1969 (8) TMI 88 - SC - Indian Laws

Summary

Issues:
Constitutionality of Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods Amendment and Validation) Act, 1961 under Art. 301 and Art. 304(b) of the Constitution; Compliance with proviso to Art. 304(b); Violation of Art. 14; Discrimination in application of the Act to different regions and vehicles on inter-State routes.

The judgment involved a challenge to the constitutionality of the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods Amendment and Validation) Act, 1961. The appellants, operators holding permits under the Motor Vehicles Act, 1939, contested the tax imposed under the Act. The Act was enacted to amend and validate previous tax legislation. Initially, the validity of the tax imposed under Act 16 of 1952 was upheld, but subsequent amendments led to legal challenges. The High Court struck down the amendments as unconstitutional for lacking the President's sanction under Art. 304(b). The Validating Act 34 of 1961 was enacted to validate previous acts, amend tax rates, and empower the Government to levy additional taxes. The High Court upheld the validity of the Act, rejecting challenges under Art. 14 and Art. 19(1)(g).

The main points raised before the Supreme Court included: (1) The Act's imposition of tax for revenue augmentation, falling under Art. 301; (2) Examination of reasonableness under Art. 304(b) and Art. 19(1)(g); (3) Allegations of discrimination under Art. 14 due to regional application and taxation of inter-State route vehicles. The Court referred to established principles regarding compensatory taxation and regulatory measures to determine constitutionality under Art. 301 and Art. 304(b). The Court emphasized that compliance with the proviso to Art. 304(b) did not preclude examination of reasonableness and public interest by the court.

The Court analyzed the impact of the tax increase on transporters' businesses, considering profitability and fare adjustments. The High Court's findings on the burden of tax and profitability were reviewed, with the Court concluding that the tax did not unreasonably impede trade. The Court dismissed challenges under Art. 19(1)(g) and Art. 14, highlighting the historical context of tax legislation in different regions and the permissible differentiation in tax laws between states. The appeals were dismissed, upholding the validity of the Andhra Pradesh Motor Vehicles Taxation Act, 1961, with costs awarded to the respondent.