vil Appeal Nos 338 and 339 of 1981
From the Judgment and Order dated 2371980 of the Gujarat High Court in SCA Nos
405 of 1979 and 1263 of 1978
Soli J Sorabjee NA Palkhiwala Lalit Bhasin Bina Gupta SS Shroff Mrs PS Shroff Ms Malvika Rajkatia RF Nariman PH Parekh Sanjay Bhartari MKS Menon RK Dhillon Ms Rohini Chhabra Ms Sunita Sharma Ms Ayesha Misra Harish N Salve and Mukul Mudgal for the Appellants
K Parasaran Attorney General B Datta Additional Solicitor General PS Poti GA Shah Dr V Gauri Shan kar SK Dholakia V Jagannatha Rao K Sudhakaran Ms A Subhashini BB Ahuja HK Puri A Subba Rao AS Bhasme KR Nambiar MN Shroff M Veerappa R Mohan R Ayyamperumal and JP Misra for the Respondents
The Judgment of the court was delivered by VENKATACHALIAH J
In these civil appeals and writ petitions the constitutional validity of legislations of different States viz State of Gujarat State of Tamil Nadu State of Karnataka and State of West Bengal imposing a tax on luxuries  under Entry 62 of List II of VII Sched ule to the Constitution of India is challenged
899 Civil Appeal Nos 338 and 339 of 1981 writ petition Nos 7990 9119 8338 8339 of 1981 relate to the challenge to the legislation of the State of Gujarat viz the Gujarat Tax on Luxuries Hotels  Lodging Houses Act 1977
Writ Petition No 162 of 1982 pertains to the corresponding legislation of the State of Tamil Nadu viz Tamil Nadu Tax on Luxuries in Hotels  Lodging Houses Act 1981
Writ petition Nos 1271 and 1272 of 1982 pertain to the challenge to corresponding Karnataka Legislation viz the Karnataka Tax on Luxuries Hotels and Lodging Houses Act 1979
WP No 5321 of 1985 pertains to the challenge to West Bengal Entertainments and Luxuries Hotels and Restaurants Tax Act 1972
All these taxingstatutes except for certain aspects individual to them are analogous and the scheme of the legislation is substantially similar
The variations are in the differences in the criteria of classification of the hotels to which the Act is applied and the rates of taxes
The grounds of challenge are substantially the same
An examination of the contentions urged in support of the challenge to one statute would cover the cases of the other statutes as well
We might take up for consideration the provisions of the Gujarat Act which may be considered as representative of the legislations on the topic
The constitutional validity of the Gujarat Act had been assailed before the High Court of Gujarat which by its judgment dated 2371980 upheld its constitutional validity
The judgment of the High Court is under appeal in CA Nos 338 and 339 of 1981
The statement of objects and reasons in the Gujarat Legislative Bill states With a view to augmenting the financial resources of the State it is pro posed to levy a tax on luxury provided in hotels and lodging houses at the rate of certain percentages of lodging charges recov ered by the proprietors of such hotels and lodging houses from persons lodging therein
Every accommodation provided in a hotel or lodging house the charges for which are not less than rupees thirty five per day per person is for the purposes of the tax to be treated as a luxury
This bill seeks to achieve that object
 Section 2 is the interpretation clause and defines inter alia the expressions charges for lodging hotel luxury provided in hotel proprietor occurring in clauses a d e and g respectively
The definitions are as follows 900 a charges for lodging include charges for airconditioning telephone tele vision radio music and extra beds and the like but do not include any charges for food drink or other amenities
d hotel means a building or part of a building where lodging accommodation with or without board is by way of business pro vided for a monetary consideration and in cludes a lodging house e luxury provided in a hotel means accommodation for lodging provided in a hotel the rate of charges for which including charges for airconditioning telephone tele vision radio music or extra beds and the like but excluding charges for food drink and other amenities is not less than thirty five rupees per person per day
 Section 3 is the charging section which pro vides 3
1 Subject to the provisions of this Act with effect on and from the date on which this Act comes into force there shall be levied and collected from every person a tax to be known as luxury tax in respect of any luxury provided to him in a hotel at the following rates namely a Where the charges for 10 per cent of such charges
lodging are thirty five rupees or more but not more than fifty rupees per day per person
b Where the charges for Rs5 plus 20 per cent of lodging are more than such charges in excess of fifty rupees but not more Rs50 per person per day
than one hundred rupees per day per person
c Where the charges for Rs 15 plus 30 per cent lodging are more than one of such charges in excess of hundred rupees per day Rs 100 per person per day per person
901 Provided that where charges for lodging are levied otherwise than on daily basis or person then for the purpose of determining the tax liability of any person under this section the charges shall be computed as for a day and per person based on the period of lodging for which charges are payable and the number of persons actually lodging or permitted to lodge according to the rule or custom of the hotel Provided further that where any charges for lodging are paid by any person other than a citizen of India in any foreign exchange then such person or where such charges are paid by any person or class of persons as the State Government may by order direct such as foreigners staying as guests in India of any Government or of any Corporation or Company owned or controlled by Government or such other person as in the opinion of the State Government it is expedient in the public interest to exempt then such person or per sons shall be exempt from the payment of the tax
