P L D 1967 Supreme Court 279 (PLP)

CORNELIUS, C. J.‑In this certificated appeal, the question which arises is as to the taxability under the Bengal Motor Vehicles Tax Act, 1932, of certain tractors and trailers belonging to the appellant, namely, the North Bengal Sugar Mills Co., Ltd. Besides running a sugar factory, this Company also grows its own sugar‑cane. It maintains 26 tractors and 59 trailers. The company alleges that these tractors and trailers have been in use since the year 1933 and until a certain initiative was taken in 1960 by the District Magistrate of Rajshahi, they had never been required to pay any registration fees under the Motor Vehicles Act, 1939, and bad never been taxed under the Bengal Motor Vehicles Tax Act, 1932. The question was raised by the District Magistrate of Rajshahi by a letter dated the 29th January 1.960, to which the Secretary of the Company sent a prompt reply, saying "we are agreeable to pay the required taxes, the rates of which may kindly be intimated." In reply, the District Magistrate sent a detailed statement of the amounts claimed, which were calculated from various dates in 1958 and 1959. The sum so claimed amounted to nearly Rs. 35,

000. Again, the Secretary of the Company admitted the claim in a letter dated the 9th May 1960, in which he said "the amount due from us would be credited into the Treasury within next two weeks." Later, the Secretary asked for extension of time as reference had been made on the point to the Company's Head Office in Calcutta. On instructions from the Head Office, on the 7th July 1960, the Secretary sent a letter to the District Magistrate claiming that their "tractors and/or trailers which are used solely for agricultural purposes, are not in law liable to taxation under the Bengal Motor Vehicles Tax Act, 1932." In this letter the following facts were stated. It was said that the Company maintained an agricultural unit, operating on the land where they grew sugar‑cane to meet a part of the requirements of the Mill. This operation was distinct and separate from the manufacture of sugar, which was carried out by the manufacturing unit, i.e. the factory. The following admission as to the operations of the agricultural unit is important:‑ "The activity of the agricultural unit covers all operations from growing to the delivery of sugar‑cane to the manufacturing unit and there can be no doubt that all such operations are agricultural. We use our tractors and trailers exclusively for such operations, i.e., for agricultural purpose. They are never used for or in connection with operation of the manufacturing unit." Reference was made to section 2 (33) of the Motor Vehicles Act, 1939 containing a definition of the expression "transport vehicles," which reads as follows:‑ "transport vehicle means a public service vehicle, a goods vehicle, a locomotive or a tractor other than a locomotive or tractor used solely for agricultural purposes." It was pointed out that under the Motor Vehicles Rules, tractors and trailers used solely for the purposes of agriculture were exempt from the payment of registration fees. On this basis, it was argued that tractors used solely for agricultural purposes could not be taxed as transport vehicles. With reference to trailers, it was said that they did not come within the definition of a "motor vehicle" as defined in section 2 (18) read with section 2 (32) of the Motor Vehicles Act, and the further definition of "motor vehicle" in section 2 (3) of the Bengal Motor Vehicles Tax Act, 1932. This contention was not strictly correct, for in the Motor Vehicles Act, the expression "motor vehicle" is defined as. "any mechanically propelled vehicle adapted for used upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer ; but does not include a vehicle running upon fixed rails or used solely upon the premises of the owner." A trailer is therefore within the expression "motor vehicle. It is not contended by the Company that its tractors and/or trailers are used solely upon the premises of the Company. The reply to this letter from the District Magistrate was one repeating the demand, with added penalty at the rate of 50 per cent and allowing seven days for payment, the ground given being that the "tractors and trailers are solely used for commercial purposes." Thereupon, the Company moved a writ in the High Court to quash this order. The contentions mentioned above were repeated and the following further points were made in the application, namely, (i) that the tractors by themselves are incap able of transporting goods, and (2) that provisions for taxation of trailers in the Bengal Motor Vehicles Tax Act is contained in item 4 (e) of the Schedule to that Act, which was interpreted as meaning that the tax under item 4 falls only on "vehicles for transport of goods" and when such a vehicle is used for drawing one or more trailers, a supplementary tax of Rs. 100 for each trailer is imposed on it with the proviso that if a single trailer is used with more than one vehicle, only an additional surcharge of Rs. 100 would be made in respect of all vehicles. In the reply to the writ, it was urged that delivery of sugar‑cane to the manufacturing unit, i.e., transport of agricultural produce to a factory to undergo a process of manufacture, does riot form part of an agricultural operation. It wao admitted that "tractors used solely for agricultural purposes are excluded from the definition of `transport vehicles' in section 2 (3) of the Motor Vehicles Act; 1939, but it was denied that trailers are excluded from the definition of `motor vehicles' as defined in section 2 (18) read with section 2 (31) of the Motor Vehicles Act, 1939." The correct reference, however, was to section 2 (30) defining "tractor" as a motor vehicle which is not itself constructed to carry any load other than its propulsive equipment and the unladen weight of which