TMI Blog1963 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be idle to suggest that a tax imposed by the Act in the present case should be struck down because it has taxed only tea and jute. In the present case, undoubtedly, tea has been carried over a part of the inland waterways in Assam and that satisfies the test of nexus. The argument of extra-territoriality must, therefore, fail. The argument based on the fact that the goods have been entrusted to the railway for through carriage, and so, the carriage of the goods should be held to be outside the purview of s. 3 of the Act, cannot be sustained. The power to levy a tax which has been conferred on the State Legislature by Entry 56 cannot, therefore, be said to be controlled by the Tea Act in question. 'It would be noticed that List I does not contain any Entry by which the Central Legislature can pass an Act levying a tax on goods carried which can be said to control Entry 56 in List 11. That being so, we, must hold that there is no substance in the argument that the State Legislature has no power to levy a tax on tea which is carried over- a part of the area of the State of Assam. The result is, the petition fails and is dismissed with costs. - W.P.(C) 134 OF 1962 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. This position is conceded by Mr. Mazumdar for the petitioners. Petitioner No. 2 who is the Manager of Petitioner No. 1 is, however, a citizen of India and as such, he is entitled to challenge the validity of the Act inasmuch as the respondent threatens to take action in pursuance of the material provisions of the Act' against the company of which he is the Manager. Mr. Setalvad does not dispute the right of petitioner No. 2 to move this Court by a petition under Art. 32. After the Act was passed and it came into force, the question about the scope and effect of the provisions contained in Part XIII of the Constitution which had been dealt with by this Court in the case of Atiabari Tea Co.( [1961] 1 S.C.R. 809) came to be considered. by a larger Bench in the case of the Automobile Transport (Rajasthan) Ltd. v. The State of Rajasthan([1963] 1 S.C.R.491), and the decision of this larger Bench was -pronounced on the 9th April, 1962. Since the Act has been passed by the Assam Legislature with the previous sanction of the President directly as a result of the decision. of this Court in the case of Atiabari Tea Co, the present proceedings can be appropriately described as an after-ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol and direction of the company. Naturally, the remuneration 'and prospects of petitioner-No. 2 depend upon the good and economical management and the prosperity of the business of the Company. The petition avers that at all material times the company exported the tea grown and manufactured by it in its tea garden by Railway from Garopara Railway Station in the district of Jalpaiguri to the Calcutta port. It is common ground that Calcutta Port is the principal tea market in the country for sale for consumption at home as well as for export overseas. According to the. petition, the tea was delivered packed in chests to the North Eastern Railway Administration at Garopara Rly. Station and the rate charged by the said Administration was paid to it for carrying the goods to Calcutta. It is clear that both the booking station and the station of destination are in the State of West Bengal. When the tea thus travels from Garopara to Calcutta, it hag to traverse a short distance of about 67 miles through Assam to Dhubri Ghat, on the bank of the River Brahmaputra. It appears that by an arrangement between the Railway and the I.G.N. and R.S.N. Co. Ltd. these goods. are taken over by ferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffs and trade barriers but also from all taxation on commercial intercourse. As such, he held that the said Act was unconstitutional. The majority view was that the freedom of trade guaranteed by Art. 301 was wider than that contained in s.. 297 of the Government of India Act, 1935, which meant that taxes which directly and immediately impeded: the freedom of trade would come within the mischief of Art. 301. According to this view, Art. 301 provides that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves; and if any Act imposes any direct restrictions on the movement of goods, it attracts the provisions of Art. 301. On the majority view, if the impugned tax imposes a restriction on the movement of trade, the Act could be sustained if it complied with the provisions of Art. 304(b). In regard to the Act with which the Court was then concerned, the majority judgment observed that it may be that one of the objects in passing the Act was to enable the State Government to raise money to keep its roads and waterways in repairs; but that object may and can be effectively achieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which heard the Automobile Transport (Rajasthan) Ltd. ([1963] 1 S.C.R. 491) case, but a corollary was added to the said view as we have just indicated. The majority view in the Atiabari case("' proceeded on the basis that the