The Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan & Others (1962)

Case Summary: The Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan & Others (1962)

(1962) 04 SC CK 0016

In The Supreme Court of India

Case No : Appeal (Civil) 42 of 1959

The Automobile Transport (Rajasthan) Ltd. APPELLANT
Vs
The State of Rajasthan and Others RESPONDENT

Date of Decision : 09-04-1962

Acts Referred:
Constitution of India, 1950 — Article 1, Article 19(1), Article 132, Article 248, Article 265, Article 276, Article 285, Article 287, Article 288, Article 301, Article 302, Article 303, Article 304
Rajasthan Motor Vehicles Taxation Act, 1951 — Section 11, Section 4
Rajasthan Motor Vehicles Taxation Rules, 1951 — Rule 23
Constitution (Seventh Amendment) Act, 1956 — Section 29

Citation : AIR 1962 SC 1406 : (1963) 1 SCR 491

Hon'ble Judges : S. K. Das, J ; N. Rajagopala Ayyangar, J ; M. Hidayatullah, J ; K. Subba Rao, J ; J. R. Madholkar, J ; J. L. Kapur, J ; A. K. Sarkar, J

Bench : Full Bench

Advocate : G. C. Kasliwal

Final Decision : Overruled

[Judgment Source] https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=272386

Facts of the Case

The appellants were transport operators plying vehicles between Ajmer and Rajasthan territories.
They challenged the validity of the Rajasthan Motor Vehicles Taxation Act, 1951,
claiming it violated Article 301 of the Constitution by imposing restrictions on free trade, commerce, and intercourse.
The Rajasthan High Court upheld the Act, holding the tax's effect on trade was indirect and permissible.

Law Points Raised

1. Whether the Rajasthan Motor Vehicles Taxation Act, 1951 violates the freedom of trade, commerce, and intercourse under Article 301.
2. Whether such taxation can be justified under Article 304(b).
3. Distinction between direct and indirect restrictions on trade.
4. Whether regulatory taxation for road maintenance constitutes an infringement of Article 301.

Acts / Provisions / Articles Referred

- Constitution of India, 1950 — Articles 1, 19(1), 132, 248, 265, 276, 285, 287, 288, 301, 302, 303, 304
- Rajasthan Motor Vehicles Taxation Act, 1951 — Sections 4, 11
- Rajasthan Motor Vehicles Taxation Rules, 1951 — Rule 23
- Constitution (Seventh Amendment) Act, 1956 — Section 29

Judgments Referred

- Atiabari Tea Co. Ltd. vs State of Assam (1961)

Obiter Dicta

Regulatory measures such as taxation for road upkeep are not necessarily a restriction on trade under Article 301,
unless the tax is so excessive that it directly impedes trade.

Ratio Decidendi

A tax that is regulatory in nature and intended for public welfare, such as road maintenance,
does not violate the freedom of trade and commerce under Article 301,
unless proven to be directly restrictive.

Final Ruling

The Supreme Court upheld the Rajasthan Motor Vehicles Taxation Act, 1951,
holding that the taxation was regulatory and did not violate Article 301.
The appeal was dismissed.

Summary

The case clarified the scope of Article 301, distinguishing between direct restrictions on trade
(which are unconstitutional unless saved by Article 304(b))
and indirect, regulatory measures (which are permissible).
The Rajasthan Motor Vehicles Taxation Act, 1951 was upheld as a regulatory tax for road maintenance,
not as a direct impediment to trade.