P.C. Verma, J.@mdashThe controversy involved in all these three writ petitions is similar and the validity of the provisions of Sections 5, 6 and 12
of the Uttaranchal Motor Vehicles Taxation Reforms Act, 2003 (hereinafter referred to as the Uttaranchal Act of 2003) is under challenge.
Therefore, all these writ petitions are being decided by one and common judgment.
2. In Writ Petition No. 923 of 2003, the petitioner has sought for issue a writ, order or direction in the nature of certiorari to declare Sections 5, 6
and 12 of the Uttaranchal Motor Vehicles Taxation Reforms Act, 2003 ultra-vires, unconstitutional and to struck down the same as well as
mandamus of this Court directing the respondents not to realize or recover any additional tax as per aforesaid provisions of the Uttaranchal Motor
Vehicles Taxation Reforms Act, 2003.
2.1. In Writ Petition No. 943 of 2003, the petitioner seeks a writ, order or direction in the nature of certiorari to declare Section 6 of the
Uttaranchal Motor Vehicles Taxation Reforms Act, 2003 ultra vires, unconstitutional and to struck down the same and a similar relief of mandamus
of the Court as in the first writ petition, mentioned above.
2.2. In Writ Petition No. 849 of 2005, the petitioners seek mandamus of this Court directing and commanding the respondents not to charge the
double taxes and the buses may not be stopped on the basis of non-payment of additional taxes for the route falling in the territory of the State in
addition to the relief of declaring Sections 5, 6 and 12 of the Uttaranchal Motor Vehicles Taxation Reforms Act, 2003 to be ultra vires,
unconstitutional and to struck down the same and as well as the other relief as sought for in the first two writ petitions.
3. The validity, legality and vires of Sections 5, 6 and 12 of the Uttaranchal Act of 2003 have been challenged by the petitioners on the grounds,
inter alia, that imposition of additional tax on Goods Carriage and Public Service Vehicles by Sections 5 and 6 of the Uttaranchal Act of 2003 is
beyond the legislative competence of the respondents and same is hit by Entry 56 & 57, List II of Schedule VII of Constitution of India. The
imposition of additional tax is ultra vires, unconstitutional and same is hit by Articles 246, 265 and 276 of the Constitution of India and also in
violation of Articles 14, 19 and 302 of the Constitution of India. A temporary holder who gets permit to lift the reserve party can not be asked to
pay tax for entire month, quarter or irrespective of the fact that vehicles will be on road for two and three days and irrespective of the fact that 50
seater vehicle in fact carrying less than 50 passengers. The tax as per Entry 56 List II Sch. VII of the Constitution of India can be on the basis of
actual passengers traveling and covering particular distance in a particular vehicle. No tax can be imposed under Entry 56 on the vehicle on the
basis of seating capacity alone.
4. The grounds are based on the facts that Section 67 of Motor Vehicles Act, 1988 empowers the State Government to fix the fare and freight for
stage carriages and contract carriages. Before the appointed day i.e. 9-11-2000, State of U.P., while exercising powers u/s 67 of the Motor
Vehicles Act, 1988, vide notification No. 711/ 30-4-2000-346/95 dated 10-3-2000, fixed fares for Public Service Vehicles. After the appointed
day State of Uttaranchal has adopted same rates of fares and no change has been made thereunder till day. Article 265 of Constitution of India
says that no tax shall be levied or collected except by authority of law. However, Article 246(3) of Constitution of India gives power to the State
Government to legislate about the imposition of tax in respect of any matter enumerated in List II in the 7th Schedule of the Constitution. Schedule
VII List II Entry 57 empowers the State Government to impose tax on vehicles. By exercising this power State Government may impose tax on
the vehicles to be plied within its territory. It is stated that imposition of tax as defined and prescribed u/s 4 of the Uttaranchal Act of 2003 was
within the competence of State Government in view of Section 246(3) and Entry 57 List II of Schedule VII of the Constitution. However,
''additional tax'' as defined in Section 2 (a) and imposed by Sections 5 & 6 of the Uttaranchal Act of 2003 on the Goods and Passenger Vehicles
is Illegal and without any legislative competence. It is also stated that Uttaranchal Act of 2003 nowhere defined the basic feature of additional tax.
Section 2 (a) only says that additional tax means tax imposed under Sections 5 & 6 in addition to tax imposed in Section 4. Entry 57 List II of Sch.
