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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5299-5304 OF 2003

M/S. TATA MOTORS LIMITED .....APPELLANT(S)

VERSUS

STATE OF JHARKHAND AND OTHERS .....RESPONDENT(S)

W I T H

CIVIL APPEAL NO. 6591 OF 2003

A N D

CIVIL APPEAL NOS. 8-12 OF 2004

J U D G M E N T

A.K. SIKRI, J.

A  common  question  of  law  which  arises  in  all  these  appeals

pertains to levy of tax by the respondent No.1 State under Section 6 of

the Bihar Motor Vehicles Taxation Act, 1994 (hereinafter referred to as

the ‘Bihar Act’) on the chasis of the motor vehicles manufactured by the

appellants during the period these chasis are in their “possession”, i.e.,

before they are delivered to the dealers and/or the purchasers of the

said vehicles.

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2) The Bihar Act envisages three kinds of taxes, namely:

(a)  on registered vehicles under Section 5 of the Act;

(b)  on vehicles held under trade certificates as per Section 6 of the Act; and

(c)   in  respect  of  vehicles  registered,  where  the  registration  is  temporary, a

marginal tax under Section 7(4) of the Act.

3) As  would  be  noticed,  tax  under  Section  5  of  the  Bihar  Act  is  paid  by  the

ultimate buyers who, on purchase of vehicles and becoming owners thereof, get

these vehicles registered in their names.  After the manufacture of the vehicle

and before it is sold to the ultimate buyer to use the said vehicle, a temporary

registration is required by the manufacturer under Section 7 of the Bihar Act.

Since this registration is temporary for a limited duration, a fractional tax is

paid by the manufacturer or dealer under Section 7(4) of the Bihar Act.  Section

6, on which the fulcrum of dispute revolves, deals with those vehicles which are

in possession of a manufacturer or dealer in the course of his business and are

held under trade certificates.  Sections 5, 6 and 7 are reproduced below in order

to have an idea of the payment of these three motor vehicle taxes:

"5.  Levy of tax  – (1) Subject to other provisions of this Act, on and from the date of commencement of this Act, every owner of a registered motor  vehicle  shall  pay  tax  on  such  vehicle  at  the  rate  specified  in Schedule I.

(2)  Subject  to other provisions of this  Act,  on and from the date of commencement of this Act, every owner of a registered motor vehicle shall  pay  Additional  Motor  Vehicles  Tax  on  such  vehicle  at  the  rate specified in Schedule II.

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(3)   The  State  Government  may,  by  notification  from  time  to  time, increase the rate of tax specified in the Schedules:

Provided  that  no  such  increase  shall,  during  any  year,  exceed  fifty percent of the rate of taxes prescribed in the Schedules.

6.  Tax payable by a manufacturer or a dealer – A tax at the annual rate specified in Schedule III in lieu of the rates specified in Schedule I shall be paid by a manufacturer or a dealer in motor vehicles in respect of the motor vehicles in his possession in the course of his business as such manufacturer or dealer under the authorisation of trade certificate granted under the Central Motor Vehicles Rules, 1989.

7.  Payment of tax –

xx xx xx

(4)  In the case of motor vehicles temporarily registered under Section 43 of  the  Motor  Vehicles  Act,  1988,  the  tax  for  vehicles  other  than personalised  vehicles  shall  be  levied  at  the  rate  of  1/12th  of  the  tax payable for the year for such vehicles.  In case of extension of the period of temporary registration under the proviso to sub-section (2) of Section 43 tax at the rate of 1/12th payable for the year shall be payable on every extension of temporary registration for period of 30 days or part thereof;

Provided  that  for  temporary  registration  of  personalised  vehicles  the rates of tax will be Rs.50/- for a motor cycle (including moped, scooter and cycle with attachment for propelling the same by mechanical power) and Rs.100/- for a motor car.”

