VENKATARAMIAN - (1.) IN these writ petitions filed under Art. 32 of the Constitution, the petitioners have challenged the constitutional validity of Section 3 of the Punjab Motor Vehicles Taxation Act, 1924 (Act No. 4 of 1924) (hereinafter referred to as "the Act") as amended by the Punjab Motor Vehicles Taxation (Amendment) Act, 1981 (Punjab Act No. 13 of 1981) and the Notification dated 19/03/1981 issued by the Government of the State of Punjab under Section 3 (1) of the Act.
(2.) THE petitioners are owners of motor vehicles and are carrying on the business of running stage carriages in the State of Punjab. While the operation of the stage carriage services run by the petitioners is controlled by the provisions of the Motor Vehicles Act, 1939, which is a Central Act, they are liable to pay taxes on the motor vehicles owned by them under the Act. THE Act is a pre-Constitutional one. After the Constitution came into force, the power to levy taxes on goods and passegers carried by road or on inland waterways and the power to levy taxes on vehicles, whether mechanically propelled or not suitable for use on roads including tramcars, subject to the provisions of Entry 35 of List III of the Seventh Schedule to the Constitution are assigned to the States respectively by Entries 56 and 57 of List II of the Seventh Schedule to the Constitution. While the Act is traceable to Entry 57, the Punjab Passengers and Goods Taxation Act, 1952 is enacted by the State Legislature in exercise of its legislative power granted under Entry 56. Before the commencement of the Constitution, S. 3 (1) of the Act which is the charging section reads as follows : "3. (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, first day of July, first day of October and the first day of January at the rate specified in the schedule to this Act." The above provision was amended in 1954 by providing that the rates of tax levied under the Act were those specified by the State Government in a Notification to be issued by it, subject however to the maximum limit fixed by the Act, instead of the rates of tax specified by the State Legislature itself in the Schedule to the Act. After that amendment, Section 3(1) read thus : "3 (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, first day of July, first day of October, and the first day of January at such rates not exceeding Rs. 2200.00 per vehicle for a period of one year as the State Government may by notification direct." (Emphasis added) The maximum limit of Rs. 2200.00 mentioned in Section 3(1) was increased by successive legislative amendments to Rupees 2750/- in 1963, to Rs. 4,200.00 in 1965, to Rupees 10,000/- in 1970 and to Rs. 20,000.00 in 1978. In exercise of the power conferred on it, the State Government fixed the rate of tax in the case of stage carriages at Rs. 75.00 per seat in 1965, at Rs. 100.00 per seat in 1970 and at Rs. 200.00 per seat in 1974, subject to the maximum prescribed by the Act. On 31/03/1978, the State Government issued a Notification providing that on and after 1/04/1978, every stage carriage plying in the State of Punjab should pay tax at Rs. 275.00 per seat where it operated up to 125 kilometers a day and Rs. 300.00 per seat where it operated for more than 125 kilometers subject to a maximum of Rs. 20,000.00 per year in both the cases. Then came the Amending Act in 1981 by which the maximum limit prescribed in S. 3(1) of the Act was raised to Rs. 35,000.00 retrospectively with effect from 1/10/1980. Section 3 of the Amending Act inserted a new section in the Act being Section 3-A of the Act which authorised the State Government to issue a Notification under Section 3 (1) raising the rates of tax retrospectively with effect from 1/10/1980. After the amendment in 1981, Section 3 (1) of the Act reads thus : "3 (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April first day of July, first day of October and the first day of January at such rates not exceeding Rupees 35,000/- per vehicle for a period of one year, as the State Government may by notification direct."
(3.) PURSUANT to the above section, as amended in 1981, and the newly inserted Section 3-A of the Act which conferred power on it to raise the rates of tax under the Act with effect from 1/10/1980, the State Government issued the following Notification on 19/03/1981 : "DEPARTMENT OF TRANSPORT NOTIFICATION The 19/03/1981. No. S. O. 15/P.A.4/24/S.3/Amd/81 - In exercise of the powers conferred by sub-section (1) of Section 3 read with Section 3-A of the Punjab Motor Vehicles Taxation Act, 1924 (Punjab Act No. 4 of 1924) and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make the following amendment in the schedule appended to the Punjab Government, Transport Department Notification No. S.O./ 50/P.A./4/24/S. 3/71 dated the 10/11/1971 with effect from the Ist October, 1980 namely : AMENDMENT In the said schedule against serial No. 5 for item (i) and entries relating thereto, the following item and entries shall be substituted, namely : JUDGEMENT_237_3_1983Html1.htm SADA NAND Secretary to Government, Punjab Department of Transport." The final position that emerged after the above Notification was that every stage carriage plying for hire and used for the transport of passengers (excluding the driver and conductor) had to pay per year Rs. 500.00per seat subject to a maximum of Rupees 35,000/- irrespective of the distance over which it operated daily.;