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TMI Blog1960 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... levied under the Travancore-Cochin Prohibition Act, 1950, or the Madras Prohibition Act, 1937, as in force in the Malabar District referred to in sub-section (2) of section 5 of the States Reorganisation Act, 1956, or the Travancore or Cochin Opium Act, or the Opium Act, 1878 (Central Act I of 1878) ". 3.. The last addition is to Schedule I of Act No. XI of 1125 where the words "other than toddy" have been put after "wine and liquors" in column (2) of item (1). Because of these amendments the vendors of toddy have now become liable to pay the sales tax of two naye paise per rupee under section 3(1)(b) of Act No. XI of 1125 which provides: "The tax shall be calculated at the rates specified in column (3) of Schedule I for every rupee in the turnover relating to the goods noted against them in column (2) thereof and at the rate of two naye paise for every rupee in the turnover relating to all other goods." 4.. All the writ petitioners are licence holders of shops selling toddy and complain that Act No. XIV of 1959 has infringed their constitutional rights under Article 19(1)(g) and is not saved by clause (6) of Article 19, since it does not reasonably restrict in the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educing the benefits under the earlier licences; (2)Toddy being agricultural or horticultural produce, the prices for the sales of such a commodity would be agricultural income and excluded from the turnover as defined by section 3 of Act No. XI of 1125. 6.. We would deal first with these objections as the decisions concerning them can be briefly stated. It is clear that where the Legislature be supreme (and the State's legislative authority concerning items of List 2 of the Seventh Schedule to our Constitution is conceded to be such) limitations beyond those of the ruling instrument would not control its exercise of the powers. It follows that a taxing statute covered by item 54 of List 2 of the Seventh Schedule cannot be challenged on the grounds of its contravening rules of estoppel, or of contracts, or being contrary to an earlier undertaking of another Act. The legality of the new amendment to Act No. XI of 1125 therefore would not be affected by an equitable estoppel against the State Government, nor by its contractual obligation of not circumscribing the benefits conferred by the earlier licences. The next objection concerning incomes from the sales of toddy being agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the fundamental right to practise a profession under Article 19(1)(g) and while rejecting the contention Venkatarama Ayyar, J., observed as follows: "Does the favoured position granted to the fundamental rights carry with it any immunity from taxation? The right to levy tax is an incident of sovereignty and the Legislatures as sovereign bodies have plenary powers of taxation subject only to such limitations as may be described by the Constitution and nowhere in the constitution do we find any prohibition against taxation of fundamental rights. Part III does not contain any such inhibition. On the other hand, there are provisions in Part XII of the Constitution, which clearly recognise the existence of such powers." The same learned Judge later observed: "But a right to carry on business is a fundamental right protected by the Constitution, and it stands to reason that a tax on such a right should not be such as to destroy it..................It might well be contended that there is in such cases a limitation on the powers of taxation, implicit in the Constitution itself, that it should not be exercised in such a manner as to take away with one hand what has been given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be judged by the standards of reasonableness set out in Article 19(6)." 9. This being the position, the objections concerning the petitioners' rights under Article 19(1)(g) having been infringed would fail, unless the writ petitioners establish that under the new amendment, the tax is unreasonable as to destroy their carrying the trade. Their learned Advocate has argued that they have paid licence fee, auction sums, and find it impossible to collect the tax from their customers, as persons consuming toddy hardly purchase toddy worth more than few annas. We thing these grounds do not make the new tax so unreasonable and heavy as to be destructive of the petitioners' right to carry trade; for it is well known that the sales tax is indirect and falls on the consumer, with the result that the dealers do not bear the burden, and the complaint of their other expenses being heavy becomes irrelevant. Nor do we see how the difficulty of collection would make the tax unreasonable, there being always persons who could be charged the tax on the bulk of commodity they consume. In conclusion we would also mention that as the new amendment levies tax and not fee, the authority holding exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides for right of individual citizens. Part XIII deals with trade and commerce as such, which, as has been pointed out, means the free passage of goods.................." Finally Das, C.J., in State of Bombay v. Chamarbaugwala A.I.R. 1957 S.C. 694 at p. 713., observes: "Articles 19(1)(g) and 301, it is pointed out, are two facets of the same thing-the freedom of trade. Article 19(1)(g) looks at the matter from the point of view of the individual citizens and protects their individual right to carry on their trade or business. Article 301 looks at the matter from the point of view of the country; trade and commerce as a whole, as distinct from the individual interests of the citizens and it relates to trade, commerce or intercourse both with and within the State". 11.. It follows that Article 301 would be infringed only where the freedom of trade be directly circumscribed by restriction, and as the tax in the petitions before us is levied on individuals on their sale turnover, there is no regulation directed against the freedom to trade. It further follows that the freedom under Article 301 is not infringed by the legislation, and the proviso to Article 304(b) would not be attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point by High Courts, the Bihar Finance Act, 1950, had charged a tax on all passengers and goods carried by motor vehicles and in Atma Ram Budhia v. State of Bihar(1952) I.L.R. 31 Pat. 493; 3 S.T.C. Suppl. 1., it was challenged among other things for contravening the proviso to Article 304. It was however held that Part XIII of the Constitution had no application as the Act did not profess to impose any restriction whatsoever on inter-State trade with or within the State. The legislation in H.P. Barua v. State of AssamA.I.R. 1955 Assam 249. levied tax on goods carried by road and inland waters in the State of Assam and was impugned on the ground among others of contravening Article 301. The learned Judges, however, held that mere imposition of tax on transport or carriage of goods and passengers contemplated by entry 56 of List II of the Seventh Schedule did not amount to interfere with the freedom of trade and commerce. Lastly a Division Bench of this Court has in Parameswaran Nair v. Sub-Magistrate(1958) K.L.T. 631. applied the doctrine to the Vehicles Taxation Act, 14 of 1950, which authorised collection of tax from vehicles using the public road in the State. The learned Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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