VII of the Constitution of India does not give any authority to State Government to impose any additional tax. It is also stated that once u/s 4 of the
Uttaranchal Act of 2003 tax is imposed on vehicles by exercising powers under Entry 57 List II Schedule VII, then there can be no valid or
Justified reason to impose additional tax, under Sections 5 & 6 of the Uttaranchal Act of 2003 on same vehicles once again exercising powers
under Entry 57 List II Schedule VII of the Constitution of India.
5. The respondents contended in the counter-affidavit that prior to enforcement of the Uttaranchal Act of 2003, the U.P. Motor Vehicles Taxation
Act, 1997 was applicable in the State of Uttaranchal as well which has been repealed vide Section 30 (1) of the Uttaranchal Act of 2003. It is also
contended that the said Uttaranchal Act of 2003 and the U.P. Motor Vehicles Taxation Act, 1997 stands on similar footings and they are basically
similar enactments. The respondents also contended that from the statement of objects and reasons of the U.P. Motor Vehicles Taxation Act,
1997 it is revealed that the said U.P. Act is an amalgamation of three enactments, namely, (i) The United Provinces Motor Vehicles Act, 1935, (ii)
The U.P. Motor Gari (Yatrikar) Adhiniyam, 1962 and (iii) The U.P. Motor Gari (Mal Kar) Adhiniyam, 1964 which provided for the levy of Road
Tax, Passenger Tax and Goods Tax respectively. It appears from the statement of objects and reasons of the aforesaid U.P. Act of 1997 that the
question regarding enactment of a composite law for levy of collection of all taxes on Motor Vehicles was considered by the U.P. Taxation
Enquiry Committee and the U.P. Review Committee. The aforesaid U.P. Motor Vehicles Taxation Act, 1997 which is a composite law for levy
and collection of all the taxes on motor vehicles, was enacted with a view to rationalize taxes on motor vehicles and streamline the administration
thereof and to establish the Road Transport Accident Relief Funds so as to provide relief to the passengers or other persons suffering from
casualty in the accidents in which Public Service Vehicles are involved. It is also contended that the constitutional validity and the legislative
competence of State legislature regarding the aforesaid U.P. Motor Vehicles Taxation Act, 1997 was challenged before the Allahabad High Court
in Writ Petition No. 280 of 1999 H.C. Mishra and Ors. v. State of U.P. and Ors. reported in 2000 All LJ 2627 and Writ Petition No. 169 of
1999, P. Singh and Ors. v. U.P. and Ors. and the Allahabad High Court upheld the constitutional validity of the U.P. Motor Vehicles Taxation
Act, 1997. It is also contended that it is clear from the Uttaranchal Act of 2003 as well as the Uttar Pradesh Motor Vehicles Taxation Act, 1997
that only the discrepancies regarding the rates of tax have been removed by the State of Uttaranchal by enacting the said Act. It is also contended
that in the earlier U.P. Motor Vehicles Taxation Act, 1997 Section 0 provided for rates of quarterly additional tax for stage carriages for as many
as 8 slabs. However, the State of Uttaranchal has amended the earlier provisions and it has been provided in the 4th Schedule u/s 6 of the Act that
upto 4500 kms. quarterly distance amount of quarterly additional tax or every type of classified routes will be Rs. 154.00 per seat for plain routes
and Rs. 146.00 per seat for hill routes. For each kilometer exceeding 4500 kms. Rs. 0.04 per seat per km. will be added to the amount of
additional tax payable for distance of 4500 kms. Similarly, by the rates of additional tax under Clause 1(b) (i) of the 4th Schedule in the earlier
U.P. Act of 1997 have been modified from Rs. 135 to Rs. 200 in the Act in question and no change has been made in the rate under Clause 1(b)
(ii). Apart from the aforesaid modification regarding the rates of additional tax the rates of additional tax has already been prescribed for vehicles
which are found plying without permits and specific provision has been made in the Act regarding the rates of additional tax for vehicles plying on
contract permit/special permits. It may be pointed out that in the earlier U.P. Motor Vehicles Taxation Act, 1997 for passenger vehicles plying
without permit additional tax was recovered at the rate of 25% more than the additional tax payable by the contract carriage vehicles. In the State
of Uttaranchal it has been provided that vehicles plying without permit or plying on special temporary permit will have to pay additional tax for one
month at the rate of additional tax payable by the contract carriage vehicles. Moreover, in the earlier U.P. Motor Vehicles Taxation Act, 1997 in
Clause 5 of the 4th Schedule there was a huge difference between the rates of additional taxes for taxi cab and maxi cab. The petitioners have no
ground available to assail the vires of the Act.
