Father's Tax Arrears Cannot Bar Son's Bus Permit Application, Rules Chhattisgarh High Court

The High Court of Chhattisgarh at Bilaspur set aside the rejection of an inter-state bus permit where the sole ground was the applicant's father's alleged unpaid tax dues of Rs.28 lakh, holding the refusal violative of Article 19(1)(g) of the Constitution of India.

A 30-year-old bus operator from Ambikapur in Chhattisgarh's Sarguja district won the right to operate on the Ambikapur–Bokaro inter-state route after the State Transport Authority and the State Transport Appellate Tribunal refused him a permit solely because his father, Lakhpati Singh, allegedly owed Rs.28 lakh in tax dues to the Regional Transport Office, Raipur. Justice Amitendra Kishore Prasad, sitting singly, found no provision in the Motor Vehicles Act, 1988 that disentitles an individual applicant because of a family member's tax liability, and held that imposing such a condition without a statutory basis constitutes an unreasonable restriction on the fundamental right to carry on a trade or business under Article 19(1)(g).

The Permit Application and Its Rejection

Abhinandan Singh applied to the State Transport Authority, Chhattisgarh (STA) for an inter-state permanent stage carriage permit to ply his vehicle on the Ambikapur to Bokaro (Jharkhand) route via Kunkuri, Jashpur, Ranchi, Ramgarh, Gola, Petarwar, and Jainamod. The STA invited objections, and existing bus operators raised several grounds — alleged timing clashes and other concerns. The STA rejected all objections raised by those operators except one: that the petitioner's father had unpaid tax dues of Rs.28 lakh owed to the RTO, Raipur.

On that single remaining ground, the STA passed its order dated 18 January 2024, refusing the permit. The petitioner was not himself alleged to have any personal tax arrears.

Aggrieved, the petitioner appealed to the State Transport Appellate Tribunal (STAT), Raipur. He argued that no tax dues were actually outstanding against his father, who had in fact overpaid taxes and sought refund or adjustment. The father had separately filed WPC No. 3676 of 2024 before the High Court of Chhattisgarh, and on 24 July 2024, that Court directed the concerned authority to consider the father's claim of refund and excess tax adjustment and pass appropriate orders.

The STAT was unmoved. Relying on an order of the High Court of Madhya Pradesh in Ramsewak Sharma v. State and Others, the tribunal dismissed the appeal on 2 July 2024, affirming the STA's refusal. Abhinandan Singh then filed WPC No. 4432 of 2024 before the High Court of Chhattisgarh.

The Legal Question

Justice Amitendra Kishore Prasad framed the issue precisely: whether an application for grant of an inter-state permanent stage carriage permit can be denied solely because tax dues payable by the applicant's father have not been cleared.

Counsel for the petitioner, Mr. BL Dembra, submitted that the Motor Vehicles Act, 1988 and the rules framed thereunder contain no provision prohibiting an individual bus operator from seeking a permit on account of a family member's liabilities. The permit, he argued, is sought in an individual capacity. He placed reliance on a judgment of the Patna High Court in Krishna Kumar Jha v. State of Bihar and Others, reported in 2024 Supreme (Pat) 99, where that Court had held that renewal of a licence cannot be refused on the ground that amounts are payable to a third party.

The State, through panel lawyer Mr. Soumitra Kesharwani, defended the refusal. He submitted that the STA rightly considered the Rs.28 lakh tax arrears attributable to the father and that no documentary evidence had been placed before the STAT to show the liability had been satisfied or adjusted.

How the Court Reasoned

Justice Prasad began with Article 19(1)(g) of the Constitution, which guarantees all citizens the fundamental right to practise any profession or carry on any occupation, trade, or business. Read with Article 19(6), such a right can only be restricted by a duly enacted law imposing reasonable restrictions in the interest of the general public. No mere administrative practice or inference, without a statutory footing, can cut down that right.

Turning to the Motor Vehicles Act, 1988, the Court found no provision that disentitles a permit applicant because a family member has outstanding tax dues — provided the applicant himself has no personal arrears and the other objections have already been rejected. The STA had, in fact, rejected every other ground raised by the rival operators. The family-member-tax-dues ground was the sole surviving reason for refusal, and it found no home in the statute.

The Court drew on the Supreme Court's decision in Mithilesh Garg and Others v. Union of India and Others, reported in (1992) 1 SCC 168, where the Court reaffirmed that carrying on motor transport business is a guaranteed right of every citizen, and only the State, acting through legislation, can impose reasonable restrictions under Article 19(6). The Patna High Court in Krishna Kumar Jha had applied that principle specifically to permit and renewal proceedings, holding that transport authorities are governed by the Motor Vehicles Act and the rules thereunder, and those instruments contain nothing that allows refusal on the ground that amounts are owed to a third party.

Justice Prasad held that the analogy that tax dues owed by one family member can be attributed to another is “legally unsustainable and violative of Article 19(1)(g).” A default by an individual family member cannot disentitle another from obtaining a permit. Such an adverse inference amounts to penalising one person for the alleged default of another — an unreasonable restriction with no statutory warrant.

On the father's separate litigation, the Court noted that Lakhpati Singh had actually approached the High Court on the basis that he had overpaid taxes, not that he owed them, and the Court had directed the authority to consider his refund claim. Whether or not that proceeding had been resolved, the position in law remained the same: the son's permit application had to be assessed on its own merits, against the petitioner's personal eligibility under the Act, not his father's disputed tax account.

The Court also addressed the jurisdictional threshold for intervention under Article 226. Where the decision-making process itself is vitiated by being contrary to law — here, applying a non-existent statutory ground — judicial intervention is warranted.

Order

Justice Amitendra Kishore Prasad allowed the writ petition. The orders of both the STAT dated 2 July 2024 and the STA dated 18 January 2024 were set aside. The State Transport Authority, Chhattisgarh, Raipur was directed to issue an inter-state permanent stage carriage permit in favour of Abhinandan Singh for the Ambikapur–Bokaro route, provided there is no other legal impediment.