Australian decisions which dealt with the scope and effect of s. 92 of the Australian Constitution would be of no assistance in constraing the effect of the provisions in part XIII of our Constitution, because the legislative, historical and political background, the structure and the effect of the relevant provisions contained in Part XIII were in material particulars different from those of s. 92 of the Australian Constitution; s. 92 is absolute in terms and on its literal construction, admits of no exceptions. The Australian decisions, therefore, had to introduce distinctions, such as compensatory or regulatory tax laws in order to take laws answering the said description out of the purview of s. 92. In our Constitution, however, though Art. 301 is worded substantially in the same way as s. 92, Art. 302 and 304 provide for reasonable restrictions being imposed on the freedom of trade subject to the requirements of the said two Articles, and so, the proble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be open to the petitioners to contend that its compensatory character is irrelevant to the enquiry under Art. 304(b). In the present case, the Assam High Court which dealt with the 487 writ petitions has found that the Act is not compensatory, and Mr. Setalvad has not urged before us that the Act is in fact compensatory. That is why we are proceeding to deal with the merits of the dispute between the parties in the present case on that basis. The main question, therefore, would be that the tax imposed by the Act not being compensatory in character, are there any reasons to justify the respondent's contention that the restrictions imposed by it are reasonable and in the public interest? Let us then consider the broad features of the Act and its material provisions before dealing with the several points urged before us. The Act consists of 34 sections. As we have already noticed, the Bill was introduced after obtaining the previous sanction of the President, and the Act has been passed in accordance with the provisions of Art. 304(b). The preamble to the Act provides that the Act has been passed to provide for the levy of a tax on certain goods carried by road or on inland water- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the producer and determine the tax payable by him on the basis of his return. Section 10 deals with cancellation of assessment; s. 11 makes a provision for assessment in cases of evasion and escape and authorises the Commissioner within two years of the expiry of the period in question to serve on the producer a notice requiring him to furnish a return, and empowers him to proceed to assess or reassess the producer as provided by it. Section 12 deals with rectification. Section 13 provides for penalty for non-submission of returns and evasion of taxes. Under s. 14 it is provided that assessment is no bar to prosecutions and penalties. Section 15 makes the tax payable by the representative of a deceased producer. Sections 16 and 17 deal with appeals and revision, while s. 18 prescribes for the computation of the period of limitation for the said two remedies. The notice of demand is provided for by s. 19, and the period when the tax is to be paid is laid down by s. 20. Section 22 prescribes the mode of recovery; s. 23 provides for refunds; and s. 24 for employers' prosecution for failure to furnish returns. Section 25 provides that no court shall take cognizance of any offence und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled that Entry 30 in List 1 deals with carriage of passengers and goods by railway, sea or air, or by national waterways in mechanically propelled vessels, and so, Entry 56 in List II does not cover cases falling under Entry 30 in List 1. It is only in regard to goods and passengers carried by road or inland waterways that the State Legislature can pass a law imposing taxes. Mr. Pathak's contention is that s. 3 read with the proviso to sub-section (2) clearly contemplates that the primary and the sole liability to pay the tax on tea has been placed on the producer even in cases where the tea in question may have been sold at the tea garden before it is carried. In other words, the contention is that in cases where tea is carried by the purchaser, it is only the purchaser of the tea which is carried who can be taxed, and since the producer is taxed even in such cases, the taxation itself is beyond the legislative competence of the State Legislature. This argument proceeds on the assumption that the proviso lends colour to the construction of s. 3(2). Section 3(1) is enacted in terms of Entry 56 and it purports to indicate what the taxable event is. Section 3(2) makes the producer l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. We would, therefore, proceed to deal with Mr. Pathak's argument on the basis that s. 3(2) makes the producer liable even in. cases where tea has been sold by him to a purchaser before it is carried away from the garden. This argument of legislative incompetence seems to assume that Entry 56 requires that the tax must be levied by the State legislature on goods which are carried only