4) As is clear from the reading of these Sections, Section 5 is the charging section

as per which every owner of a registered motor vehicle is under an obligation to

pay tax on such vehicle, rates whereof are specified in Schedule I.  Insofar as

Section 6 is concerned, liability is cast on the manufacturer of motor vehicles or

a  dealer  in  motor  vehicles  to  pay  tax  in  respect  of  motor  vehicles  in  his

possession in the course of his business as a manufacturer or a dealer, under the

authorisation of trade certificate granted under the Central Motor Vehicle Rules,

1989  (hereinafter  referred  to  as  ‘MV  Rules’).   Here  tax  is  at  annual  rate

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specified in Schedule III, which is ‘in lieu’ of the rates specified in Schedule I.

It clearly implies, therefore, that a manufacturer or dealer pays the tax in respect

of vehicles in his possession for which he has been granted trade certificate

which authorises him to possess the said vehicle before it is sold to the ultimate

consumer. Obviously, the rate specified in Schedule III is much lesser than the

tax which is payable by the registered owner under Section 5 of the Bihar Act.

5) Section 7(4), on the other hand, applies to those cases where the motor vehicles

are temporarily registered under Section 43 of the Motor Vehicles Act, 1988

(hereinafter referred to as the ‘MV Act’).  In contrast with Section 6, here the

person,  unlike  the  manufacturer  or  dealer  having  trade  certificate,  gets  the

vehicle registered on temporary basis.  The tax levied here is 1/12th of the tax

payable for the year for such vehicles.

6) The  three  situations,  thus,  become  obvious.   A  manufacturer  after

manufacturing motor vehicle would be in possession of the said vehicle till it is

delivered to a dealer.  Likewise, a dealer would remain in possession of such a

vehicle till it is sold to the consumer.  Ordinarily, a motor vehicle cannot be

driven unless it is registered.  That requirement is provided under Section 39 of

the MV Act.  It is in consonance with this provision that under Section 5 of the

Bihar Act, tax is levied by the respondent State on the owner of the registered

vehicle, at the time of registration. Since this tax is to be paid by the ultimate

owner  who purchases the vehicle,  to  avoid double taxation and payment  of

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same tax by the manufacturer or dealer, Rule 33 of the MV Rules exempts such

manufacturer  or  dealer  from  the  necessity  of  registration  subject  to  the

condition that they obtain trade certificates from the registering authority.  It is

because of the reason that in the course of their business as manufacturer or

dealer  the  vehicle  would come on the  road and would be  driven.   For  this

reason, a dealer or a manufacturer of motor vehicle is permitted to obtain trade

certificate so that he is exempted from registering the vehicle in his name.  The

Bihar Act, even in such a case, contemplates levy of tax.  This tax is payable

under Section 6 at the annual rate specified in Schedule III, as noted above.  In

case a dealer or a manufacturer is not having trade certificate, in order to drive

the motor vehicle during the period it remains with him, he is supposed to get

the vehicle registered for a temporary period.  This temporary registration is to

be done as per the provisions contained in Section 43 of the MV Act.  It may be

clarified that such temporary registration can be obtained by any person who is

the owner of a motor vehicle and is not confined to a dealer or a manufacturer.

An owner who gets the vehicle temporarily registered in his name is supposed

to  pay  tax  under  the  Bihar  Act  though  at  a  much  lesser  rate  than  the  rate

specified in Schedule I, inasmuch as it is only at the rate of 1/12th of the tax

payable  for  the  year  for  such  vehicles.   It  is  because  of  the  reason  that

temporary registration is for a period of one month.

7) All  the  appellants  in  these  appeals  fall  in  the  category  of  manufacturers  or

dealers of the motor vehicles.  They have paid taxes under Section 7(4) of the

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Bihar  Act.   Likewise,  in respect  of  those vehicles retained and used by the

appellants for their own purposes and not sold, these appellants have discharged

their tax liability under Section 5 of the Bihar Act as well.

8) In the aforesaid backdrop, the issue is  as  to  whether such manufacturers  or

dealers, like the appellants herein, are liable to pay tax under Section 6 as well.

