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TMI Blog1991 (7) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles in relation to petrol or diesel, may become much better. Under the policy foreign collaboration was to be introduced in the country. With the liberalisation certain collaborators from Japan entered into the field. These foreign collaborators collaborated with their Indian manufacturer-counterparts to manufacture motor vehicles with the Japanese technology. Foreign collaboration with the Japanese created a competitive market in the country and also resulted to some extent in fuel conservation of petrol and diesel but the Japanese vehicles began to cost more and more because import of spare parts was a very expensive transaction and the net result was that the price escalation of the light/medium vehicles manufactured by the local manufacturers having collaboration with Japan began escalating tremendously; that the local manufacturers having collaboration with the Japanese could not stand in competition with TATAs whose manufacturing technology was quite advance despite being indigenous. TATAs then began manufacturing light/medium commercial vehicles. Under the impact of this competition, the manufacturers who had collaboration with the Japanese began to press the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the petitioner is that TATA-407 despite being a fuel efficient light commercial vehicle with a cubic capacity of 2956 cc, is not entitled to the concession/advantage given vis-a-vis fuel efficient light commercial vehicles manufactured by the local foreign collaborators with the engine capacity of 3200 cc to 3500 cc; that the notification has introduced a condition which is more of individious nature than relevant to the object sought to be achieved. The only object was that in the given situations, the vehicles should be fuel efficient as per fuel efficient test. Despite having conceded that TATA-407 is fuel efficient, the Government of Punjab is not giving the advantage of the notification, i.e., allowing sales tax at the rate of 0.5 per cent on the ground that the vehicle although fuel efficient is not having the cubic capacity between 3200 cc to 3500 cc; that it is a settled law that every notification of the Government must have a reasonable connection to the object to be achieved; that the notification issued by the State of Punjab has put the petitioner's vehicle, TATA-407, at a disadvantageous stage and thus the notification being discriminatory in nature is ultra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed that fuel efficiency is one of the considerations and not the sole consideration for the notification; that the vehicles which are both fuel efficient and having engine capacity between 32003500 cc constitute a clear and distinct class based on relevant consideration; that the notification has not effected any discrimination and that, if at all, TATA-407 is at a disadvantageous position then it is not because any discrimination has been caused against the said vehicle but because it has failed to satisfy the condition of having engine capacity of 3200-3500 cc. I have heard the learned counsel for the parties at length. The thrust of the argument of Mr. H.L. Sibal, Senior Advocate, appearing for the petitioner is that although State has given greater latitude in the matter of levying of taxes but all taxing laws which violate articles 14, 19(1)(a),(g), 301 to 305 of the Constitution are amenable to the Constitution. State cannot treat persons equally treated as unequal in the matter of levying of taxes thereby giving concessions which results into an undue advantage in favour of a particular person; that the State cannot discriminate while levying taxes except when it is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "Whether a particular tax is discriminatory or not must necessarily be considered in the light of the nature and incidence of that particular tax and cannot be judged by what has been held in the context of other taxes except the general propositions. The precedents relating to property taxes such as land tax, building tax, plantation tax, and even income-tax or a service tax will not be of direct relevance to a luxury tax, as it is neither a property tax, nor an income-tax but a tax on the provision for luxury.........." Whether a particular tax is discriminatory or not must necessarily be considered in the light of nature and incidence of that particular tax as it cannot be judged by what has been held in the context of other taxes except the general propositions. It has further been held that in the matter of taxation, absolute equality is impossible. Paragraphs 26 and 27 of this Report are instructive as well as illustrative on the point and the same are reproduced below: "26. What then 'equal protection of laws' means as applied to taxation? Equal protection cannot be said to be denied by a statute which operates alike on all persons and property similarly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ley on Taxation, 4th Edition, Volume I, page 558). 27.. 'Perfect equality in taxation has been said time and again, to be impossible and unattainable. Approximation to it is all that can be had. Under any system of taxation, however, wisely and carefully framed, a disproportionate share of the public burdens would be thrown on certain kinds of property because they are visible and tangible, while others are of a nature to elude vigilance. It is only where statutes are passed which impose taxes on false and unjust principle, or operate to produce gross inequality, so that they cannot be deemed in any just sense proportional in their effect on those who are to bear the public charges that courts can interpose and arrest the course of legislation by declaring such enactments void.' 'Perfectly equal taxation', it has been said, 'will remain an unattainable good as long as laws and Government and man are imperfect'. 'Perfect uniformity and perfect equality of taxation' in all the aspects in which the human mind can view it, is a baseless dream." In the light of the above observations of the Apex Court, it has to be examined as to whether the Government has acted in a discriminator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200 to 3500 cc should only be extended the benefit of concessional rate of sales tax. In my view, such a condition is not arbitrary or discriminatory in nature and is thus not violative of article 14 of the Constitution of India. Any manufacturer irrespective of location/collaboration of the manufacturing, satisfying these twin conditions of fuel efficiency and engine capacity of 3200 to 3500 cc is eligible to be taxed at the rates mentioned in the notification, annexure P/2 and it cannot be said that this notification has been notified only to give an undue advantage to local foreign collaborators and especially the one which is located in Punjab. The impugned notification does not treat equally situated persons differently; it operates alike on all persons similarly situated and thus it cannot be said that the notification is violative of article 14 of the Constitution of India. The next submission of Mr. Sibal, that the notification is ultra vires article 19(1)(g) of the Constitution as the notification creates obstacles and restricts the trade of the petitioner is equally devoid of force. The notification does not put any restriction on the right of the petitioner to carry on h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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