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SUPREME COURT OF INDIA
A.P. SEN AND E.S. VENKATARAMIAH, JJ.
The Malwa Bus Service (Pvt.) Ltd., etc., Petitioners
Versus
State of Punjab and others, Respondents.
Writ Petitions Nos. 2617, 3837, 3973-3981, 3982-3998, 3962-3972, 4011-4015, 4016-4019, 4054-4058, 4136-4143, 4148, 4216, 4217, 4219-4226, 4287-4291, 4317-4321, 4408, 4542, 3518-3529, 3739-42, 4365-81, 8997-9017 and 9639-50 of 1982, D/- 28-4-1983.
Advocates appeared
Mr. Mohan Pandey, Advocate, for petitioners in W. P. Nos. 3974-81, 3962-72, 4011-15, 4016-19, 4136-43, 4287-91, 4365-81, 9639-50, 3518-29 and 3739-42 of 1982. Mr. Shanti Bhushan, Sr. Advocate, Mr. Baldev Kapoor and Mohan Pandey, Advocates with him for petitioner in W. P. No. 3973 of 1982. M/s. Baldev Kapoor and Mohan Pandey, Advocates, for petitioner in W. P. No. 3973 of 1982. M/s. Baldev Kapoor and Mohan Pandey, Advocates, forpetitioner in W. P. No. 3982-98 of 1982. Dr. Y. S. Chitale, Sr. Advocate, Mr. Mohan Pandey, Advocate with him for Petitioner in W. P. No. 2617 of 1982. Mr. A. K. Goel, Advocate, for petitioner in W. P. No. 3837/82. Mr. Arvind Minocha, Advocate for petitioner in W. P. No. 4054-58/82. Mr. S. K. Bagga, Advocate, for petitioner in W. P. No. 4148/82. Mr. Vimal Dave, Advocate, for petitioner in W. P. Nos. 4216 and 4271/82. Mr. Sarva Mitter, Advocate for petitioner in W. P. Nos. 4219-26 and 4317-21/83. Mr. R. C. Kohli, Advocate, for petitioner in W. P. No. 4408/82. Mr. L. N. Sinha, Attorney General, Mr. D. D. Sharma and Mr. P. P. Singh, Advocates with him for Respondents in all W. Ps.
Constitution of India, 1950 - Article 14, 19(1)(g), 32 and 304 (b) - Punjab Passengers and Goods Taxation Act, 1952 - Punjab Motor Vehicles Taxation Act, 1924 - Section 3 - Punjab Motor Vehicles Taxation (Amendment) Act, 1981 - Motor Vehicles Act, 1939 - Central Act - Punjab Passengers and Goods Taxation Act, 1952 - Motor vehicles - Levy taxes on goods – Challenged - Petitioners are owners of motor vehicles and are carrying on business of running stage carriages in State of Punjab - While operation of stage carriage services run by petitioners is controlled by provisions of the Motor Vehicles Act, 1939, which is a Central Act, they are liable to pay taxes on motor vehicles owned by them under the Act - Act is a pre-Constitutional one - After Constitution came into force, power to levy taxes on goods and passegers carried by road or on inland waterways and power to levy taxes on vehicles, whether mechanically propelled or not suitable for use on roads including tramcars, subject to provisions of Entry 35 of List III of Seventh Schedule to Constitution are assigned to States respectively by Entries 56 and 57 of List II of the Seventh Schedule to Constitution - Petitioners inter alia contend that levy of tax of Rs. 500/- per seat imposed by the impugned Notification is violative of Art. 14, Art. 19(1)(g) and Art. 304 (b) of Constitution - Held, It is one of duties of a modern legislature to utilise measures of taxation introduced by it for purpose of achieving maximum social goods and one has to trust wisdom of legislature in this regard - Unless fiscal law in question is manifestly discriminatory Court should refrain from striking it down on ground of discrimination - These are some of broad principles laid down by this Court in several of its decisions and it is unnecessary to burden this judgment with citations - It was lastly urged that levy is almost confiscatory in character and the petitioners would have to close down their business as stage carriage operators - It is stated that passenger fares were permitted to be raised by about 43 per cent just before levy was increased in this case and it is even now open to the operators to move State Government to increase rates if they feel that there is a case for doing so - But on facts and in circumstances of the case, Court feel that it is not possible to hold that impugned levy imposes an unreasonable restriction on freedom of petitioners to carry on business - It cannot also be said that merely because a business becomes uneconomical as a consequence of a new levy, new levy would amount to an unreasonable restriction on fundamental right to carry on said business - It is however, open to State Government to make any modifications in fares if it feels that there is a need to do so - But impugned levy cannot be struck down on ground that operation of stage carriages has become uneconomical after introduction of the impugned levy - In the result these petitions fail and they are dismissed.
