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Issues Involved:
1. Vires of Sec. 3(3) of the Haryana Passengers and Goods Taxation Act. 2. Legislative competence of the State Legislature to levy taxes on passengers and goods carried on National Highways. 3. Nature of the tax under Entry 56 of List II. 4. Violation of Art. 301 of the Constitution. 5. Additional issues raised in the context of Uttar Pradesh and Bihar Motor Vehicles Taxation Acts. 6. Alleged violation of Art. 14 of the Constitution. Issue-wise Detailed Analysis: 1. Vires of Sec. 3(3) of the Haryana Passengers and Goods Taxation Act: The appellants, transport operators, challenged the vires of Sec. 3(3) of the Haryana Passengers and Goods Taxation Act, 1952, which levied a tax on passengers and goods carried by motor vehicles on a joint route partly within and partly outside the State of Haryana. The High Court upheld the validity of Sec. 3(3), and the Supreme Court agreed, dismissing the appeals. 2. Legislative Competence of the State Legislature: The appellants argued that only Parliament had exclusive jurisdiction to legislate on National Highways under Entry 23 read with Entry 97 of List I of the Seventh Schedule to the Constitution. They contended that Entry 56 of List II, which empowers the levy of taxes on goods and passengers carried by road, was limited to roads maintained by the State Government and not National Highways maintained by the Union Government. The Court rejected this argument, stating that Entry 56 of List II does not exclude National Highways and that taxes on passengers and goods carried on National Highways fall within Entry 56 of List II. 3. Nature of the Tax under Entry 56 of List II: The appellants contended that the tax under Entry 56 of List II should be of a regulatory and compensatory nature. The Court agreed that the tax was of a regulatory and compensatory nature but clarified that it need not be proportionate to the expenditure incurred on regulation and services. The Court held that what is necessary is the existence of a specific, identifiable object behind the levy and a nexus between the subject and the object of the levy. The Court found sufficient nexus between the tax and the benefits conferred by the State Government, such as lighting, traffic control, and amenities for passengers along National Highways. 4. Violation of Art. 301 of the Constitution: The appellants argued that the levy of tax on passengers and goods passing through Haryana interfered with the freedom of trade, commerce, and intercourse under Art. 301 of the Constitution. The Court rejected this argument, stating that regulatory and compensatory taxes are outside the purview of Art. 301. The Court cited previous judgments, including Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, to support its conclusion that such taxes do not contravene Art. 301. 5. Additional Issues in Uttar Pradesh and Bihar Motor Vehicles Taxation Acts: In the context of the Uttar Pradesh Motor Vehicles Taxation Act, the appellants argued that the vehicles did not "use" the roads within Uttar Pradesh as contemplated by Sections 4 and 5A since they did not pick up or set down passengers or goods within the State. The Court rejected this argument, stating that the tax is levied on the basis of user in the State and not on the act of picking up or setting down passengers or goods. In the Bihar cases, the appellants contended that Sec. 3(6) of the Bihar Taxation of Passengers and Goods Act did not apply to vehicles merely passing through Bihar. The Court disagreed, stating that a journey through the State involves a journey from a place outside the State to a place inside the State and vice versa, thus attracting the tax. 6. Alleged Violation of Art. 14 of the Constitution: The appellants argued that the levy of tax on vehicles passing through Uttar Pradesh from a place outside to a place outside Uttar Pradesh was violative of Art. 14 since these vehicles were not allowed to pick up or set down passengers or goods within Uttar Pradesh, unlike vehicles with permits granted by Uttar Pradesh authorities. The Court found no merit in this argument, stating that the tax is payable because of the user of the roads, and the question of picking up and setting down passengers and goods is dependent on the conditions of the permit and reciprocal agreements between States. Conclusion: The Supreme Court dismissed all the appeals, Special Leave Petitions, and Writ Petitions, upholding the validity of the relevant provisions of the Haryana, Uttar Pradesh, and Bihar Motor Vehicles Taxation Acts. The Court found no violation of Art. 301 or Art. 14 of the Constitution and affirmed the legislative competence of the State Legislatures to levy the impugned taxes.
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