JUDGMENT

R.M. SAHAI, J.- These appeals are directed against judgment and order of the High Court of Bombay. The appellants are either contractors or dealers of motor vehicles who have purchased vehicles from outside the State and have brought them into the State of Maharashtra. They are aggrieved by levy of entry tax on such motor vehicles under Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987. They challenged it by way of writ petitions in the High Court. It was claimed that the levy was colourable exercise of the legislative power of the State as Entry 52 of List II of Seventh Schedule of the Constitution of India did not permit imposition of such tax. It was also urged that the legislation impeded freedom of the appellants under Article 301 of the Constitution. Another ground of challenge was that the imposition was double burden on the appellants and in absence of any rational nexus between the levy of tax and the constitutional objective it was violative of Articles 14 and 286 of the Constitution of India. The High Court did not find any merit in any of these submissions and held that the impugned Act was a valid piece of legislation as various entries in the Seventh Schedule were merely fields and not the powers of the legislation. It was held that the submission that the entry tax being leviable in the local area it could have been levied on movement of goods from one local area to another local area in the State only and not to more than one local area covering the entire State was devoid of any merit. The High Court did not find that the provision violated the constitutional guarantee under Article 301 or there was any double taxation involved in it.

2. In this Court the levy was challenged basically for two reasons-one, that the incidence of tax being on the purchase value of the motor vehicle it was in the nature of a purchase tax. Further local area having a connotation of its own and being understood as an area which was administered by a local authority, the tax on entry of the vehicle in the State as such was bad for being vague and contrary to the concept of the local area as understood. It was also urged that it being in addition to the tax levied and collected as octroi by a Municipal Corporation or other local authorities was violative of Article 286 of the Constitution.

3. To comprehend the nature of levy it is necessary to extract the objects and reasons appended to the ordinance which brought out clearly the reason for the legislation:

"From 1984 onwards some States and the Union Territories adjoining the State of Maharashtra have reduced the rate of sales tax on motor vehicles and chassis substantially. Such reduction in tax rates by the neighbouring States have resulted in diversion of trade to those area sand the manufacturers of motor vehicles in Maharashtra, for want of market, had to resort to branch transfers to these areas and cater to the needs of consumers in Maharashtra, from those areas. This resulted in the avoidable loss of legitimate sales tax revenue to a large extent by the State of Maharashtra. With a view to compensate such loss of legitimate revenue, the State Government has decided to levy with immediate effect to tax on entry of motor vehicles purchased outside the State and brought in the local areas of the State for use or sale."

A very perusal of these objects and reasons would indicate that this legislation was brought in order to avoid payment of the sales tax or purchase tax on the vehicle payable in the State by purchasing it in another State where the rate was lesser than the State of Maharashtra and then to bring the vehicle inside the State. The legislature, therefore, clearly intended to avoid any loss of legitimate sales tax revenue by the State. But the levy cannot be held to be bad because the legislature intended to avoid any loss of sales tax in the State so long it is not found to be invalid either because of any constitutional or statutory violation