To reiterate,  after  the  manufacture  of  the  vehicle  when  it  remains  with  the

manufacturer (or when it remains with the dealer after delivery thereof to the

dealer by the manufacturer) and before it is sold to the ultimate consumer, the

vehicle is brought on the road and is driven.  It maybe for the purpose of testing

the technical suitability of such a vehicle or when it goes for delivery from the

manufacturer’s factory to the dealer’s showroom.  Likewise, dealer may also

drive this  vehicle  for  limited  purpose,  say  it  is  driven by the customer  etc.

Since, a vehicle cannot be brought on road and be driven without any valid

registration,  contemplates  two  situations  to  meet  such  contingencies.   It

provides for temporary registration under Section 43 of the MV Act.  Another

option is given to those manufacturers or dealers who obtain trade certificates

from the registering authority and in such a case as per Rule 33 of the Motor

Vehicle  Rules,  manufacturers  or  dealers  are  exempted from the necessity  of

registration.  The appellants in these appeals are either manufacturers or dealers.

They have paid taxes under Section 7(4) of the Bihar Act.  In respect of such

vehicles, taxes also stand paid under Section 5 of the Bihar Act.  Question of

additional tax liability under Section 6 of the Act arises in this backdrop.

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9) Before we answer this question, it would be necessary to take note of those

amendments in the Central Government, i.e., MV Act from time to time which

have bearing on these cases.

10) Section 2(8) of the MV Act (the Central Act) provides the definition of

‘dealer’.  As per this provision, as originally stood, a manufacturer was also

included in the definition of ‘dealer’.  However, this provision was amended

vide Act 54 of 1994 whereby the Legislature omitted ‘manufacturer’ from the

ambit  of  the  expression  ‘dealer’.   The  manufacturer,  therefore,  no  more

remained the dealer. The amended definition of ‘dealer’ which came into effect

with effect from November 14, 1994, is as under:

"2. Definitions.—In this Act, unless the context otherwise requires,—

(8) “dealer” includes a person who is engaged— (a) [* * *] (b) in building bodies for attachment to chassis; or (c) in the repair of motor vehicles; or (d) in the business of hypothecation, leasing or hire-purchase of motor vehicle;”

11) Thus, under the Central Act, prior to its amendment in November, 1994,

motor vehicles would require registration in all events, save and except those

which were in possession of “dealers”.  In the latter event, the vehicles could be

temporarily  kept  under  a  trade  certificate,  which,  under  the  rules,  provides

extremely limited mobility.  In November, 1994, manufacturers were taken out

of this exception by amendment in the definition of dealers.

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12) The Bihar Motor Vehicle Rules, 1992 (Bihar Rules) as applicable in the

State  of  Bihar  and in  some  other  States  were  amended  as  empowering  the

manufacturers  themselves to  act  as  authorities,  who could grant  temporarily

registration.  Thus, under the revised scheme post November, 1994, it is only a

dealer (other than a manufacturer) who could keep a vehicle for a limited period

of  time  under  a  trade  certificate.   Manufacturers,  therefore,  would  have  to

temporarily register the vehicle under Section 43 of the Central Act.  Upon its

purchase, the customer would then register the vehicle finally under Section 39

of the Central Act.

13) The State of Bihar enacted Bihar Motor Vehicles Taxation Act in April

1994 at a time when the manufacturers also could continue in possession of

Tariff heading vehicles under a trade certificate.

14) After  the  amendment  of  1984,  the  facility  of  trade  certificate  to  a

manufacturer stands withdrawn.  The manufacturer undoubtedly can possess a

vehicle, which is in his factory as long as it is not used in any place contrary to

Section 39 of the Bihar Act.  The only manner in which a manufacturer can use

a  vehicle  is  the  manner  indicated  under  Section  39  without  obtaining  a

registration.   

15) Prior to the above-said amendment of the Central Act, a Division Bench

of the Patna High Court took the view that vehicles, which were in use, would

either  require  a  registration  certificate,  permanent  or  temporary,  or  would

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require a trade certificate.  A manufacturer who is required to obtain a trade

certificate  but  did not  do so,  would not  escape the net  of  tax by being the

beneficiary of his own wrong.

16) To complete the narrative, it would also be pertinent to mention that after

the  amendment  in  November,  1994,  as  noted  above,  when  the  Assessing

Authority sought to levy tax under Section 6 of the Bihar Act, this action was

challenged by the appellants by filing writ petitions in the High Court of Patna.