2 Where luxury is provided in a hotel to representatives or employees of any company and charges for such luxury are to be borne by the company there shall be levied and col lected the tax from such company
Explanation In this sub section Company means any body corporate and includes a firm or other association of persons
3 The tax payable under this section shall be collected by the proprietor and be paid into a Government treasury within the time and in the manner provided in the Act
4 In computing the amount of tax payable under this section the amount shall if it is not a multiple of five paise be increased to the next higher multiple of five paise
 Section 4 provides for the mode of collecting of tax
It provides 4
1 Where the rate of charges for luxury provided in a hotel is inclusive of the charges for food or drink or other amenities if any being amenities referred to in clause e 902 of section 2 then the Collector may from time to time after giving the proprietor an opportunity of being heard fix separate rates of charges for such luxury and for food or drink or other amenities if any being ameni ties referred to in clause e of section 2 for the purpose of calculating the tax under this Act
2 Where in addition to the charges for luxury provided in a hotel service charges are levied and appropriated to the proprietor and not paid to the staff then such charges shall be deemed to be part of the charges for luxury provided in the hotel
3 Where luxury provided in a hotel to any person not being an employee of the hotel is not charged at all or is charged at a conces sional rate then also there shall be levied and collected the tax on such luxury as if full charges for such luxury were paid to the proprietor of the hotel
4 Where luxury provided in a hotel for a specified number of persons is shared by more than the number specified then in addition to the tax paid for luxury provided to the specified number of persons there shall be levied and collected separately the tax in respect of the charge made for the extra persons accommodated
5 Where any proprietor fails or neglects to collect the tax payable under this Act the tax shall be paid by the proprietor as if the tax was recovered by the proprietor from the person to whom the luxury was provided and who was accordingly liable to pay the same
 Section 5 6 7 8 9 and 10 respectively refer to the returns to be filed by every proprietor liable to pay tax under the Actthe assessment and collection of tax the imposition of penalty the payment of tax and penalty appeals and revision
Sections 13 and 14 speak of offences and offences by companies
15 pertains to the compounding of offences
17 confers power of inspection of accounts and docu ments and of search and seizure
21 confers the power to make Rules
903 4
The Gujarat Act seeks to levy a tax at certain per centages of the lodging charges recovered by the proprietors of the hotels and lodging houses from persons lodging there in treating the lodgingaccommodation for which charges of Rs35 or more per day per person as a taxable luxury
The scheme of the West Bengal Act is slightly different in regard to the scope of the charge to be given effect to under that Act 
The levy there is not confined to the lodging charges recovered from persons lodging in the ho tels but on the basis of the provision for luxury and not as in the case of the other legislation as the lodging charges actually paid by the lodgers
Section 4 of the West Bengal Act provides 4
Liability for luxury tax
There shall be charged levied and paid to the State Govern ment a luxury tax by the proprietor of every hotel and restaurant in which there is provi sion for luxury and such tax shall be calcu lated a in the case of a restaurant at the rate of an annual sum of rupees three hundred for every ten square metres or part thereof in respect of so much of the floor area of restaurant which is provided with X X luxury and b in the case of a hotel at such rate not exceeding fifteen per centum on the daily charges of a room provided with luxury as may be notified by the State Government in the Official Gazette
 One of the contentions which is peculiar to the West Bengal Act is that the impost on the mere possibility of enjoyment of a luxury  cannot be taxed
We have heard Shri Soli J Sorabjee Senior Advocate Shri F Nariman Shri Harish Salve Advocates for petition ers and Shri PS Poti and Shri Shah learned Senior Advo cates for the respondents
On the contentions urged at the hearing in support of the challenge the following points arise for consideration a The Taxation Entry 62 of List 1I providing for taxes on luxuries contemplates and takes within its sweep a tax on goods and articles in their aspect and character as luxuries and 904 dose not include services or activities
The levy on the services for lodging provided at the hotels is therefore beyond the scope of Entry 62 List II
b Section 4 of the West Bengal Act which envisages a tax on the mere existence of the means of providing the luxury independently of its utilisation is outside Entry 62 List II
c The real criterion distinguishing luxury  is the special attribute or quality of the commodity or the serv ices as the case may be and not the price factor simplic iter
The essential distinguishing attribute is a qualita tive one