against the owner of the goods that are carried, or against the persons who carry them. We do not see any Justification for introducing such limitations in the said Entry. It is hardly necessary to emphasise that Entries in the three Lists in the Seventh Schedule which confer legislative competence on the respective Legislatures to deal with the topics covered by them must receive the widest possible interpretation; and so, it would be unreasonable to read in the Entry any limitation of the kind which Mr. Pathak's argument seems to postulate. Besides, it is well-settled that when a power is conferred on the Legislature to levy a tax, that power itself must be widely construed; it must include the power to impose a tax and select the articles or commodities for the exercise of such power; it must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations of administrative convenience as well as considerations of facility in recovering the tax cannot be treated as irrelevant in this context. The tea which is taxed has been produced by the producer and even when he sells it to a purchaser, it is obvious that it would be carried away and not left with the producer, and so, the legislature may have thought that it would be appropriate to make the producer liable to pay the tax. It may also be relevant to bear in mind that the cases of sale of tea before it is carried cannot be too many. As we have already seen, the earlier Act did not include the proviso and that seems to suggest that usually, it is the producers who produce the tea in their gardens and carry it to Calcutta either for sale, or for home consumption, or for export. In fact, the petitioners before us are producers who have carried their own product from their tea gardens to Calcutta, and we were told that amongst the 487 persons who moved the Assam High Court by their writ petitions, not one was a purchaser; everyone was a producer who carried his own goods. Apart from these facts, however, it is impossible to sustain the argument that it is not competent to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State of Orissa([1962] 1 S.C.R. 549), this Court has observed that the power to legislate with respect to a tax comprehends the power to impose the tax, to prescribe machinery for collecting the tax, to designate the officers by whom the liability may be enforced and to prescribe the authority, obligations and indemnity of those officers. Therefore, we do not think Mr. Pathak is right in contending that merely because in a few cases where tea may be sold at the garden before it is carried, the producer is made liable to pay the tax, s. 3 itself is outside the legislative competence of the Assam Legislature. Then, Mr. Pathak argues that the Act which has been passed under Art. 304(b) cannot act retrospectively. The argument is that when an Act is passed under Art. 304(b) after introducing the Bill with the previous sanction' of the President, it must always and in every case operate prospectively. The scheme of Part XIII according to Mr. Pathak, clearly shows that if the State Legislature wants to avail itself of the provisions of Art. 304(b), it cannot purport to pass an Act in the first instance without taking recourse to Art. 304(b) and if the said Act is struck down, then t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied. In rejecting this contention this Court observed that the Privy Council's decision proceeded solely on the connotation of the word "prohibits" in s. 2982' of the Government of India Act, 1935, and can be of no assistance in the construction of Art. 286(2) wherein the word does not occur. What this Court has observed about Art. 286(2) as it formerly stood in the Constitution applies with greater force to Art. 304(b). It is true that there are some provisions in the Constitution which prohibit retrospective legislation as, for instance, Art. 20(1) (2) vide M/s West Ramnand Electric Distribution Co. Ltd. v. State of Madras(1). But Art. 304(b) cannot be construed to mean that a law passed under it must in every case be prospective. If a Statute is passed under Art. 304(b) retrospectively, its reasonableness may, of course, fall to be considered on the merits in a given case but that is not to say that in no case can a statute be passed under the sain Articles to operate retrospectively. Then as to the argument about the scheme of Part XIII, we do not see how a statute passed under Art. 304(b) would always and necessarily defeat the said scheme if its provisions are made retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax. We have already noticed that the proviso in question is not retrospective in operation, and so, this argument has to be tested by reference to the remaining portion of s. 3(2). Thus tested, it is difficult to accept it as sound. In this connection, we may refer to the recent decision of this Court in Rai Ramkrishna v. State of Bihar(1) where a similar plea was rejected and it was pointed out that this Court has consistently held that the mere fact that a validating statute operates retrospectively does not justify the contention that the character of the tax