6. We have heard Sri Alok Singh, learned senior Advocate assisted by Sri Tribhuwan Phartiyal, Sri Tanuj Semwal Advocates on behalf of the
petitioners, Sri K.P. Upadhyay, learned Standing Counsel for the State of Uttaranchal and Smt. Bina Pande, learned Standing Counsel for the
State of U.P./respondents.
7. So fars the vires of Section 6 of Uttaranchal Act of 2003 is concerned, the same stands settled in view of the Apex Court Judgment in the case
of "" Travancore Tea Estates Co. Ltd. and Others Vs. State of Kerala and Others, . wherein similar provision was considered and the Hon''ble
Apex Court upheld the imposition of tax to be in conformity with the powers of the State Legislature under Entry 57, List II of Seventh Schedule
of the Constitution. We further find support from the view taken by the Allahabad High Court in the matter referred to hereunder,
8. A similar enactment was enacted in the State of Uttar Pradesh, named as U.P. Motor Vehicles Taxation Act (Act No. 21 of 1997), the
provisions of which were amended in the year 2001 and vires of Section (1-A) of the said Act including the amendment of 2001 was challenged
before the Allahabad High Court in the case of Smt. Vidya Gupta and Others Vs. State of Uttar Pradesh and Others, . While dealing with the
matter, it was observed in paragraph No. 9 as under:
While submissions of the learned Counsel for the petitioners have already been stated in the foregoing paragraphs of this judgment, it was
contended by the learned Advocate General that the amended provision (1-A) of the Act is perfectly within the four corners of the legislative Entry
57 of List II of the Seventh Schedule of the Constitution. He drew our attention to Travancore Tea Estates Co. Ltd. and Others Vs. State of
Kerala and Others, and contended that similar provision contained in Kerala Motor Vehicles Taxation Act (24 of 1963) came up for consideration
before the Apex Court wherein while explaining the use of the expression ''vehicle used or kept for use'', the Apex Court upheld the levy to be in
conformity with the powers of State Legislature under Entry 57, List II of Seventh Schedule of the Constitution. It was specifically observed by the
Apex Court that the said provision safeguard the revenue of the State by relieving it from the burden of providing that the vehicle was used or kept
for use on the public roads of the State and at the same time, the interest of bona fide owner is safeguarded by enabling him to claim and obtain a
certificate of non user from the prescribed authority. He further contended that so far as this State is concerned, in the Act, in question, safeguards
are provided u/s 12 of the Act read with Rule 22 of the U.P. Motor Vehicles Taxation Rules, 1998. He also brought to our notice that validity of
Section 6 of the Act has already been upheld in H.C. Mishra v. State U.P. 2000 ALJ 2627. Sections 5 and 6 of the Act clearly provide that every
motor vehicle falling within the purview of liability to tax u/s 4 is liable to pay additional tax. In support of this contention, he placed implicit reliance
on the decisions in Ms. Sundaram Finance Ltd. Vs. Regional Transport Officer and another, COMMISSIONER OF Income Tax, PATIALA Vs.
PIARA SINGH. [1971] 82 I. T. R. (SH. N.) 27., affirmed in Commissioner of Income Tax, Patiala Vs. Piara Singh, . In C.I.T. v. Piyara Singh it
has been held that illegal business and income from such business is liable to tax.
9. So far as Section 4 of Uttaranchal Act of 2003 is concerned, it is clear from the language of Sub-section (1) of Section 4, viz. ""no motor vehicle
other than a transport vehicle, shall be used in any public place in Uttaranchal unless a one-time tax at the rate applicable in respect of such motor
vehicle, as specified in Part ''B'' of the First Schedule has been paid in respect thereof clearly shows that this is ''tax on the passenger motor
vehicle''.
10. So far as the provision of Section 4(1) is concerned it is a tax on the passenger motor vehicle, while tax is on transport vehicle, which is used in
any public place, therefore, Sub-clause (1) and (2) of Section 4(1) both have been enacted under Entry 57 aforesaid, which refers to a tax on
vehicle. The word ''vehicle'' has to be construed to give a wider meaning, so as to include the passenger motor vehicle and transport vehicle, i.e.
goods carrier.