Distinction based purely on the quantitative difference in the price is not a rational criterion to identify luxuries 
The impost based on the mere criterion of price which has no relation to the concept of luxuries is ultra vires the State power under Entry 62 List II
d The scheme of the Act in so far as it makes the price and not quality the sole basis for identification of the subject of the tax makes no distinction between the components of the services which include both necessities and comforts as distinguishable from luxuries 
Levy on such composite subject matter is bad
e The expression and the like  in the definition of charges for lodging in sec 2a is vague and irration al and read with the explanation which renders the decision of the State Government on what constitutes lodging charges final is an unreasonable restriction violative of Article 191g
f Sec
43 which provides that tax in respect of accommodation provided free or at concessional rates be taxed as if the full charges were deemed to have been re ceived is unreasonable and offends Article 191g
g The luxury tax imposed on the charges for lodg ings has the direct and immediate effect of restricting the freedom under Article 301 of the Constitution as it directly impedes the right of intercourse through out the territo ries of India
Re Contention a The arguments of learned counsel on the first three conten tions 905 require to be considered together as these contentions themselves have certain over lapping areas amongst them
Basically the question is as to what constitutes luxuries  as the subject of a tax under Entry 62 List II and second ly whether providing of accommodation for lodging in hotels or lodging houses even if the accommodation could be said to be luxuries  in a colloquial sense could be the subject of a tax under Entry 62 of List II
Shri Sorabjee contended that the concept of a tax on luxuries  contemplates a tax on articles and goods like jewellery perfumes liquors tobacco etc in their character and attribute as articles of luxury
The idea it is urged does not include services or activities as falling within the concept of luxuries as a subject of taxation
The Gujarat High Court dealing with this contention held that the contention if accepted would diminish the content of the Entry and reduce its scope from taxes on luxuries to taxes on articles of luxuries
Shri Sorabjee however submitted that the High Court was in error in its understanding of the import of the concept of luxuries  in Entry 62 as a subject of tax
The learned counsel also referred to the following observations of the High Court of Bombay in State of Bombay vs RMD Chamar baugwalia  Ors AIR 1956 Bom 1 at page 11 With regard to luxuries it is significant to note that the plural and not the singular is used and the luxuries in respect of which a tax can be imposed under entry 62 is a tax on goods or articles which constitute luxuries and it is again significant to note that the topic of luxuries only is to be found in entry 62 in the taxation power and not in either entry 33 or 34
That clearly shows that what was contemplated was a tax on certain articles or goods constituting luxuries and not legislation controlling an activity which may not be a necessary activity but may be necessary and in that sense a luxury Emphasis supplied It is to be noticed that the decision of the Bombay High Court in which the above observation occurs was over ruled by this Court in State of Bombay vs RMD Chamarbaugwalia  The impugned State Legislation which the High Court had struck down was held to be a valid piece of legislation under Entry 62 List II
In the light of the decision of this Court in the case the observations of the learned Chief Justice of the Bombay High Court excerpted are rendered inapposite
Indeed a view similar to the one taken by the Bombay High Court as to the concept of luxuries  in Entry 62 of List 906 II was taken by the Kerala High Court in AS Bava vs State of Kerala However the views of the Bombay and Kerala High Courts were referred to and dissented from by the Calcutta High Court
In Spences Hotel Private Ltd and another vs State of West Bengal at 1892 it is held In these premises we are of opinion that lux uries  in Entry 62 of List II should not be confined to articles or objects of luxury alone
In view of the social and economic structure of our country there can be no doubt that an air conditioned space whether in a hotel or in a restaurant is a luxury by itself
People enter into these spaces for enjoyment of a luxury
In fact the ambit of Entry 62 which includes taxes on entertainments amusements betting and gambling shows that a tax levied under Entry 62 cannot be restricted to certain articles only but may also be extended to things incorporeal
The comfort that a person derives in a hot summer day in an airconditioned space is a luxury particularly in the context of the conditions in which the masses live in India today
In our opinion the State legislature is competent to impose a tax on this luxury
 For reasons we shall state presently we approve the view taken by the Calcutta High Court
We are dealing with an Entry in a Legislative List
The entries should not be read in a narrow or pedantic sense but must be given their fullest meaning and the widest amplitude and be held to extend to all ancillary and subsid iary matters which can fairly and reasonably be said to be comprehended in them
In the Western India Theatres Ltd vs The Cantonment Board Poona Cantonment 1959 2 Supp
SCR 63 this court was dealing with the scope of the power of the Provincial Legislature under Sec
100 of the Govt