sought to be recovered by such retrospective operation is necessarily changed. The next question to consider in dealing with the validity of the Act which has been passed under Art. 304(b) is the extent of the dispute that is justifiable in law. Art. 304(b) provides that notwithstanding anything in Art. 301 or Art. 303 the Legislature of a State may by law impose such reasonable restrictions on the freedom of trade, commerce or (1) [1964] 1 S.C.R. 897. intercourse with or within that State as may be required in the public interest, provided that no Bill or amendment for the purposes of clause (b) shall be introduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest as required by Art. 304(b). The same argument has been urged by him in regard to the presumption in so far as the petitioners' fundamental right under Art. 19 (1)(g) is concerned. He urges that in determining the content of the individual's fundamental right under Art. 19(1)(g), we must take into account Art. 19(1)(g) as well as the limitations placed on it by clause (6) of Art. 19. The fundamental right to carry on the trade is not an absolute right; it can be regulated and controlled by law which imposes restrictions on the said right, provided the said restrictions are reasonable and in the interests of the general public, and so, the contention is that when we speak about the initial presumption of constitutionality, it means that the court should assume that the restrictions imposed by the statute are reasonable and in the interests of the general public, unless the contrary is shown. On the other hand, Mr. Pathak strenuously argues that the initial presumption would be rebutted as soon as it is shown that the fundamental right under Art. 19(1)(g ) is invaded by a statute, or the freedom of trade guaranteed by Art. 301 is assaulted by the impugned statute. Once a citizen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws. We may in this connection refer to the observations made by this Court in the case of Hamdard.Dawakhana (Wakf) Lal Kuan, Delhi v. Union of India ([1960] 2 S.C.R. 671, 679.). Another principle which has to be borne in mind in examining the constitutionality of a statute, it was observed, is that it must be assumed that the legislature understands and appreciates the needs of the people and the laws it enacts are directed to problems which are made manifest by experience and that the elected representatives assembled in a legislature enact laws which they consider to be reasonable for the purpose for which they are enacted. Presumption is, therefore, in favour of the constitutionality of an enactment. It is significant that all the decisions to which reference is made in support of this statement of the law are decisions under Art. 14 of the Constitution. Mr. Setalvad has fairly conceded that in view of the decision of this Court in the case of Saghir Ahmad([1955] 1 S.C.R. 707, 726), it would not be open to him to contend that even after the invasion of the fundamental right of a citizen is proved under Art. 19(1)(g), the onus would not shift to the State. In our opinion, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pressed by him into service in support of the plea that the restriction is unreasonable. We are not impressed by this plea. It is then urged that the serious infirmity in the Act is that it levies a flat rate in respect of goods carried. Normally, the method which should have been adopted by the Act is what is sometimes described as the ton-mileage method, i.e., levy the tax according to the weight of the goods carried and the distance over which they are carried. Since the Act imposes a flat rate merely on the weight, the burden, imposed by it is unreasonable. On the other hand, Mr. Setalvad strongly urges that the tax constitutes a reasonable restriction in the public interest, because it purports to raise revenue for public purposes. As we have already seen, tax laws have to stand. the scrutiny of Art. 19. That being so, as soon as the validity of a tax law is challenged under Art. 19, the State would be entitled to rely on the fact that the revenue raised by the tax law serves public purpose and that is its basic justification for being treated as a reasonable restriction on the individual's fundamental right under Art. 19(1)(g). It would, therefore. follow that the consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) it would be open to him to sustain the restriction imposed by the tax on the ground that the tax is levied not merely to raise general revenue for the State which itself is a public purpose, but that the tax is raised and utilised for keeping the waterways and the roads in good condition in the State. In our opinion, there is considerable force in these contentions. Then we turn to the main point urged by Mr. Pathak that the flat rate introduces an element of unreasonableness in the levy of the tax. It is necessary to bear in mind that having regard to the interests of the trade as a whole, a flat rate may in some cases be reasonable. If different rates are levied by reference to the distance over which the tea is carried before it reaches