In those writ petitions, vires of Section 6 of the Bihar Act were also challenged.

The challenge was repelled by the High Court vide its judgment dated July 03,

1998,  with  the  leading  case  known  as  Tata Engineering  and  Locomotive

Company Ltd.  vs. State  of  Jharkhand1 (TELCO case).   This  judgment  has

attained finality as Special Leave Petition thereagainst was dismissed by this

Court.  After the aforesaid judgment, the District Transport Office, Jamshedpur

again confirmed the demand of tax under Section 6 of the Act vide his order

dated  July  05,  1999  in  the  case  of  the  appellant/TELCO.   This  order  was

confirmed by the Appellate Authority at Ranchi on December 18, 1999 as well

as by Revisional Authority by his order dated April 20, 2000.   Writ petitions

were filed challenging this order in the High Court which have been dismissed

vide impugned judgment dated September 24, 2002.  In appeal Nos. 5299-5304

of 2003 validity of the judgment is questioned. Civil Appeal Nos. 5299-5304 of

2003 arise out of this judgment.  

1 AIR 1999 Patna 62

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17) Civil Appeal Nos. 8-12 of 2004 are filed by a dealer who has paid the tax

under Section 6 of the Act as well, however, for delayed payment, penalty and

interest are imposed which were challenged by the said appellants in the High

Court  and the High Court  has  dismissed the case  of  the appellants  vide its

judgment dated July 22, 2003 following its judgment in TELCO case.

18) It is in this conspectus, this Court is to first determine the question of

liability of tax under Section 6 of the Bihar Act and in the event this tax is

upheld, question of penalty and interest would have to be determined.

19)  We  may  point  out  that  before  the  High  Court,  the  appellants  had

challenged the vires of Section 6 on the ground that the State Legislature lacks

competence to make a provision of this nature.  It was pointed out that Section

6 levies the tax on a manufacturer  or  a dealer  of motor vehicles merely on

‘possession’ thereof by such a manufacturer or a dealer.  It was argued that the

Bihar Act was enacted by the State Legislature under Entry 57 of List II (State

List) of the VIIth Schedule to the Constitution of India, which entry does not

empower the State Legislature to impose tax on vehicle merely on possession.

This entry reads as under:

"Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tram cars subject to the provisions of entry 35 of List III.”

20) The High Court, however, rejected this contention with the reason that

under this entry, taxes on vehicles which are suitable for use on roads can be

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imposed  and  it  was  undisputed  case  of  the  parties  that  the  vehicles

manufactured by the appellants are suitable for use on roads.  Therefore, the

provision which stipulates the manufacturer or a dealer of a motor vehicle, in

respect of the motor vehicle in his possession in the course of business as such a

manufacturer or dealer shall  pay tax, is within the legislative competence of

Entry 57.  This contention has been raised before us  as well.  However, we do

not agree with the appellants as the reasoning given by the High Court is the

correct analysis of Entry 57 of List II of VIIth Schedule to the Constitution.

21) Insofar as argument predicated on the amendment in the Motor Vehicles

Act (the Central Act), 1988 is concerned, we again find that the High Court has

rightly  concluded  that  this  amendment  would  have  no  relevance  to  the

provisions  contained  in  the  Bihar  Act.   Whether  the  definition  of  a  dealer

includes manufacturer or not would be immaterial inasmuch as under Section 6

of the Bihar Act, the Legislature has made provision to tax both the dealer as

well as the manufacturer.  We agree with the following observations of the High

Court in this behalf:

"7. ...It goes without saying also that 1994 Act has been enacted under and in terms of Entry 57 (supra) by the State Legislature; whereas 1988 Act has been enacted by the Union Parliament under and in terms of Entry 35 of the Concurrent List.  Also, whereas the Preamble to 1988 Acts states that the Act has been enacted to consolidate and amend the law relating to Motor Vehicles, the Preamble to 1994 Act states that this Act has been made with a view to regulate the imposition and levy of tax on Motor Vehicles in the State of Bihar (as it was at the relevant time). Both the Act, therefore, deal with two different fields of legislation and the areas of their operation are also different, having been enacted by two  different  classes  of  Legislatures,  one  in  terms  of  the  power exercisable and vested under clause (2) and the other in terms of the

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power vested and exercisable under clause (3) of  Article 246 of the Constitution.  Therefore, at the risk of repetition, we have no hesitation in saying that any change or alteration in one Act cannot be said to have any effect upon the other.”

