2002 Supreme(AP) 1260

Andhra Pradesh High Court
Judges : S.ANANDA REDDY, S.R.NAYAK
A.Aruna - Appellant
Versus
State OF A.P., Transport (Randb) Department - Respondent
Decided On : 11-01-02

Headnote:

Civil Matter – Civil Law - Motor vehicles Taxation (Amendment) Act, 1992 - Motor Vehicles Taxation (Amendment) Act, 1995 - Andhra Pradesh motor Vehicles (Taxation of Passengers and goods) Act, 1952 - Madras Motor Vehicle s (Taxation of Passengers and Goods) Act, 1952 - section 18 - Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act, 1931 - motor Vehicles Taxation Act, 1955 – Accident - Death - Contentions raised in affidavits filed in support of writ petitions while assailing constitutionality of amendment Acts - Impugned provisions are volatile of Articles 14 and 19 (l) (g) of Constitution; (2) impugned Amendment Acts are beyond legislative competence of Andhra Pradesh State Legislature - Life tax ceased to be compensatory and, therefore, unconstitutional - Since motor vehicle tax is a compensatory tax, basis of tax ought to be either weight of vehicle or its seating capacity or mileage travel and, therefore, imposition of different rates of tax depending upon make of vehicle or whether it is imported vehicle or locally made vehicle or on basis of value of vehicle is ex facie illegal and invalid - Levy of substantial amounts of tax which is nearlv 20 times and more of annual tax in respect of four wheelers on a compulsory basis would result in motor Vehicle Tax ceasing to be regulatory and compensatory and would, therefore, fall outside legislative competence of state legislature - Classification of four wheelers of same un laden weight on basis of cost of vehicle does not satisfy two tests viz.- that classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of group that, differentia must have a rationale relation to object sought to be achieved by statute in question and, therefore, classification made by impugned amendments cannot be sustained and they attract wrath of Article 14 postulates; (7) as per scheme of Act, liability to pay tax arises under Section 3 and can be paid either quarterly or half yearly or annually as provided under Section 4 - Therefore, impugned provisions are inconsistent with scheme of levy of tax under Section 3 of Act; (8) levy of different amounts of taxes on basis of value of vehicle is ex facie discriminatory and such levy would not be compensatory in nature and, therefore, it amounts to levy on ownership of vehicle - Learned counsel for petitioners meekly reiterated most of contentions raised in writ affidavits, one contention that was put forth before us by learned counsel for petitioners with force is that since impugned amendments provide for computation of life tax in respect of four wheelers on basis of cost of vehicles, life tax ceased to be a compensatory and regulatory tax and it tant amounts to taxing on ownership of vehicle and such a power is not available to Andhra Pradesh State Legislature - Learned counsel for petitioners contended that before Amendment and Amendment Act 23 of 1995, only un laden weight was basis for computation of tax, but after impugned amendments, both un laden weight and cost of vehicles are basis for determination of tax and this departure made by Andhra Pradesh State legislature by enacting impugned amendments has no constitutional sanctity - Learned counsel also contended that in case of old vehicles, even after impugned amendments, tax is levied on basis of un laden weight whereas in case of new vehicles covered by Item No. 1 of iii Schedule of Act, tax is levied on basis of un laden weight as well as cost of vehicles and this differential treatment meted out to owners of new vehicles tant amounts to an invidious discrimination – Held, Court does well not to impose too rigorous a standard of scrutiny lest all local fiscal schemes become subjects of criticism under equal protection clause - It needs to be noticed that subject of a tax is different from measure of levy - Measure of tax is not determinative of its essential character or of competence of Legislature – Life tax liable under impugned provision is a measure of levy and not subject of tax - Although, generally speaking, discrimination ground is available to attack validity of a law on basis of Article 14, Constitutional Courts have repeatedly held and reiterated that having regard to wide variety of diverse economic criteria that go into formulation of a fiscal policy legislature enjoys a wide latitude in matter of selection of persons, subject matter, events or methods of taxation etc - Tests of vice of discrimination in a taxing law are, accordingly, less rigorous - In federation of Hotel and Restaurant Association v. Union of India (31 supra), Constitution bench held that in examining allegations of a hostile, discriminatory treatment what is looked into is not its phraseology, but real effect of its provisions - Court held A legislature does not, as an old saying goes, have to tax everything in order to be able to tax something - If there is equality and uniformity within each group, law would not be discriminatory - Decisions of this Court on matter have permitted legislatures to exercise an extremely wide discretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes. "entry 57 of List II does not specify any base for taxation - If more than one could be a basis, Legislature has discretion and latitude to choose any one of permissible/available basis - It cannot be said motor vehicle tax should be levied always on basis of un laden weight and it cannot be on any other basis. To same effect, is judgment of Division Bench of Karnataka High Court in Gajanan Motor transport Co. Ltd. v. State of Karnataka52 with which we are in respectful agreement - Court do not find any substance in any of contentions raised by learned counsel for petitioners while assailing constitutional validity of impugned provisions - In result, court hold that Act, 1995 and Act 1992 are constitutionally valid - Consequently, court dismiss all writ petitions with no order as to costs - Entertaining these writ petitions, Court had granted interim orders directing registration of vehicles subject to petitioners paying 50% of life tax - writ petitions, petitioners are liable to pay balance of life tax - We grant a months time to petitioners to pay balance life tax, if not already paid – Appeal Dismissed.