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2018 (12) TMI 795 - SC - Indian LawsLevy of Motor Vehicles Tax / additions tax - marginal tax - chassis of the motor vehicles manufactured by the appellants during the period these chassis are in their “possession”, i.e., before they are delivered to the dealers and/or the purchasers of the said vehicles - Section 6 of the Bihar Motor Vehicles Taxation Act, 1994 - constitutionality of Section 6 - Held that:- Under Section 5, tax is payable at the time of registration of the vehicle, which is payable by the registered owner. In contrast, Section 6 is the stage before that as it is on the event of the vehicle being possessed by the manufacturer or dealer - the appellants are liable to pay tax under Section 6 of the Bihar Act. May be, Section 6 is not happily worded. But the intent is to convey that tax will not be payable as per Schedule I which is payable under Section 5 but in place thereof it would be payable as per Schedule III. Penalty - Held that:- Section 23, in no uncertain terms, lays down that any person who does not pay the tax during the prescribed period shall pay a penalty at the rate prescribed by the State Government together with arrears of tax. Therefore, for non-payment of the tax within the prescribed period, penalty becomes payable at the rates specified in Rule 4. The vires of Section 6 were challenged in the High Court in earlier proceedings and this challenge was repelled. Further, since Rule 4 uses the expression ‘may’, on that basis it was also argued that this rule gives discretion to the Assessing Officer. Under the Bihar Act, as per Section 23, penalties levied for breach of statutory duty for non-payment of tax. While upholding the validity of Section 23 of the Act, insofar as penalty is concerned, the Court had set aside the same on the ground that before imposing the penalty, no show cause notice was issued - Permission was given to the tax authorities to take fresh decision after giving the show cause notice. It is an admitted case that show cause notices were issued and after hearing the appellants, the penalty was imposed. Appeal dismissed.
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