does not exceed 16,000 pounds avoirdupois. It was also said in the reply that "as the decision of this writ petition involves a disputed question of fact regarding the actual use to which the tractors and trailers are put, the same does not lie and is liable to be rejected." The High Court declined to issue an order of quashment. In the judgment of the learned Judges, the question of the use to which the vehicles in question were put was regarded as a disputed question of fact on which the learned Judges gave no decision, because, as they said, it required an "elaborate investigation into facts in controversy." It had been argued before them that neither a tractor nor a trailer is by itself a motor vehicle and no combina tion of both could be regarded as a "motor vehicle". The learned Judges rejected the argument, and held that a vehicle composed of a tractor drawing one or more trailers could come within the meaning of "a motor vehicle for transport of goods" and was therefore taxable as a transport vehicle under item 4 in the Schedule to be Bengal Motor Vehicle Tax Act. In the opinion of the learned Judges, the tax would fall to he imposed not under clause (h) of item 4, which provided a supplement for a trailer, but under one of the earlier clauses imposing taxes according to the "laden weight" of the vehicle in question. A point was raised before the learned Judges by the Advocate. General that the Company had not exhausted all remedies under the Taxing Act. Under rule 48 of the Rules made under that Act, an appeal was provided for, in respect of such orders of a Taxing Officer as are not final. In reply to this argument, it was pointed out on behalf of the Company that the Act itself did not provide for an appeal, and that the reliance upon the power given by section 12 (2) (d) or the Provincial Government to frame rules "to regulate the manner in which refunds or deductions or exemptions may be claimed" was not well‑founded since this was not a case of a refund, or a deduction or an exemption being claimed. Moreover, it had not been possible for the learned Judges to ascertain which orders by the Taxing Officer were to be regarded "as not final". Accordingly, they concluded that the failure of the Company to move an appeal against the order of the Taxing Officer did not bar an approach to the High Court in its writ jurisdiction. On the finding that a combined tractor and trailer was a "vehicle for transport of goods", the learned Judges discharged the rule, which they had earlier issued to the Taxing Authority, but left the parties to bear their own costs. Mr. Ghulam Hafeez, who argued the case before us on behalf of the appellant‑Company mainly repeated the contentions already raised in the petition before the High Court. We have heard Mr. A. W. Chowdhury, for the Taxing Authority in reply. From the definition reproduced above, it is clear that a' tractor is within the expression "transport vehicle" unless it is I e used solely for agricultural purposes. Under Chapter 1V` of the Motor Vehicles Act, provisions are made for the control of transport vehicles of different kinds, e.g., stage carriages, contract carriages, private carriers and public carriers. For all such vehicles a permit is required to be obtained under section 42 of the Act. It would be seen that if a tractor were used exclusively for agricultural purposes, no permit would require to be taken for its use under Chapter IV of the Motor Vehicles Act, nor would it be subject to the various controls provided in respect of transport vehicles in Chapter IV aforesaid, but if a tractor were to be used partially or wholly for purposes which could not be described as "agricultural purposes," then indeed it would fall within the controls provided by Chapter 1V, and a permit would be necessary. A `trailer' as defined in section 2 (32) of the Motor Vehicles Act means "any vehicle other than a side‑car drawn or intended to be drawn by a motor vehicle," and as has been seen, the expression "motor vehicle" includes a trailer. All motor vehicles are required to be registered under Chapter III of the Motor Vehicles Act and their drivers are required to be licensed. There are other general provisions relating to "motor vehicles" in Chapter V, relating to construc tion, equipment and maintenance, in Chapter VI, as to control of traffic as well as in subsequent Chapters. Therefore, it seems that registration of a trailer to be drawn by a motor vehicles is compulsory. In the present case, the tractors as well as the trailors have been duly registered and each has its given numbers, all of which are set out in the Company's petition. The question of registration fee therefore does not arise for examination. We are unable to agree with the High Court that there was a necessity to hold an investigation as to the actual use by the Company of these tractors and trailers. The Company had admitted that it used the tractors and trailers, for conveying cut sugar‑cane to their own factory, and they had not claimed that such movement took place only within their own premises. On the question whether the carriage of agricultural produce from the place of production to a mill or factory, there is to be found precedent in a number of English cases dealing with very similar laws. Ellis & Co. v. Hulse (L R 1889 Q B 24) was a case of a locomotive belonging to a person who sometimes let it out to owners of farms for the purpose of carrying straw and manure from a wharf to their farms and at other times it was used by the owner himself for the purpose of carrying for hire, straw and manure for use on farms belonging to other persons. Under an Act of 1878, the owner was charged for not having obtained a licence from the county authority for making such use of his locomotive. The section in question was expressed not to apply "to any locomotive used solely for agricultural purposes." There