The freedom of trade and commerce guaranteed by Article 301 of the Constitution is wider than that contained in Sec.297 of the Government of India Act, 1935, and it includes freedom from tax laws also.

Ramaswami, J.

1. In all these cases, which have been heard together a common question of law arises for determination, namely, whether the provisions of the Bihar Taxation on Passengers and Goods (carried by Public Service Motor Vehicles) Act, 1961 (Bihar Act XVII of 1961), are constitutionally valid and operative.

2. On the 30th March, 1950, the Bihar Legislature enacted the Bihar Finance Act, 1950, (Bihar Act XVII of 1950) by which a tax was levied on passengers and goods carried by public service motor vehicles in Bihar. The Act received the assent of the President on the 1st April, 1950. The validity of the Act was challenged by the petitioners in Title Suit No. 60 of 1951, which was instituted on the 5th May, 1951, in the Court of the 1st Subordinate Judge of Gaya. The petitioners prayed in that suit for a declaration that the provisions of Part III of the Bihar Finance Act, 1950 , were unconstitutional, and for a permanent injunction restraining the State of Bihar from levying and realising the tax. A similar suit was instituted, namely, Title Suit No. 47 of 1951, on behalf of passengers and owners of goods for similar reliefs. Both these title suits were transfer-ed to the Patna High Court for hearing, and on The 8th May, 1952, the title suits were dismissed by a Special Bench on the ground that the provisions of Part III of the Bihar Finance Act, 1950 , did not contravene Article 301 of the Constitution and the previous sanction of the President was not required for enacting such a law.

The petitioners presented an appeal to the Supreme Court against the judgment of the High Court, namely, Supreme Court Appeal No. 53 of 1952. On the 12th December, 1960, the Supreme Court allowed the appeal, holding that. Part III of the Bihar Finance Act, 1950 , violated the constitutional guarantee under Article 301 of the Constitution and the petitioners were entitled to a declaration to that effect and to a permanent injunction restraining the State of Bihar from charging or realising tax imposed under that Act. The judgment of the Supreme Court was based upon its previous decision in Atiabari Tea Co., Ltd. V/s. State of Assam, (1961) 1 SCR 809 : (AIR 1961 SC 232) where a similar point was dealt with. It was held by the Supreme Court that as the previous sanction of the President was not taken, as required under the proviso to Article 304 of the Constitution, the Act was ultra vires and invalid.

After the decision of the Supreme Court the Government of Bihar promulgated Bihar Ordinance No. 11 of 1961 on the 1st of August, 1961. The Ordinance was called the Bihar Taxation on Passengers and Goods (carried by Public Service Motor Vehicles) Ordinance, 1961. Sec.1, Sub-Section (3) of the Ordinance provides that "it shall be deemed to have come into force on the first day of April, 1950". The provisions of the Ordinance were subsequently incorporated in Bihar Act-XVII of 1961 which received the assent of the President on the 23rd September, 1961. It should be stated that the previous sanction of the President was obtained before Bihar Act XVII of 1961 was introduced in the Bihar Legislature.

3. It is necessary at this stage to set out the relevant provisions of the impugned statute. The title of the Act is "The Bihar Taxation on Passengers and Goods (carried by Public Service Motor Vehicles) Act, 1961." Sec.1, Sub-section (2) of the Act states that "it extends to the whole of the State of Bihar". Sec.1 (3) of the Act provides that "it shall be deemed to have come into force of the first day of April, 1950". Sec.3 imposes the charge and rate of tax and reads as follows :-

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"3. Charge and rate of tax. -- (1) On and from the date on which this Act is deemed to have come into force under Sub-section (3) of Sec.1, there shall be levied and paid to the State Government a tax on all passengers and goods carried by a public service motor vehicle; such tax shall be levied and paid at the rate of twelve and a half per centum of the fares a