Judgment

CHINNAPPA REDDY, J.:- Prior to 1969 there was no concept of what may be termed as An All India permit which would be valid for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India. S. 63 (1) of the Motor Vehicles Act, provides that, export as may be otherwise prescribed a permit granted by the regional transport authority of any one region shall not be valid in any other region unless the permit has been counter-signed by the regional transport authority of that other region and a permit granted in any one State shall not be valid in any other State unless counter-signed by the State Transport Authority of that other State or by the regional transport authority concerned. The procedure prescribed for obtaining the counter-signature of the transport authorities of other regions and States was cumbersome and was not conducive to the development of all India or inter-State tourist traffic. In order to remedy the situation and promote all India and inter-State tourist traffic, the Parliament amended the Motor Vehicles Act and introduced Section 63 (7) by amending Act 56 of 1969. This new provision enables the State Transport Authority of every State to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that State specify in that behalf. Preference is to be given, to applications for permits from the India Tourism Development Corporation, a State Tourism Development Corporation, a State Tourist Department and such operators and tourist cars or such travel agents as may be approved in that behalf by the Central Government. This was but the first basic step towards encouraging all India or inter-State tourist traffic there were other hurdles to be cleared before any scheme for grant of all India Permits could be effectively implemented. One of the hurdles was this. Under Entry 57 of List II of the Seventh Schedule to the Constitution the State Legislature is empowered 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". Entry 35 of List III reads: "Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied." A coherent reading of Entry 57 of List II and Entry 35 of List III makes it abundantly clear that the power to levy taxes on vehicles suitable for use on vests solely in the State. Legislature though it may be oven to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles. In other words the Parliament may lay down the guidelines for the levy of taxes on mechanically propelled vehicles but the right to levy such taxes vests solely in the State Legislature. Now there are twenty-two States and nine Union Territories in India specified in the first Schedule to the Constitution. Each of the States has the right. within its territory to levy a tax on motor vehicles. If a tourist-vehicle holding an All India permit under S. 63 (7) of the Motor Vehicles Act chooses to visit half a dozen States in the course of a round trip from, say, Delhi to Kanyakumari or Srinagar to Hyderabad tax will ordinarily have to be paid in all the half a dozen or so States. The burden will surely be intolerable and the whole object of Section. 63 (7), namely promotion of all India or inter-State tourist traffic will be frustrated. The Central Government was alive to the problem and referred the matter to the Transport Development Council for its advice. The Transport Development Council is a non-statutory body constituted by the Central Government and consists of the representatives of the Government of all the States. The Transport Advisory Council advised the Central Government that there should be a single-State taxation on tourist vehicles holding permits under S. 63 (7), that is, tax sho