22) We also agree with the respondents that the tax was in respect of motor

vehicles in possession of the manufacturer in the course of his business as a

manufacturer, or in possession of the dealer in the course of his business as a

dealer  under  the  authorization  of  trade  certificate  granted  under  the  Central

Motor Vehicle Rules, 1989.  The manufacturer comes in the possession of the

motor vehicle after the vehicle is manufactured and is suitable for use on roads.

The dealer in the course of his business of getting the Motor Vehicle from the

manufacturer and selling it to a customer comes in the possession of the Motor

Vehicle  on  the  basis  of  a  trade  certificate  granted  under  the  Central  Motor

Vehicle  Rules,  1989.   Neither  earlier  nor  now there  is  any obligations  in  a

manufacturer to obtain a trade certificate under the 1989 Rules for carrying on

the business of a manufacturer.   

23) It  is  pertinent  to  mention  that  a  challenge  to  the  constitutionality  of

Section 6 laid by the appellants in the earlier round of litigation, in regard to the

same Assessment Years, was repelled and constitutional validity of Section 6

was upheld in Telco case.  The High Court had in coming to such a conclusion,

referred to the judgment of this Court in Bolani Ores Ltd. v. State of Orissa2,

Travancore Tea Estates Co. Ltd. & Ors.  v. State of Kerala & Ors.3 and  M/s

2 (1974) 2 SCC 777 3 (1980) 3 SCC 619

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Central Coal Fields Ltd. v. State of Orissa & Ors.4.  Once Section 6 is held to

be valid, it is only the interpretation thereof which was to be gone into by the

High Court in this round, in order to find out whether the assessment orders

passed  in  respect  of  these  appeals  were  valid  or  not.   On  interpreting  this

provision, as observed earlier as well,  liability to pay tax under Section 6 is

linked with the incidence of manufacturer or the dealer possessing the vehicle

which is suitable for use on road during the the course of his business.

24) A half-hearted argument was also made by the appellants to the effect that

Section 6 uses the expression ‘in lieu of the rates specified in Schedule I’ and it

was argued that the tax which is to be paid is either as per Schedule I i.e. in

accordance with Section 5 of the Bihar Act or at the annual rates specified in

Schedule III.  It was emphasised that the words ‘in lieu of’ cannot be read as ‘in

addition to’.  However, there is no merit in this argument as well.  Sections 5

and 6 operate in altogether different contexts.  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.   We,  therefore,  are  of  the

opinion that 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.

4 1992 Supp. (3) SCC 133

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25) Insofar as imposition of penalty is concerned, it is as per the provisions of

Section 23 of the Act which mentions that for non-payment of tax under the

Act, penalty can be imposed.  The appellants have referred to the judgment of

this  Court  in  Hindustan  Steel  Ltd.  v.  State  of  Orissa5 which describes  the

nature of penalty as under:

"8.  Under the Act penalty may be imposed for failure to register as a dealer — Section 9(1) read with Section 25(1)(a)  of the Act.  But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will  not ordinarily be imposed unless the party obliged either acted  deliberately  in  defiance  of  law  or  was  guilty  of  conduct contumacious  or  dishonest,  or  acted  in  conscious  disregard  of  its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory  obligation  is  a  matter  of  discretion  of  the  authority  to  be exercised  judicially  and  on  a  consideration  of  all  the  relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the  Act  or  where  the  breach  flows  from a  bona  fide  belief  that  the offender  is  not  liable  to  act  in  the  manner  prescribed by the  statute. Those in charge of the affairs of the Company in failing to register the Company as  a dealer  acted in  the  honest  and genuine belief  that  the Company  was  not  a  dealer.  Granting  that  they  erred,  no  case  for imposing penalty was made out.”

