(1.)These appeals on certificates granted under Art. 132 of the Constitution by the High Court of Judicature in Assam and writ Petition under Art. 32 of the Constitution impgun the constitutionality of the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, (Assam Act 13 of 1954) which hereinafter will be referred to as the Act. The appellants moved the High Court under Art. 226 of the Constitution challenging the validity of the Act. The High Court by its judgment and order dated 6/06/1955, dismissed the writ petitions. Thereupon, the appellants obtained the certificates that the cases involved substantial questions of law as to the interpretation of the Constitution. The petitions under Art. 32 of the Constitution were moved in this Court for the same purpose of challenging the vires of the Act. The appellants and the petitioners will, in the course of this judgment, be referred to, for the sake of convenience, as the appellants. The State of Assam, the Commissioner of Taxes, appointed under S. 6 of the Act, and the Superintendent of Taxes are the respondents to the appeals and the writ petitions.
(2.)It appears that the appellants are growers of tea in West Bengal or in Assam and carry their tea to the market in Calcutta from where the tea is sold for consumption in the country or is exported for sale out of the country. The sale of tea inside Assam bears a very small proportion to the tea produced and manufactured by the appellants. Thus the bulk of tea produced and manufactured is carried out of Assam, either for internal consumption in India or for export abroad. Besides the tea carried by rail, a large quantity of tea is carried by road or by inland waterways from Assam to Bengal and in some of these cases, from one part of West Bengal to another part of the same State through inland waterways, only a few miles of which pass through the territory of the State of Assam. The Assam Legislature passed the act which received the assent of the Governor of Assam on 9/04/1954, the came into force on and from 1/06/1954. The purpose of the Act is to levy taxes on certain goods carried by road or inland water-ways in the State of Assam. On 30/06/1954, the second respondent, the Commissioner of Taxes, Assam, in exercise of the powers conferred upon him by sub-s. (3) of S. 7 of the Act, published a notification in the Assam Government Gazette bearing date 21/06/1954, by which he notified for general information that the return under the aforesaid Act and the rules made thereunder for the period commencing 1/06/1954 , should be furnished by 30/10/1954. The said notification also demanded the furnishing of quarterly returns before 30/01/1955 and 30/04/1955, for the quarters ending 31/12/1954 and 31/03/1955, respectively. The appellants in some of the cases, in pursuance of demand notices, submitted returns to the third respondent, the Superintendent of Taxes, in the prescribed form in respect of tea despatched and carried up to 30/09/1954, under protest. They also paid the tax demanded under protest. The appellants moved the High Court of Judicature in Assam under Art. 226 of the Constitution challenging the validity of the said Act and praying for the issue of a writ of mandamus directing the respondents to forbear from giving effect to be provisions of the Act and the notification issued under the Act and/or a writ of prohibition or any other appropriate writ restraining them from taking steps under the provisions of the Act. The appellants challenged the validity of the Act mainly on the grounds that (1) the Act, rules and the notifications under the Act were ultra vires the Constitution, because the Act was repugnant to the provisions of Art. 301 of the Constitution as the tax on carriage of tea through the State of Assam had the effect of interfering with the freedom of trade, commerce and intercourse; (2) that tea being a controlled industry under the provisions of the Tea Act, 29 of 1953, the Union Government alone had the power to regulate the manufacture, production, distribution or transport of tea and the jurisdiction of the Assam Legislature was thus completely ousted; (3) that the tax under the Act was nothing but a duty of excise, in substance, though not in form, and was thus an encroachment on the Central legislative field within the meaning of entry 84 of the Union List. The impugned Act was also challenged on the ground that it was discriminatory and thus void under Art. 14 of the Constitution. The competence of the Assam Legislature to legislate on the subject was also questioned.
(3.)The respondents opposed those petitions under Art. 226 of the Constitution in the High Court. It was denied by the State that the Act or the rules made thereunder or the notifications issued thereunder were ultra vires the Constitution or that the Act contravened the provisions of Art. 301 of the Constitution or that it was an encroachment on the sphere of the Union Legislature or was in any way in conflict with the provisions of the Tea Act 29 of 1953. The case of the respondents was that the Act was in pith and substance, a legislation to levy tax on certain classes and types of goods carried by road or inland waterways, strictly within entry No. 56 of the State List. It was also asserted that the Act was within the legislative competence of the Assam Legislature and was not within the terms of the prohibition contained in Art. 301 of the Constitution.