TMI Blog1961 (3) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... rmits from the Regional Transport Authority, Jodhpur, for diverse routes over roads which have different kinds of surfaces, some being sandy or katcha and others, metalled., tarred, etc. The Act was passed in 1959 for levying a tax on passengers and goods carried by road in motor vehicles. The power to enact the Act purports to be derived from Entry No. 56 of the State List in Sch. VII to the Constitution, which reads: 156. Taxes on goods and passengers carried by road or on inland waterways. The Act received the assent of the President on April 27, 19.59, and was published in the Rajasthan Gazette on April 30, 1959. The same day, the Rules framed in exercise of the powers conferred by s. 21 of the Act were also published, and the notification was also issued. The Rules were subsequently amended, and we are concerned with the Rules, as amended. Before we deal with the case further, it is convenient to see how the Act is constructed and what the Rules and the notification provide. The Act, which consists of 21, sections, came into force in the whole of the State of Rajasthan on May 1, 1959. The Act contains the usual provisions to be found in all taxing statutes about app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance covered in the State bears to the total distance of the journey: Provided that where passengers are carried or goods transported by a motor vehicle from any place within the State to any other place within the State through the intervening territory of another State, the tax shall be levied on the full amount of the fare or freight payable for the entire journey and the owner shall issue a single ticket or receipt, as the case may be, accordingly. (4) Method of collection of tax.-The tax shall be collected by the owner of the motor vehicle and paid to the State Government in the prescribed manner: Provided that in case of public carriers the State Government may accept a lump sum in lieu of the tax chargeable on freight in the manner prescribed: Provided further that in case of contract carriages the State Government may accept a lump sum in lieu of the tax chargeable on fare in the manner prescribed. Section 5 lays down the method of levy, and enjoins the issuance of a ticket showing the tax paid of a receipt showing the freight charged and the tax paid. It includes a proviso that in the case of passengers the tax becomes chargeable only on entry in the State, if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction over that area: Provided that- Provided that (a) for the quarter ending on the 30th day of June', 1959, such payment shall be made for the months of May and June, 1959, at the rate of 1/12 of the said sum for each month, (b) where the owner has not plied his vehicle for the entire quarter immediately preceding any of the aforesaid dates a proportionate decrease in the amount due for that quarter may be made, (c) if the owner ceases to ply his vehicle on a date preceding any of the aforesaid dates, the proportionate amount for the quarter shall be paid by him immediately upon such cessation, and (d) where the owner has not plied his vehicle for a continuous period of not less than three months and produces a certificate from the authority competent under the Rajasthan Motor Vehicles Taxation Act, 1951, or the rules made thereunder to the effect that he has been refunded the tax for that period under section 7 of the said Act, no amount by way of tax under the Act shall be payable for such period. (2) The owner shall inform the Assessing Authority as soon as his vehicle goes out of use. When the vehicle is again put on the road, an intimation to that effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Art. 14 as discriminating between this mode of transport and the Railways. The Act is further challenged on the ground that it concedes to the State Government the power to fix the amount of lump sum payment without guidance. The rates and lump sum payment are challenged because they involve discrimination between routes involving roads of different surfaces. Rules 8 and 8-A and the notification are challenged as, it is submitted, they go beyond the Act by making the lump sum payment compulsory, even though under the Act it is optional, and involve payment of tax even when no passengers or goods are transported. Lastly, it is said that by making tax payable even though the route between two intra-State point passes outside the State, the Act has an extra-territorial operation which is ultra vires the legislature. The first-and the 'Main-contention is that the Act in the guise of taxing passengers and goods, taxes really the income of the petitioners, or, at any rate, fares and freights, and is thus unconstitutional. It is argued that the tax is borne by the operators because of competition with the Railways. That the petitioners are required to bear the tax themselves to stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the State. For this purpose, there is an elaborate scheme in R. 8-A to avoid a charge of tax on that portion of the route which lies outside the State. There is thus no tax on fares and freights attributable to routes outside the State except in one instance which is contemplated by the proviso to sub-a. (3) of s. 3 and to which reference will be made separately. In our opinion, the levy of tax cannot be said to offend Arts. 301 and 304 of the Constitution. The next contention is that the Act allows an option to pay a lump sum in lieu of the tax, but Rules 8 and 8-A and the notification make the payment of the lump sum compulsory. There is no doubt that ex facie the two provisos to a. 4 employ language which is permissive, while the two Rules and the notification employ language which is imperative. The two provisos to a. 4 are enabling, and thereby authorise the State Government to accept a lump sum payment in lieu of the tax actually chargeable. The word accept shows that the election to pay a lump sum is with the taxpayer, who may choose one method of payment or the other. The inclusion of such a provision is designed to promote easy observance of the Act and also its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es an option, it cannot be negatived by the Rules. The Act and the Rules must be read harmoniously, and reading them so, it is plain that the apparent mandatory language of the Rules and the notification still retains the permissive character of the section, but only lays down what the amount of the lump sum must be, if lump sum payment is made in lieu of payment of the tax calculated on actual fares and freights. If the two Rules and the notification are read in this way, the mandatory language is limited to the prescribing of the lump sum rates. In our opinion, the two Rules and the notification are not void and contradictory of the Act. It is contended that the power to fix lump sums in lieu of tax has been conferred upon Government without guidance, and is, therefore, unconstitutional. It is also urged that the levy of a lump sum leads to the result that even if passengers or goods are not transported, the tax is still payable. These arguments, in our opinion, cannot be -accepted. The learned Advocate-General pointed out that the lump sum rates work out at a very low figure, the minimum being less than Re. 1/- per day and the maximum, ₹ 1.50 nP. per day. The rates are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assumption of a return in the shape of conveniences. If this be the true import of a tax, it is but natural that taxes will be graded according as they involve more or less of such conveniences. They will be heavy in case of roads requiring greater expenditure to construct and to maintain, than in case of roads not requiring such expenditure. All operators using the better kind of roads have to pay the heavier tax, and there is no discrimination between them as a class. Discrimination can only be found if it exists between persons who are comparable, and there is no comparison between persons using the better kind of roads and those who use roads which are not so good. It is the cost of construction and maintenance which makes the difference in the tax, and no case of discrimination can be said to be made out. The last contention is that the proviso to sub-s. (3) of s. 3 is extra territorial in nature, because it makes the tax payable on fares and freights attributable to the territory of another State when the route passes through such territory, even though the journey starts and ends in Rajasthan. We were informed that now there are no such routes, but even otherwise, such p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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