the Calcutta Port, it would obviously mean that some producers of tea would have to pay more taxes than others and that would introduce an element of unfair competition between the producers of tea considered as a class. We are referring to this aspect of the matter to emphasis the fact that the legislature has to consider several relevant factors before deciding how a particular tax should be levied. The law of taxation is in the ultimate an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that, in our opinion, is not justified because the two categories are not same or similar in character. Besides, an argument of this kind is purely hypothetical and not based on any material facts. It is very difficult to assume that producers who were taxed under the earlier Act paid the tax without preferring an appeal or revision though they had a grievance against the validity or regularity of the assessment order. Therefore, we do not think the challenge to the validity of s. 34 can be sustained. A similar challenge has been made against the validity of s. 24 which prescribes punishment for the three categories of offences specified by it under clauses (1), (2) (3). The argument is that since the earlier Act was struck down as unconstitutional, if any producer had knowingly submitted false returns or had knowingly produced incorrect account, or had contravened the relevant provision of s. 8(1), it could not be said that he was guilty of any offence, and so, he could not have been prosecuted under the corresponding provision of the earlier Act which also was s. 24, that being so, s. 24, of the present Act which purports to operate retrospectively would be invalid. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring in mind that the power of the State to levy taxes for the purpose of govern- ance and for carrying out its welfare activities is a necessary attribute of sovereignty and in that sense it is a power of paramount character. In what cases a taxing statute can be struck down as being unconstitutional is illustrated by the decision of this Court in K.T. Moopil Nair v. The State of Kerala ([1961] 3 S.C.R. 77.). In that case, a careful examination of the scheme of the relevant provisions of the Travancore-Cochin Land Tax Act (No. 15 of 1955) satisfied this Court that the said Act imposed unreasonable restrictions on the fundamental rights of the citizens, conferred unbridled power on the appropriate authorities, introduced unconstitutional discrimination and in consequence, amounted to a colourable exercise of legislative power. It is in regard to such a taxing statute which can properly be regarded as purely confiscatory that the power of the Court can be legitimately invoked and exercised. In our opinion, it would be idle to suggest that a tax imposed by the Act in the present case should be struck down because it has taxed only tea and jute. The next contention to which referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he next question which calls for an answer, In support of the plea of extra-territoriality, it is urged that the petitioners are all residents of Bengal, that they carry on their tea business in Calcutta, and it is only on the very narrow ground that in its passage from tea garden to Calcutta the tea in question has to cross a distance of a mile and a half in Assam that the tax purports to make the producers from Bengal liable under s. 3(2). This argument also is entirely misconceived. Entry 56 in List II empowers the Assam Legislature to levy a tax on goods carried. Whether the goods are carried for a long distance or a short distance cannot effect the question of the legislative competence of the legislature. It is the carriage goods through Assam that is the taxing event and since the physical carriage of goods through a part of Assam is not denied, it is difficult to see how a challenge to the validity of the Act on the ground that it is extra- territorial in character could be sustained. The doctrine of nexus has been applied in considering the validity of tax statutes in this country in the Tata Iron Steel Co. Ltd. v. The State of Biliar([1958] S.C.R. 1355.). Das C.J., who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations which are relevant in dealing with the question of import. Therefore, we do not think that' the attempt to change the validity of the Act on the ground that the carried goods which are taxed do not join the mass of goods in the State of Assam, can succeed. Mr. Mazumdar has also urged that so far as the petitioners' goods are concerned, they are substantially carried by the railway and should, therefore, be field to be outside the purview of s. 3 of the Act. We have already seen that the operation of the Act is confined to the goods carried by road or by an inland waterways and the goods carried entirely by the railway are outside its scope. The question which Mr. Mazumdar has raised before us is that having regard to the long distance which the tea chests have travelled between the tea gardens and the Calcutta Port, it should be held that a short distance of 1-1/2 to 2 miles which they travelled by inland