Applicability of Schedule VII, List II, Entry 56.

These petitions filed under Article 226 of the Constitution pray for the issue of writs of mandamus or other appropriate writs, directions or orders directing the respondent, the State of Madras, to forbear from enforcing the provisions of the Madras Motor Vehicles (Taxation of Passengers and Goods) Act, 1952 (Act XVI of 1952) or the rules framed thereunder against the several petitioners. A common question of law arises in all these petitions concerning the legality and constitutional validity of the said Act (which will be hereafter referred to as the Act.) The petitioners carry on the business of motor transport in different areas in the State. They are governed by the provisions of the Motor Vehicles Act, 1939. In respect of the motor vehicles employed in the business of the petitioners and which ply for hire they are subject to the tax levied under the Madras Motor Vehicles Taxation Act (Madras Act III of 1931). The vehicles run under permits issued under the Motor Vehicles Act, 1939, subject to the conditions imposed under the licences and by the other provisions of the Motor Vehicles Act. Section 43-1(ii) empowers the Government of the State to fix minimum or maximum fares or freights for stage carriages and public carriers to be applicable throughout the State or within any area or on any route within the State. It is common ground that the Government of Madras have fixed, the maximum fares in respect of the areas in which the several petitioners carry on the business of motor transport. The rates vary between urban areas and rural areas, between ghat roads and roads on the plains. We are not concerned however with these fares in these petitions.

The material provisions of the impugned Act (Madras Act XVI of 1952) are as follows: Section 3 which is the charging section runs thus:

“Levy of tax on passengers and goods.-From and after the commencement of this Act, there shall be levied and paid to the Government, a tax on all passengers, luggage and goods carried by stage carriages, and on all goods transported by public carrier vehicles, at the rate of nine pies in the rupee on the fares and freights payable to the operators of such stage carriages and at the rate of six pies in the rupee on the freights payable to the operators of such public carrier vehicles:

Provided that the fare charged by an operator inclusive of the tax leviable under this section shall not exceed the maximum fare prescribed by the Government under the Motor Vehicles Act, 1939, and in force at the commencement of this Act:

Provided further that no tax shall be levied on any passenger, luggage or goods carried in a stage carriage, the total permitted daily mileage of which does not exceed fifty miles.”

Section 4 provides for composition of the tax on application by the operator. Section 5 makes it incumbent on the operator to submit returns in the prescribed form, and section 7 prescribes the procedure to be followed where no returns have been submitted, or the returns submitted are found to be incorrect or incomplete. Section 8 deals with fares and freights which have escaped assessment. Section 9 prescribes the penalties far non-payment of tax, and section 10 lays down the mode of recovery of the tax. Section 16 confers power on the Government to make rules to carry out the purpose of the Act, and, in particular, to provide for the matters specified in clauses (a) to (g) of sub-section (2) of that section. The other provisions of the Act are not material.

The two main grounds on which the validity of the Act is assailed are (1) that it is beyond the legislative competence of the Madras State Legislature and (2) that it infringes the fundamental rights conferred on every citizen under Article 19 (1)(g) of the Constitution.

Mr. M.K. Nambiar who addressed to us the leading arguments developed the first ground by characterising the impugned Act as a colourable piece of legislation in the sense that by the Act the State Legislature was real