was a conviction stated by the justices point of law by the Queen's Bench Division. Two learned Judges held concurrently that the law in question was designed to favour agriculture, and the question whether the owner of the locomotive was making commercial gain for his used was not determinative of the matter, which fell to be decided on the basis that the use made of the locomotives was for agricultural purposes only. The following quotation in the judgment of Field, J. contains the argument, which was raised before the Queen's Bench:‑ "All the operations for which it was used were agricultural purposes; but it is said that the purposes ceased to be agricultural, because super added to the final end for which it was used, that of carrying manures five miles to the farm, was the fact that it was done by the owner for purposes of gain. But that is not the reason why the engine was used ; it is the reason why the appellants bought it, the very sufficient reason that they might make an income out of it. It therefore falls within the ordinary meaning of the exemption, and cannot be taken out of it by reason of the motives of the appellants." To this may be added, the following quotation from the judgment of the other learned Judge Cave, J:‑ "The very object of this exemption is the well‑known one of favouring agriculture, an old object of English legislation in favour of a very important industry. If the respondent's view of this action is correct the exemption from licence duty would only arise where the farmer was sufficiently wealthy to keep an engine for himself, while encouragement is far more necessary in the case of the small farmer than of the wealthy one; and the effect of the section would be to tax the poor man and exempt the wealthy, a result which it is absured to suppose that the Legislature could have contemplated." The next case of this kind to be cited is Hoddell v. Parker (L R 1901 K 13 223). The Act of 1878 had in the meantime been replaced by an Act of 1898, which used the expression "agricultural locomotive" in the sense of a "locomotive used solely for threshing, ploughing or any other agricultural purpose." The new definition contains words which limit the scope of the expression "agricultural purposes." Agricultural locomotives were exempt from licence duty: In this case, the threshing engine had been given on hire to thresh wheat and to haul the wheat in trucks to a mill. It was held that hauling of wheat to the mill was not an agricultural purpose within the meaning of the Act. The definition in its widest meaning might include movements of the locomotive within the area of the farm, or even from one farm to another. But hauling of wheat to market for the purpose of sale would not be an "agricultural purpose", and equally hauling of wheat to the mill to be ground was not such a purpose. The decision evidently turned upon the narrowed definition of the expression "agricultural. locomotive", by express reference to user for farming operations only. The third case in point is that of London County Council v. Lee. (L R 1949, 3 K B 255) where again the Act of 1898 was sought to be implemented. Here, the fact was that a locomotive had been used for drawing trollies, i.e., trailers laden with farm produce to market for purpose of sale. Reliance was placed on a provision in section 17 of the Act, which saved also from a licence fee "any locomotive, the property of one or more owners or occupiers of agricultural land ‑employed solely for the purposes of their farms, and not let out on hire." What fell for determination in the case was whether carrying of the produce to the market was within the "purposes of the farm". This was not the same question as in the earlier case of Hoddell v. Parker, where such haulage was sought to be brought within the expression "agricultural purpose". It was held that a locomotive drawing trailers to market laden with farm produce, for the purpose of sale, was employed for a purpose of the farm, and it was pointed out that the decision in the case of Hoddell v. Parker had no bearing upon this question. Of these three cases, the one which lies closest to the facts of the present case is that of Hoddeli v. Parker where the expression "agricultural purpose" was interpreted as excluding haulage of farm produce to a mill for grinding. The conclusion there turned on the narrowed wording of the definition of "agricultural locomotive", and the finding was that carrying away farm produce from the farm, for further processing by an operation which was not in itself agricultural, was not carrying for an agricultural purpose. The words of limitation were not present in the law applied in the earlier 1889 case, where it was held that using a locomotive for hire, to perform operations, not on, but in relation to a farm, which were not strictly agricultural, was use "for an agricultural purpose". With respect, we are unable to accept that conclusion as generally valid. Its validity can only, with propriety, be confined to the facts of that particular case. In our opinion, the expression "agricultural purposes appearing in the definition of "transport vehicle" in the Motor Vehicles Act is to be understood in a narrow sense. Only such l tractor as is used "solely for agricultural purposes" is excluded from that expression and the use of the word "solely" would seem to indicate that the intention is that a strict interpre tation should be placed upon the exemption provided. Carriage of agricultural produce from the place of production to another place for a use other than an agricultural use is, on the face of not an act in the way of agriculture, that is to say cultivation of the land for the production of foodgrains, vegetables, cotton, sugar‑cane and other plants useful to man. The conversion of sugar‑cane to sugar in a factory is not an operation in agriculture. There is an admission that