waterways does not alter the character of their journey; it is, on the whole, a journey made by the railway, and so, the goods must be deemed to have been carried by railway throughout. This argument also is misconceived. As we have just indicated, the length of the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to glance through the relevant provisions of the Tea Act to realise that the scope and purpose of the said Act is entirely different from the scope and purpose of the taxing Act with which we are concerned. The pith and substance of the taxing statute is the levy of a tax on tea, which is carried in the State of Assam and the right to levy such a tax cannot be said to have been taken away merely by the fact that a Tea Act had been passed by the Central Legislature which is referable to the relevant Entry in List 1 of the 7th Schedule. The power to levy a tax which has been conferred on the State Legislature by Entry 56 cannot, therefore, be said to be controlled by the Tea Act in question. 'It would be noticed that List I does not contain any Entry by which the Central Legislature can pass an Act levying a tax on goods carried which can be said to control Entry 56 in List 11. That being so, we, must hold that there is no substance in the argument that the State Legislature has no power to levy a tax on tea which is carried over- a part of the area of the State of Assam. A similar argument was urged by Mr. Mazumdar on the strength of the provisions contained in the River Boards Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous sanction of the President." It is not in dispute that the sanction of the President contemplated in the proviso to Art. 304(b) had been obtained in connection with the impugned Act. That Act had, however, a predecessor which bore the same title and was Assam Act 13 of 1954 but for which no sanction of the President under Art. 304(b) had been obtained. In Atiabari Tea Co. Ltd. v. The State of Assam(1), this-Court by a majority held that as Act 13 of 1954 imposed a tax on the carriage of (1)[1961]1 S.C.R. 809. goods it constituted a direct restriction on the free movement of trade and as no sanction of the President had been obtained in respect of it was void. No question arose there as to the reasonableness of the restriction imposed by the Act. The other members of the Court who constituted the minority expressed dissenting opinions but no useful purpose will be served by referring to them. As a result of the opinion of the majority Act 13 of 1954 became void. Article 301 and the succeeding articles in Part XIII, including Art. 304, were again considered by another and a larger bench of this Court in The Automobile Transport (Rajasthan) Ltd. v. The State of Rajasthan.( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. These will be mentioned later. The impugned Act came into force on April 15, 1961, and imposed a tax on manufactured tea and jute carried by any means other than railway and airways. This case is not, however, concerned with any carriage of jute. The Act was given a retrospective operation as it was to be deemed to have effect from April 24, 1954, being the date on which the predecessor Act, (Act 13 of 1954), came into force. Further, the Act was to remain in force till March 31, 1962, that is, for about a year only; see s. 1(3). It has since been replaced by another Act, namely, Act 16 of 1962. It may be that as this last mentioned Act was in contemplation, the impugned Act was given a short term of life. This Act further stated that the tax collected under Act 13 of 1954 would be deemed to have been collected under the corresponding provisions contained in it. There is one other matter to which I would like to refer before I proceed to consider the points argued (1) [1961] 1 S.C.R. 809. at the bar. I have said that the tea estate of the peti- tioner Company was in West Bengal and not in Assam. Its practice was to book its tea from a railway station in West Bengal for carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act levied the tax not really on goods carried by road or waterways and was for that reason, ultra vires the State Legislature and void. It may be that there is nothing in s. 3 imposing directly a tax on the purchaser of the tea even when he is the person carrying it. It seems to me however that under Item 56 of List II it was competent for the legislature to provide for the tax being realised from the producer in the way it has been done in the Act. It is wellknown that the entries in the legislative lists have to be read with all possible width and amplitude. An entry authorising the levy of a tax of a particular kind would justify that levy in the manner best suited for collecting it The purchasers of tea would be mostly parties in Calcutta. The State of Assam may find it difficult to realise the tax from them. It may, therefore, legitimately provide that the tax may be realised from the producer even where he does notches the tea for otherwise the tax may be evaded. Then again, under s. 3 tax is leviable only when tea has been carried by road or inland water-ways. It is clear, however, that it