TMI Blog1971 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the Motor 'Vehicles Act IV of 1939. Their complaint against the ever increasing burden of taxation they are called upon to bear which is said to have passed the breaking point. A short history of the taxes levied in the area which came to Andhra Pradesh from the State of Madras and the increase thereof from stage to stage by the new State based on the seating capacity of buses with stage carriage permits referred to in the pleadings is recited in the judgment of this Court in Nazeeria Motor Service v. A. P. State [1970] 2 S.C.R. 52. The latest legislation on the subject which was before this Court in that case was Validating Act of 1961 raising the rate to ₹ 37-50 per seat per quarter per bus effective from April 1, 1962. The Court upheld the impost. Thereafter, the Andhra Pradesh Motor Vehicles Taxation Act (Act V of 1963) came into force on the 20th March of that year after receiving the assent of the President on February 2, 1963. This is the Act now in force. It is an Act to consolidate and amend the law relating to levy a tax on motor vehicles in the State of Andhra Pradesh. Under s. 3(1) of the Act the State Government is empowered by notification from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed ₹ 8,54,00,000. The finding of the High Court was that far from there being any surplus over the expenditure, the taxes collected under this head were insufficient to meet the demands in this respect. According to the High Court the object of the Act being only to raise the money required to afford facilities to the operators of the transport vehicles, the tax levied answered the description of compensatory tax and did not interfere with the freedom of trade and commerce. As such the taxes were held not to offend Art. 301 of the Constitution. The High Court further took the view that it had not been shown that the power ceded to the State Government by this legislative measure was in any way detrimental to the public good or that it was opposed to the well recognised principles underlying taxation. The High Court turned down the contention that the taxes in question were arbitrary or oppressive or that they constituted an unbearable burden so as to destroy the very business of the writ petitioners. On the facts before the court as disclosed in the affidavits it did not feel disposed to hold that the operators were doing business at a loss. It also took the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bus operators running more than a certain number of buses per day were obliged to reserve for use in the event of any break-down. It was asserted that even for these buses, no matter whether they were actually used or not, tax was levied at the rate of ₹ 30 per seat per quarter. The points of law raised by this set of writ petitioners before the High Court were (a)that prior sanction of the President as required under Art. 304(b) was not obtained in respect of the levy inasmuch as such sanction was given in February and the levy was made towards the end of March. As such it was said G.O.M. 435 was unconstitutional and void. (b)the proposed increase in the rate of tax was not in public interest but only a revenue yielding measure. Since it did not company with the provisions of Part III and Part XIII of the Constitution it was illegal and unconstitutional. and (c) the levy of tax on spare buses was illegal. By a common judgment and order dated April 26, 1968 the High Court rejected the contentions raised and dismissed this group of writ petitions. This had led to the filing of the second group of appeals before us. The two writ petitions filed in this Court und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion done so, the Court took the view that the restriction imposed was not unreasonable. Nothing was shown either before the High Court or before this Court to establish that the impugned Validating Act with regard to imposition of tax was not in public interest. The utmost according to this Court that could be said was that it would result in the diminution of profits. The Court also turned down the contention based on the violation of Art. 14. In the first set of appeals now before us learned counsel for the appellants submitted that in view of the, earlier decision of this Court the only question left for consideration was whether the restriction imposed by the tax was reasonable and permissible having regard to Art. 19(1)(g) read with cl. (6) and Art. 301. According to counsel the rate of tax fixed at ₹ 67.50 per seat per quarter was an unreasonable burden and not a restriction which could be said to be reasonable either in terms of Art. 19 or Part XIII of the Constitution. It was urged that s. 3 of the Act empowering the levy of such, an unreasonable impost would be ultra vires the aforementioned provisions of the Constitution. Attempt was made to show that the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal Mainte- Total Surplus works nance 1964-65 744.35 200.51 439.50 694.01 50.34 page 206 1965-66 1059.60 225.98 490 .25 716.23 343.37 page208 1966-67 1170.00 186.98 398 .14 585.12 548.88page 208 NOTE : Figures of expenditure relate to those which are spent directly by the State Government and do not include grants given to local bodies for road construction and maintenance. Estimated figures do not include amounts given to local bodies. Apparently the figures in the end column purport to show considerable surplus in the revenue from road transport over expenditure on roads by the State of Andhra Pradesh during the years mentioned. Our attention was however drawn to the additional counter affidavit of the State affirmed before the High Court on April 24, 1968 wherein it was said that the report relied on was misleading and the chart which was taken from the annexures to the report of the Road Transport Taxation Enquiry Committee showing surplus was contrary to the prevalent state of affairs. It was categorically stated that. the figures given in the annexures to the Report are incorrect and the Government of Andhra Pradesh was not responsible for the misstatements rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development of the road system as a whole. On these facts the High Court concluded that there was no warrant for the charge that the increased levy ceased to be a compensatory measure. In the second group of petitions, the High Court also negatived the contention raised on behalf of the petitioners that the increase in taxation would virtually throw them out of the transport business. It was argued before the High Court that the increase in the tax being of the order of 50% over the pre-existing levy there was bound to be an enormous addition to the total revenues of the State and this addition could not be said to be for- the purpose of providing additional amenities to motor operators in particular but was one for adding to the general revenues of the State. As against this it was submitted on behalf of the State before the High Court that to meet the increase in the operational cost of the operators Government had permitted an increase in fares to be charged by the operators by another order bearing the same date as that of the impugned order.' Reliance was also placed on the fact that on previous occasions the operators bad no been slow in utilising similar permission to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allied purposes. We axe also not satisfied on the material before us that the impost has resulted in bus operators running their business at a loss. The only question. left. is whether there was justification for levy (I an impost at the rate of ₹ 30/- per quarter per seat on spare buses. While it is true that the spare buses are not allowed to be run regularly we see no reason- to hold that because of this the levy is unjustified, or ceases to be a compensatory tax. As was pointed out by the High Court, under S. 3 of the Act the State Government was empowered by notification to direct that a tax shall be levied on every motor vehicle used or kept for use in a public place in the State and a vehicle kept for use as a standby was therefore subject to levy under the taxing provisions. It was absolutely imperative for the owner of a fleet of buses to maintain some spare vehicles to be available for substitution in the case of a break-down. Every owner having five buses is required to maintain one spare bus and operators having more than ten buses are to keep two such buses available. Although they cannot be allowed to run regularly it is essential for the proper regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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