Judgment

RAY, C. J. :- These matters raise questions on the validity of legislative measures of levy and collection of tax on passengers and goods carried by stage carriages and public carrier vehicles. Stage carriages carry passengers and public carriers carry goods. The validity of the Kerala Motor Vehicles (Taxation of Passengers and Goods Amendment) Act, 1970 for the sake of brevity called Act 18 of 1971 as well as the Motor Vehicles (Kerala Third Amendment) Act, 1971 for the sake of brevity called Act 34 of 1971 is challenged.

2. The petitioners in the writ petitions and the appellants in Civil Appeals are operators of stage carriages in the State of Kerala.

3. The question which fall for consideration in these matters are these. First, does Act 18 of 1971 levy a tax on the income of operators? Second, is the retrospective validation of levy and collection of taxes by Act 18 of 1971 legal? Third, is it competent to the legislature to amend S.43 of the Motor Vehicles Act, 1939 called the 1939 Act by Act 34 of 1971 to include retrospectively tax within fare.

4. Section 43 of the 1939 Act lays down that the State Government may, from time to time by notification in the Official Gazette, issue directions to the State Transport Authority regarding fixing of fares and freights for stage carriages, contract carriages and public carriages. Section 44 (3) of the 1939 Act requires the State Transport Authority to give effect to such directions issued by the Government. It is in exercise of these powers that the fare structure for stage carriages is fixed from time to time.

5. The State of Kerala came into existence with effect from 1 November, 1956 by the Reorganisation of States comprising the Malabar area of the former Madras State and the Travancore-Cochin area. The fare structure in force in the Malabar area as on 1 November, 1956 was 3.90 nP per mile and the minimum fare was 31 nP for distances less than 8 miles. The fare structure in Travancore-Cochin area prior to 1 November, 1956 was 3.90 nP per mile and the minimum was 19 nP. There was difference only in the minimum fare between Malabar and Travancore-Cochin areas.

6. In 1958 the difference between the minimum fare of the two was eliminated. The Kerala Government on 15 April, 1958 increased the rate of fare to 4 nP per mile and the minimum fare was 16 nP.

7. Prior to 1 July, 1963 there was no provision for the levy of tax on passengers and goods in the Travancore-Cochin area. In the Malabar area the Madras Motor Vehicles (Taxation of Passengers and Goods) Act 1952 was in force over and above the Madras Motor Vehicles Taxation Act. In the Travancore-Cochin Vehicles Taxation Act 14 of 1950. The incidence of tax on stage carriages and public goods carriages was the same after the formation of the Kerala State in 1956. In the Malabar area a tax of Rs.25/- per seat per quarter was levied under the Motor Vehicles Taxation Act and a compounded rate of Rs.12.50 per seat per quarter under the Motor Vehicles (Taxation of Passengers and Goods) Act. the aggregate of the two taxes in the Malabar area was Rs.37.50 per seat per quarter in respect of stage carriages. In the Travancore-Cochin area the rate of vehicles tax under the Vehicles Taxation Act was Rs.37.50 per seat per quarter equal to the total incidence of tax in the Malabar area for stage carriages.

8. The fare structure throughout the Kerala State after 1958 was 4 nP per mile and the minimum was 16 nP. In 1961 the Government of Kerala continued the fare at 4 nP per mile but reduced the minimum from 16 nP to 10 nP.

9. In this background, the Government of Kerala on consideration of proposals made by the Transport Commissioner decided in the month of February, 1963 first to increase the motor vehicles tax throughout the State; second, to introduce tax on passengers and goods throughout the State; and, third to increase the fare structure suitably for stage carriages. The incidence of tax at Rs.37.50 per seat per quarter prevalent in the