Judgment
VENKATARAMIAN, J. :- In these writ petitions filed under Art. 32 of the Constitution, the petitioners have challenged the constitutional validity of Section 3 of the Punjab Motor Vehicles Taxation Act, 1924 (Act No. 4 of 1924) (hereinafter referred to as "the Act") as amended by the Punjab Motor Vehicles Taxation (Amendment) Act, 1981 (Punjab Act No. 13 of 1981) and the Notification dated March 19, 1981 issued by the Government of the State of Punjab under Section 3 (1) of the Act.
2. The petitioners are owners of motor vehicles and are carrying on the business of running stage carriages in the State of Punjab. While the operation of the stage carriage services run by the petitioners is controlled by the provisions of the Motor Vehicles Act, 1939, which is a Central Act, they are liable to pay taxes on the motor vehicles owned by them under the Act. The Act is a pre-Constitutional one. After the Constitution came into force, the power to levy taxes on goods and passegers carried by road or on inland waterways and the power to levy taxes on vehicles, whether mechanically propelled or not suitable for use on roads including tramcars, subject to the provisions of Entry 35 of List III of the Seventh Schedule to the Constitution are assigned to the States respectively by Entries 56 and 57 of List II of the Seventh Schedule to the Constitution. While the Act is traceable to Entry 57, the Punjab Passengers and Goods Taxation Act, 1952 is enacted by the State Legislature in exercise of its legislative power granted under Entry 56. Before the commencement of the Constitution, S. 3 (1) of the Act which is the charging section reads as follows :
"3. (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, first day of July, first day of October and the first day of January at the rate specified in the schedule to this Act."
3. The above provision was amended in 1954 by providing that the rates of tax levied under the Act were those specified by the State Government in a Notification to be issued by it, subject however to the maximum limit fixed by the Act, instead of the rates of tax specified by the State Legislature itself in the Schedule to the Act. After that amendment, Section 3(1) read thus :
"3 (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, first day of July, first day of October, and the first day of January at such rates not exceeding Rs. 2200/- per vehicle for a period of one year as the State Government may by notification direct." (Emphasis added)
4. The maximum limit of Rs. 2200/- mentioned in Section 3(1) was increased by successive legislative amendments to Rupees 2750/- in 1963, to Rs. 4,200/- in 1965, to Rupees 10,000/- in 1970 and to Rs. 20,000/- in 1978. In exercise of the power conferred on it, the State Government fixed the rate of tax in the case of stage carriages at Rs. 75/- per seat in 1965, at Rs. 100/- per seat in 1970 and at Rs. 200/- per seat in 1974, subject to the maximum prescribed by the Act. On March 31, 1978, the State Government issued a Notification providing that on and after April 1, 1978, every stage carriage plying in the State of Punjab should pay tax at Rs. 275/- per seat where it operated up to 125 kilometers a day and Rs. 300/- per seat where it operated for more than 125 kilometers subject to a maximum of Rs. 20,000/- per year in both the cases. Then came the Amending Act in 1981 by which the maximum limit prescribed in S. 3(1) of the Act was raised to Rs. 35,000/- retrospectively with effect from October 1, 1980. Section 3 of the Amending Act inserted a new section in the Act being Section 3-A of the Act which authorised the State Government to issue a Notification under Section 3 (1) raising the rates of tax retrospectively with effect from October 1, 1980. After the amendment in 1981, Section 3 (1) of the Act reads thus :
"3 (1) A
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