the tractors and trailers were used for haulage of cut sugar‑cane from the fields to the Company's factory, and it may be safely presumed that part of the movement was outside the Company premises. The tractors were clearly "motor vehicles", and being used partly for a purpose which was not strictly agricultural, they were also within the definition of "transport vehicle" contained in the Motor Vehicles Act. It has already been seen that a trailer is within the definition of "motor vehicle". Thus far the application of tile Motor Vehicles Act alone has been considered The question in issue, however, is whether these 26 tractors and 59 trailers qualify for imposition of taxation under the Taxing Act of 1932. That Act by section 16 empowers) the Provincial Government to "exempt either totally on partially any motor vehicle or class of motor vehicles from the tax." It is not alleged that any exemption has been notified in respect of these vehicles. They must therefore qualify for taxation, provided that they all within one or other description of "motor vehicle" detailed in the First Schedule. Item 4 of this schedule is headed "vehicles for transport of goods". It is true that the ordinary tractor is not designed for transport of goods. It is not said that any of the Company': tractors i~ adapted for the carriage of goods by itself: Trailers, however, are meant for the carriage of loads and trailers are within the definition of "motor vehicle I contained in the Motor Vehicles Act as well as under the definition of "motor vehicle" contained in the Taxing Act, which reads as follows:‑ 99 'motor vehicle' includes a vehicle, carriage or other means of conveyance propelled or which may be propelled, on a road by electrical or mechanical power either entirely o partially." But a trailer as such is not subjected to tax under item 4 of the aforesaid Schedule. It is‑only if a "vehicle for transport of goods" is used for drawing a trailer, that there would be imposed upon such vehicle a tax of Rs. 100 in respect of such trailer. The argument placed before us is that the Company's tractors are not within the definition of "transport vehicle", and are therefore not taxable even if they draw trailers. That argument fails, since we have found that they are admittedly being used, in part, for a purpose which is not an agricultural purpose in the strict sense. It follows that under item 4, of the Schedule, each falls to be taxed according to its "weight laden". The expression "weight laden" is defined as having the same meaning as "registered laden weight" as defined in the Motor Vehicles Act, and "registered laden weight" means "in respect of any vehicle the total weight. of the vehicle and load certified and registered by the registering authority as permis sible for that vehicle." A question arises whether the word "Load" is to be understood in the sense of a weight carried on the vehicle itself, that is, so as to exclude any weight which may be drawn behind the vehicle, e.g., on a trailer. By definition a tractor is a motor vehicle which is not itself constructed to carry any load" other than its propulsive engine and giving full meaning to these words, it would seem that the load to which it refers is one that may be carried upon the structure of the tractor itself. In this case, the presumption must be that the tractors in question are not constructed so as to carry any load, but belong to the usual type of such vehicles which have a propulsive engine and a driving seat for the driver, but no chassis to carry a body, although they have fitments enabling attachment of devices such as ploughs, harrows and other equipment employed for strictly agricultural operation as well as for drawing behind them trailers on which loads may be carried. Yet it is clear that a tractor used for building operations' or for hauling goods in trailers, in the way of commerce or for trade, being within the definition of "transport vehicle" would be subject to the requirement of a private or public carrier permit, and to other controls, under sections 52 to 55 and to other sections in Chapter IV of the Motor Vehicles Act. In the absence of an exemption, such a tractor would also be liable to tax, according to its "registered laden weight". We cannot imagine that the great number of tractors which are used for strictly non agricultural purposes are being operated free of tax, merely because they are not built to carry loads on their own structure, and for that reason alone cannot have a "registered laden weight". The "registered laden weight" of a transport vehicle is a weight fixed and registered by a prescribed authority. We entertain no doubt that such weights have been fixed and registered in respect of all standard makes of tractors, for the purpose of imposition of tax on them, in the category of transport vohicles. The tractors in this case having been found to fall in this category, they are clearly taxable, each according to its "registered laden weight" which we presume has been, or at any rate, is cap able of being, fixed by the competent authority. As the number of trailers used with these 26 tractors is 59, i.e., in excess of the number of tractors by which they may be drawn, the supplemen tary charge of Rs. 100 per trailer may appropriately be distributed over the 26 tractors, as if 7 of them draw 3 trailers each and the remaining 19 drawn 2 trailers each. It is conceivable that the demand for tax made from the Company may need modification in the light of what has been said in the preceding paragraph. We feel no doubt that it is within the power of the taxing authorities, whether in appeal under the Rules made under the taxing Act or otherwise, to make these modifications. With these observations, we dismiss this appeal, but as the questions raised were not free from difficulty, we leave the parties to beat their own costs. Appeal dismissed.