was the action of the producer, namely, the sale by him, which alone caused the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld to be void as it had been given retrospective operation. This contention was founded on the argument that a statute contemplated by Art. 304(b) cannot be retrospective. I am unable to see why not. Without more, when a legislature has the power to pass a law it can pass a law having a retros- pective operation. This, I do not think, was disputed. What was said was that the terms of Art. 304 indicated that it was not intended that a retrospective law would be passed under it. It was argued that the law contemplated there was one which put restrictions on the freedom of the flow of trade and, therefore, if the trade had once 'flown' it could not be restricted and so a retrospective effect could not be given to a law passed under the Article. I am unable to appreciate this argument. If the flow of trade in future can be restricted, then I do not see why a trade which has flown in the past cannot be restricted retrospectively. It is not disputed that a restriction which can be imposed under cl. (6) of Art. 19 can be imposed retrospectively. There is no reason why the same position should not obtain in regard to the restrictions contemplated by Art. 304(b). It was then said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider to be reasonable for the pupose for which they are enacted. Presumption is, therefore, in favour of the constitutionality of an enactment": Hamdard Dawakhana (Wakf)(3) case at p. 679. (1) L.R. 73 I.A. 19 (2) [1955] 1 S.C.R. 707, 727. (3)[1960] 2 S.C.R. 671, 679. If the Legislature is to be presumed to know that an Act which makes a distinction is justified because the people with whom it is concerned are distinguished from the others by an intelligible differentia having a rational relation to the objects of the Act, that being the test to save a statute from being held to be discriminatory, then I do not see why it cannot be presumed that knowing the people and their needs, the legislature has passed a law which imposes reasonable restrictions on their activities. It was said that the restriction is permitted by cl. (6) of Art. 19 which contains an exception and that an exception has to be proved by the party who wants to take advantage of it. That does not seem to me to be a proper way of reading a constitution and this rule of construction must, in my view, give way to the rule of presumption of constitutionality. It may also legitimately be said that there is no except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weight on it which it could not carry. Furthermore it has been established on the affidavit that the Government spends on roads and facilities on waterways much more than what is collected in the shape of tax on the goods carried. That also is a consideration which goes to establish the reasonableness of the levy. The petitioner has not been able to put before us anything which would destroy the effect of these considerations. The fact that the Act imposes the tax with retrospective effect cannot by itself also make the restriction unreasonable. For the reasons earlier mentioned, it may still be reasonable. I now proceed to consider the charge of discrimination. It was said that the Act offended Art. 14 because it taxed only tea and jute and no other article. But I am unable to see that. this is discrimination. The Act applies to all who are concerned with the carriage of tea and jute. No doubt it does not apply to the carriage of other goods but as has been said, "it is for the legislature to decide on what objects to levy": see Raja Jagannath Baksh Singh v. The State of Uttar Pradesh ([1963] 1 S.C. R. 220, 234). The legislature must pick and choose and such picking and choosin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take these proceedings under that Act, he cannot complain. That would not be a case of discrimination by the Act but would be giving up by a party of his rights under it. Therefore the position of a tax payer is the same under both the Acts. We were also referred to s. 24 of the Act. That section provides for 'prosecution for failure to do certain things required by the Act to be done. It was contended that as the section had been given retrospective operation, it had the effect of making something which was not an offence when done, an offence by an ex post facto law: It is not necessary to go into that question for it is purely academic. It has not been suggested that the petitioner has been affected by it. Another point argued was that the Act was only a colourable exercise of legislative power under Item 56 of List 11. The contention was that the Act had nothing to do with tax on carriage of goods but was really passed to retain what had been collected under an Act which this Court had declared invalid. That of course is not on the face of it wholly correct, for the Act operated prospectively also. But apart from that this contention which was based on s. 34(1) of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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