26) It was argued that action of the appellants was  bona fide inasmuch as

when the  notices were received for  the first  time for  payment  of  tax  under

Section 6 of the Act, the same were challenged albeit the validity of Section 6

was upheld by the High Court.   Thereafter,  tax  was paid by the  appellants

though challenged again in the present round of litigation.  On that basis, it was

5 (1969) 2 SCC 627

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argued that action of the appellants was bona fide.   

27) In order to test this argument, we shall have to consider the provision

under which penalty can be imposed.  The provision in the Act is Section 23

and Rule 4 of the Taxation Rules provides for the rates of penalty.  Section 23

reads as under:

"Liability  to pay penalty for non-payment of tax in time.  - If  the tax payable in respect of a vehicle other than personalised vehicle has not been paid during prescribed period,  the person liable to pay such tax shall pay together with the arrears of tax, a penalty at the rates prescribed by the State Government.”

28) Rule 4, likewise, is to the following effect:

"4. Due date of payment and penalty for non-payment of taxes in time.— (1) For vehicles other than personalised vehicles the due date of payment of tax shall be the date of expiry of the period for which the tax has been last paid. In cases where no such tax had previously been paid, the date of acquisition of the vehicle or the date when such tax is imposed by law shall  be  due  date  for  tax  payment.  For  payment  of  differential  taxes under the provision of Section 8, the due date shall be within seven days from the date of alteration in the vehicle or the change in its use.

(2) Where the tax for any period in respect of a vehicle has not been paid as required under the provisions of sub-rule (1) and continues to remain unpaid thereafter, the taxing officer may impose penalty in respect of such vehicles at the rate specified in the table below:—

TABLE

Period Amount of penalty

(i)  If  paid  within  fifteen days from the due date of payment.

Nil. This will be treated as a grace period.

(ii)  If  paid  after  fifteen days but within 30 days of the due date of payment.

Penalty to be charged at the rate of 25 per cent, of the tax.

(iii)  If  paid  after  30  days Penalty to be charged at the rate of

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but within 60 days of the due date of payment.

50 per cent, of the taxes due.

(iv)  If  paid  after  60  days but within 90 days of due date of tax payment.

Penalty to be charged equal to the taxes due.

(v) If paid beyond 90 days after the due date.

Penalty to be charged will be twice the taxes due.

(3) Where the composite fee in respect of vehicles plying under National Permit Scheme has not been paid within the due date as required under the  provisions  of  the  said  Scheme,  the  Taxing  Officer  shall  impose penalty  at  the  rate  provided  in  the  said  Scheme,  in  respect  of  such vehicle.”   

29) 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. That argument was also repelled in

Telco case.  This position in law has attained finality.  At this stage, it would be

useful to refer to the judgment in State of U.P. & Ors.  v. Sukhpal Singh Bal6

wherein this Court held:

"15.  ...A penalty may be the subject-matter of a breach of statutory duty or it may be the subject-matter of a complaint. In ordinary parlance, the proceedings may cover penalties for avoidance of civil liabilities which do  not  constitute  offences  against  the  State.  This  distinction  is responsible for any enactment intended to protect public revenue...”

6 (2005) 7 SCC 615

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30) It is clear that under the Bihar Act, as per Section 23, penalties levied for

breach of statutory duty for non-payment of tax.   

31) In view of the aforesaid specific legal provisions, judgment in the case of

Hindustan Steel Ltd. referred to by the appellants will not be applicable in the

instant case.  It is also to be borne in mind that while upholding the validity of

Section 23 of the Act in Telco, 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.    Taking into consideration all these aspects, the High Court in the

impugned judgment dated July 22, 2003 in the case of M/s. R.K. Automotives

& Ors. (Civil  Appeal  Nos.  8-12 of 2004) has repelled the challenge against

imposition of penalty.  We agree with the aforesaid conclusion.   

32) As a result, all these appeals are dismissed.

.............................................J. (A.K. SIKRI)

.............................................J. (M.R. SHAH)

NEW DELHI; DECEMBER 14, 2018