeal or made an application for revision under this Act against such rejection, the appellate authority or, as the case may be, the revisional authority may, by order, direct that the permit shall, notwithstanding the expiration of the term specified therein, continue to be valid until the appeal or application for revision is disposed of.”
From a perusal of the aforesaid provision, it is clear that the permit granted to the petitioner and of which renewal was refused by the State Transport Authority Maharashtra, continued to be valid till 15-3-1985 when the appeal preferred by the petitioner was disposed of. The effect of the order passed by the State Transport Appellate Tribunal Maharashtra, Under Section 134(1-A) of the Act, was that the term for which the permit was granted by the State Transport Authority Maharashtrai to the petitioner, got extended till the disposal of the appeal. As the substantive permit granted to the petitioner by the State of Maharashtra for operating on the route in question was valid in the State of M.P. by virtue of the fact that it was countersigned by the State Transport Authority M.P., the period for which the permit would be valid in the State of M.P., would be the same for which it was valid in the State of Maharashtra. The learned Additional Advocate General contended that after the expiry of the period specified in the permit, it became an invalid permit in the State of M.P. The contention cannot be upheld in view of the fact that the period for which the permit had been granted, had not come to an end by virtue of the order passed by the State Appellate Tribunal, Maharashtra, Under Section 134(1-A) of the Act. The effect of the order passed by the State Transport Appellate Tribunal Maharashtra, was that the substantive permit granted to the petitioner remained alive till the disposal of the appeal. As that substantive permit was countersigned by the State Transport Authority M.P., it continued to remain valid in the State of M.P. till such time as the substantive permit remained alive. It, therefore, follows that til 15-3-85, the date of the disposal of the appeal, the petitioner could not be held to have plied its stage carriages in the State of M. P. without a valid permit. Thus the petitioner could not be held liable to pay additional tax at the rate ‘applicable to persons plying passenger buses without a permit, in the State of M.P. The demand for the balance of the additional tax amounts to Rs. 2,81.742.00 cannot, therefore, be sustained in law.
8. For all these reasons, this petition is allowed. The demand for Rs. 2,81,742.00 made from the petitioner by notice Ex. No. 1, is quashed. The sum of Rs. 1,00,000.00 deposited by the petitioner with respondent 1 in pursuance of the interim order passed by this Court on 6-11-1987, shall be refunded to the petitioner and the bank guarantee furnished by the petitioner for the remaining amount to respondent 1, shall stand discharged. In the circumstances of the case, parties shall bear their own costs. Security amount, if any, be refunded to the petitioner.