11. Section 5(1) of Uttaranchal Act of 2003 is a charging Section for levy and collection of additional tax in addition to the tax payable u/s 4,
therefore, this enabling legislation is also under Article 246 read with Entry 57, List II of Seventh Schedule. The Apex Court in the case
Travancore Tea Estates Co. Ltd. and Others Vs. State of Kerala and Others, has upheld the imposition of additional tax under Entry 57 payable
u/s 6 of the Kerala Motor Vehicles Taxation Act and relying on the said verdict, the Allahabad High Court also upheld the imposition of additional
tax under the Utter Pradesh Motor Vehicles Taxation Act, 1997 as amended in 2001. The validity of imposition of additional tax under Entry 57 of
List II of the Seventh Schedule of the Constitution stands upheld, by which the additional tax has been imposed in addition to the tax payable u/s 4,
therefore, for the same reasoning, there is no scope to raise a ground to challenge the validity of Section 5, by which the additional tax is to be
charged on the transport vehicle in addition to tax u/s 4. We are of the considered view that the ''additional tax'' is included in the meaning of tax
and it is not a double taxation.
12. Learned Counsel for the petitioners further submitted that the imposition of additional tax is double taxation. This argument of the learned
Counsel for the petitioners is misconceived. Under Entry 57 of List II of the Seventh Schedule of the Constitution, it was open for the legislatures
to have imposed the ''tax'' provided u/s 4 plus right of imposition of tax as provided under Sections 5 and 6 of Uttaranchal Act of 2003. What has
been done in that by inserting two Sections, additional tax has been imposed, which is covered in the incidental power of the Legislation to impose
''additional tax'' in addition to the tax already imposed under Article 246 read with Entry 57 of List II of the Seventh Schedule. The Apex Court in
the case of Jai Prakash v. State of U.P. (2004) 13 SCC 390 has held inter alia in paragraph 13 wherein there is a reference of the case State of
Gujarat and Others Vs. Akhil Gujarat Pravasi V.S. Mahamandal and Others, as under:
There is no material difference with the statutory provisions being construed by us. Sections 4 and 6(1) both provide for the user of vehicles,
although the word used in Section 6(1) is ""operate"". Sub-section (1-A) of Section 6 deals with those vehicles which are ""kept for use"". In these
circumstances, finding a parity in the nature of the tax levied, we see no reason not to follow the reasoning of this Court in Akhil Gujarat Pravasi
Case and to hold that the present Act is referable to Entry 57 of List II and not Entry 56.
13. Learned Counsel for the petitioners further submitted that the statement of object and reasons should be taken aid of in the construction of
these provisions. It is settled law that the statement of object and reasons are taken into aid for construction of a provision when there is any
ambiguity. On the other hand, on a plain reading of the Sections, as it stands there is no ambiguity at all and the legislature was fully competent to
impose the tax as well as the additional tax under Article 246 read with Entry 57 of List II of the Seventh Schedule of the Constitution of India. It is
settled law that entries should be given wider and liberal meaning. Here we are also giving wider and liberal meaning to the word ''taxation on
vehicle'' and it includes the tax and additional tax both on the vehicles.
14-15. Learned Counsel for the petitioners have relied upon the case of M.P.A.I.T. Permit Owners Assn. and Another Vs. State of Madhya
Pradesh, and argued that there is no Presidential assent for the present enactment enacted by the Government of Uttaranchal, known as ""The
Uttaranchal Motor Vehicles Taxation Reforms Act, 2003"". The submission of the learned Counsel for the petitioners is that the taxation under
Entry 57 aforesaid is subject to the provisions of Entry 35. List III, therefore, the Presidential assent is essential for want of which the Act under
challenge is ultra vires. It was further contended that u/s 67(1)(d) of the Motor Vehicles Act, 1988, the tax payable by the passengers or
consigners is inclusive of fares and freight. The relevant extract of the said Section is being reproduced below:
67. Power to State Government to control road transport. (1) A State Government, having regard to--
(a) the advantage offered to the public, trade and industry by the development of motor transport,
(b) the desirability of co-ordinating road and rail transport.
(c) the desirability of preventing uneconomic competition among holders of permits, may from time to time, by notification in the Official Gazette,
issue directions both to the State Transport Authority and Regional Transport Authority:
(i) regarding the fixing of fares and freights (including the maximum and minimum in respect thereof) for stage carriages, contract carriages and
goods carriages:
xxx xxx xxx
16. From a plain reading of the aforesaid provisions of Section 67 it is evident that this provision has given to the State Government powers as
contained under Clauses (a) (b) (c) and (d) (i) for fixing the fares and freights including the maximum and minimum in respect thereof for the stage
carriages, contract carriages and goods carriages and for that purpose directions are to be issued, by Notification in the Official Gazette, to the
transport authorities including the Regional Transport Authority.
