MITTER - (1.) ALL these appeals and Writ Petitions are directed against the Andhra Pradesh Motor Vehicles Taxation Act (V of 1963) and notifications issued thereunder. In the first group of appeals, the notification challenged is G O. Ms. No. 601Home (Transport II) Department dated 27/03/1963. In the second group of appeals Nos. 1439-1441/68 and in the two writ petitions the impugned notification is numbered as G. O. Ms. No. 435 Home (Transport II) Department dated 28/03/1968.
(2.) THE appellants and the writ petitioners all carry on transport business in the State of Andhra Pradesh under stage carriage permits granted by the Transport authorities under the Motor Vehicles Act IV of 1939. THEir complaint is 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. State of Andhra Pradesh. (1970) 2 SCR 52 = (AIR 1970 SC 1864). THE latest legislation on the subject which was before this Court in that case was the validating Act of 1961 raising the rate to Rs. 37.50 per seat per quarter per bus effective from 1/04/1962. 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 2/02/1963. 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 Section 3 (1) of the Act the State Government is empowered by notification from time to time. to direct that a tax shall be levied on every motor vehicle used or kept for use in a public place in the State. Under sub-section (2) of Section 3 the notification is to specify the class of motor vehicles on which, the rates for the periods of which and the date from which, the tax is to be levied. Under the proviso to the sub-section the rates of tax are not to exceed the maximum specified in column (2) of the First Schedule. Section 17 of the Act vests in the State Government power to amend the Schedules in the manner prescribed. On 27/03/1963 a notification No. G. O. M. 601 was issued by the State Government in its Transport Department imposing a tax of Rs. 60.00 per seat per quarter on vehicles running less than 100 miles per day and Rs. 67-50 on vehicles covering a higher mileage. A crop of writ petition was filed before the High Court in the year 1963 praying for the issue of a writ restraining the State from enforcing the provisions of the Act of 1963 and of the notification, dated 27/03/1963. By a common judgment and order dated 6/09/1963 the High Court dismissed all the writ petitions. The first group of appeals arises out of this judgment. It was contended on behalf of the petitioners before the High Court in that case, the appellants in the first group of appeals before us, that the statute was inconsistent with the doctrine of freedom of trade not commerce embodied in Part XIII of the Constitution and secondly that it infringed the equality clause enshrined in Art. 14. An attempt was made on behalf of the petitioners by reference to certain figures regarding the income of the State from this source of tax and the expenditure pertaining to this topic that the taxes were levied more for purposes of general revenue of the State than as a benefit for the facilities afforded to the operators of transport vehicles since the taxes were far in excess of the requirements for the construction of new roads and bridges and the maintenance of existing ones. The High Court found itself unable to accept the above submission and on a scrutiny of the budget estimates for the year 1963-64, the receipts under the Taxation Act, the amount collected by way of taxes on the sale of motor spirits allocable to this head, came to the conclusion that the whole revenue would not exceed Rs. 6 crores while the expenditure incurred would exceed Rs. 8.54.00.000.00. 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 Article 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 unberable 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 the increase in the fares sanctioned simultaneously with the raising of the taxes had proved beneficial to the operators. Reference was made to the fact that even subsequent to the enhancement of the tax there had been considerable competition for securing permits whenever any proposal was mooted by the transport authorities which according to the Court went to show that the operators themselves considered that it would be a profitable business. In the opinion of the High Court the increase in the taxes was more than offset by the sanctioned increase in the fares and the grievance of the operators that the taxes were an unreasonable restriction was negatived. Finally the High Court held that the impugned Act had survived the test laid down by Article 304 (b) of the Constitution and had not transgressed the limits of reasonableness.
(3.) IT is not necessary for the disposal of these appeals and writ petitions to go into the question of violation of Article 14 as that point was not canvassed in view of the decision of this Court in Nazeeria Motor Service case (1970) 2 SCR 52 = (AIR 1970 SC 1864) (supra). On 28/03/1968 the Government of Andhra Pradesh purported to amend the First Schedule to the Act by notification No. 434 by increasing the maximum quarterly tax in respect of sub-items (iii) and (iv) of item 4 to Rs. 121.00 in respect of buses plying exclusively within municipal limits and to Rs. 135.00 in the case of other buses. On the same day the State Government issued notification No. 435 in exercise of the powers conferred by sub-section (1) of Section 9 of the Act directing the substitution of higher taxes in respect of buses covered by the aforementioned sub-items of item 4 of the First schedule. The new notification No. 435 provided for different rates according to mileage; at the lower end of the scale i. e. for a distance of 50 miles per day the rate was Rs. 40.00 per quarter per seat while in the case where the distance exceeded 200 miles the tax was raised to Rs. 110.00 per seat per quarter. In effect, the petitioners contended, the incidence of tax was increased by about 50 per cent. It was also claimed that the procedure adopted for the levy of the tax had been changed and instead of a flat rate of levy on the basis of the number of seats it was now made to relate to the actual mileage per day covered by the vehicles. A challenge was made to the additional impost on spare buses which bus operators running more than a certain number of buses per day were obliged to reserved 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 Rs. 30.00 per seat per quarter.;