Judgment

SABYASACHI MUKHARJI, J. :- These civil appeals and special leave petitions centre around one point, namely, the validity of the Bombay Motor Vehicles Tax Act, 1958 as amended by S. 3 of the Maharashtra Act, XIV of 1987 as well as S. 6 of the said Act as amended by Maharashtra Act XXXIII of 1987 as well as the Maharashtra Act IX of 1988.

2. The Bombay Motor Vehicles Tax Act, 1958 prior to its amendment in 1987 provided for levy of tax on vehicles annually or quarterly. In 1987, by S. 3 of the Maharashtra Act No. XIV of 1987, sub-section (1C) was added to provide for levy of one time tax at 15 times the annual rate on all motor cycles used or kept for use in the State. The said provisions further provided that in case of motor cycles used or kept for use by a company or other commercial organisation, the one time tax was to be levied at thrice the rate. Section 6 of the Maharashtra Act 14 of 1987, added sub-sec. (6) to S. 9 of the principal Act. The new sub-sec. (6) enabled a registered owner of motor cycle or tricycle to obtain refund of "one time tax" in cases where (a) the vehicle is removed outside the State, and (b) the registration of vehicle is cancelled due to scrapping of the vehicle, or for a similar reason. The refund was to be paid in accordance with the Fourth Schedule. The Thrird and Fourth Schedules were introduced by the Maharashtra Act 14 of 1987.

3. In the case of Luna Mopeds, the one time tax comes to Rs. 2925/- which according to the petitioners in the S.L.P. Nos. 11673-75/87, is 86% of the ex-factory price of the Moped. In that view the petitions were filed by the respondents in the first batch of appeals and the petitioners in the second batch challenging the amended provisions of the Bombay Motor Vehicles Tax Act, 1958. On or about 9/10th July, 1987, a Division Bench of the Bombay High Court, Nagpur Bench held that the levy of one time tax was beyond the legislative competence of the State Legislature and also beyond Entry 57 of List II of the Seventh Schedule. It further held that the provision for imposition of levy at thrice the rates, so far as the vehicles owned by the firm or the company, were neither discriminatory nor arbitrary. The High Court, however, in view of the fact that the refund was restricted to the circumstances mentioned above, struck down Act 14 of 1987. According to the High Court, the absence of provisions for refund in cases of temporary non-user made the Maharashtra Act XIV of 1987, confiscatory in character and not regulatory or compensatory which alone was in the competence of the State Legislature. The State preferred applications for leave to appeal against the impugned judgment and the special leave having been granted, are the subject-matter of Civil Appeals Nos. 1631-33/87. The petitioners also filed special leave applications which are the subject-matter of Special Leave Petitions Nos. 11673-75/87 which have been heard along with these appeals. While the States appeal against the High Courts judgment was pending before this Court, the Maharashtra Legislature enacted Maharashtra Act XXXIII of 1987. It deleted S. 3(4) of the principal Act, as amended by Maharashtra Act XIV of 1987. That provision made the existing provisions of refund for temporary non-user inapplicable in cases of motor cycles and tricycles, restricting the right of refund to S. 9(6) in contingencies mentioned above. It also introduced sub-sec. (7) to S. 9 conferring right of refund in respect of motor cycles and tricycles in accordance with the rates specified in the Fifth Schedule and prescribed the rates of refund in the Fifth Schedule. But the said Schedule did not prescribe a separate rate of refund for company-owned vehicles. Therefore, the refund in respect of company-owned vehicles, would be same as that payable to individual-owned vehicles, even though the tax paid on former class of vehicles was three times. Soon thereafter the Maharashtra Legislature enacted Act 9 of 1868. The only relevant