17. Learned Counsel for the petitioners have given main emphasis to the provisions of Sub-section (2) of the said Section that fares and freight,
which are fixed by the State Government on the contract carriages and goods carriages may provide that such fares or freights shall be inclusive of
the tax payable by the passerigers or the consignors of the goods. We have perused the provisions of Sub-section (2), which is detailed below:
(2) Any direction under Sub-section (1) regarding the fixing of fares and freights for stage carriages, contract carriages and goods carriages may
provide that such fares or freights shall be inclusive of the tax payable by the passengers or the consignors of the goods, as the case may be, to the
operators of the stage carriages, contract carriages or goods carriages under any law for the time being in force relating to tax on passengers and
goods.
18. The concluding lines of the said provision specifically refers to the tax on passengers and goods and this provision does not refer to Entry 56,
but the learned Counsel for the petitioners insisted that this power can be conferred under Entry 57 and not under Entry 56. So far as the argument
of the learned Counsel is concerned, if it is accepted as such, then tax payable under Sub-section (2) will be covered by Entry 56 and not under
Entry 57 aforesaid. Entry 56 is independent entry, which is not subject to Entry 35 of List III of the Seventh Schedule.
19. Learned Counsel for the petitioners Sri Alok Singh, Sr. Advocate, has sought to challenge the validity on the ground that it is a tax on the
operator, therefore it is tax on income and the said legislation is not competent to impose tax on income, as the income is the subject-matter of List
I of Schedule VII. This argument too is misconceived. A bare perusal of Sections 5 and 6 of Uttaranchal Act of 2003 clearly shows that the tax is
on the vehicle and it is not any income either of the owner or any passenger or goods consignor.
20. So far as the contention of the learned Counsel for the petitioners regarding assent of the President on the ground that Entry 57 is subject to the
provisions of Entry 35 of List III is concerned, no repugnancy of these provisions/Sections could be pointed out by the learned Counsel for the
petitioner so as to attract the provision of Clause (2) of Article 254 of the Constitution of India, which requires the assent of the President on a
Legislation made by the State, where on the same topic the Central Legislation exists. Section 67 of the Motor Vehicles Act 1988 does not touch
the tax imposed by this enactment in any manner. We are of the view that the provision of Section 67 is entirely different altogether, which is clear
from its language, therefore, since the field is unoccupied, there is no need to seek the assent of the President for which the present Legislation has
been enacted by the Legislators under Article 246 read with Entry 57 of List II of Seventh Schedule.
21. It is settled law as held by the Hon''ble Supreme Court in the case of State of Andhra Pradesh and others, etc. Vs. McDowell and Co. and
others, etc., that ""Legislative competence of State Legislature Text to determine--Pith and substance rule--By applying that rule once a legislation
exclusively falls under any of the entries in List II of Sch. VII, Parliament''s competence is excluded and State''s competence cannot be challenged
on the ground that State''s power under Clause (3) of Article 246 is subject to Parliament''s power under Clauses (1) and (2) thereof. Even if by
applying that the State legislation falls under List III, it would be valid so far as Central legislation, if any, is not in conflict with it. Any incidental
trenching would not amount to encroachment upon the field covered by Parliament.
22. Learned Counsel for the petitioners have challenged Sub-section (4) of Section 12 only of Uttaranchal Act of 2003 on the ground that if the
permit holder has plied a vehicle only for one day, he might have to pay the tax for whole one month period. It does not come out from the said
provision of Sub-section (4) of Section 12, which has given criteria for calculating the amount of refund under Sub-section (3) and it is provided
that for that purpose any portion of the period being less than a calendar month, the same shall not be taken into account. Thus, the argument of the
learned Counsel for the petitioners on this count is misconceived, as it is a provision for the refund and not for the collection of the tax.
23. It is abundantly clear from the perusal of the Act as well as the Uttar Pradesh Motor Vehicles Taxation Act, 1997 that only the discrepancies
regarding the rates of tax have been removed by the State of Uttaranchal by enacting the Uttaranchal Act of 2003. There is only difference on the
rates. Fixation of rate cannot be made the basis of challenging the validity of the Act.
24. In Writ Petition No. 849 of 2005, learned Counsel for the petitioner Sri S.K. Mandal submitted that the petitioner was permitted to ply his
vehicle from 12-1-2004 till date but for the reasons that the petitioners have not paid the additional tax, he was prohibited to ply his vehicle. In the
facts and circumstances of the case, we provide that in case the petitioners pay the additional tax, they may be permitted to ply the vehicle under
the Uttaranchal Act and relating to the payment of tax from the period for which they were not permitted to ply the vehicle, the petitioners may
make a representation to the Taxation Authority, who will take a decision in accordance with law.
25. For the reasons recorded above, all these petitions are devoid of merit and are dismissed accordingly.