of India Act 1935 with respect to Entry 50 in Schedule VII of the said Act to make laws with respect to taxes on luxuries including taxes on entertainments amusements betting and gambling
The contention of the appellant in that case was that the entry authorised a law imposing taxes on persons who received or enjoyed the luxuries etc
and that no law made with respect to that Entry could impose a tax on persons who provide the luxuries entertainment or amusements
It 907 was contended that those who provide the luxury etc did not themselves receive or enjoy the luxury or entertainment or amusement but were simply carrying on their profession or trade and were not amenable to be taxed under that Entry
Rejecting the argument it was said   
In view of this well established rule of interpre tation there can be no reason to construe the words taxes on luxuries or entertainments or amusements  in entry 50 as having a restricted meaning so as to confine the operation of the law to be made thereunder only to taxes on persons receiving the luxuries entertainments or amusements
The entry contemplates luxuries entertainments and amusements as objects on which the tax is to be imposed
If the words are to be so regarded as we think they must there can be no reason to differentiate between the giver and the receiv er of the luxuries entertainments or amusements and both may with equal propriety be made amenable to the tax    Emphasis supplied The concept of luxuries  as a subject of tax was not con fined to those who received or enjoyed the luxury
It could be on those who provided it
In Encyclopaedia Britannica the meaning of the word luxurytax  is set out thus Luxury tax A tax on commodities or services that are considered to be luxuries rather than necessities
Modern examples are taxes levied on the purchase of jewelry per fume and tobacco
 In Webster s Comprehensive Dictionary International Edition the word luxury  is defined Luxury 1
A free indulgence in the pleasures that gratify the senses
Anything that ministers to comfort or pleas ure that is expensive or rare but is not necessary to life health subsistence etc a delicacy
 Luxury connotes extravagance or indulgence as distin guished from the needs and necessities of life
908 The New Dictionary of Thoughts  has these thoughtful things to say of luxury On the soft bed of luxury most kingdoms have expired Young
Unless we are accustomed to them from early youth splendid chambers and elegant furniture had best be left to people who neither have nor can have any thoughts Goethe War destroys men but luxury destroys mankind at once corrupts the body and the mind
 Crown
The concept of a tax on luxuries  in Entry 62 List II cannot be limited merely to tax things tangible and corpo real in their aspect as luxuries 
It is true that while frugal or simple food and medicine may be classified as necessities articles such as jewellery perfume intoxicat ing liquor tobacco etc could be called articles of luxury
But the legislative entry cannot be exhausted by these cases illustrative of the concept
The entry encom passes all the manifestations or emanations the notion of luxuries  can fairly and reasonably be said to comprehend
The element of extravagance or indulgence that differenti ates luxury  from necessity  can not be confined to goods and articles
There can be elements of extravagance or indulgence in the quality of services and activities
In AB Abdul Kadir  Ors
vs State of Kerala  at 699 700 Khanna J said  
The word luxury in the above context has not been used in the sense of something pertaining to the exclusive preserve of the rich
The fact that the use of an article is popular among the poor sections of the population would not detract from its description or nature of being an article of luxury
The connotation of the word luxury is something which conduces enjoyment over and above the necessaries of life
It denotes something which is superfluous and not indispensable and to which we take with a view to enjoy amuse or entertain ourselves
An expenditure on something which is in excess of what is required for economic and personal well being would be expenditure on luxury although the expenditure may be of a nature which 909 is incurred by a large number of people including those not economically well off   The submission of Shri Sorabjee if accepted will unduly restrict the scope of the legislative Entry which should otherwise have the widest and the most liberal meaning and connotation given to it
Contention a in our opinion is unacceptable
Re Contention b This contention pertains to a provision particular to the West Bengal legislation
It is urged that in so far as Section 4 of the West Bengal Act envisages a tax on the mere existence of the provision for the luxury and is levied even if the luxury is not utilised by any person it was beyond the scope of the legislative entry
It was submitted that there must be both a giving and receiving of the luxury and that a tax on the mere existence of the means of providing the luxury would be insufficient to support a law imposing a tax thereon
It would in any event it is urged constitute an unreasonable restriction on the freedom under Article 191g
Reliance was also placed on certain observations in Western India Theatres Ltd s case supra
The passage in the judgment relied upon by Shri Sorabjee merely says that both the giver and the receiver of the luxuries are amenable to be taxed
The decision cannot be understood as laying down the proposition that if there is no actual utilisation of the luxury no tax can be levied on the mere existence of the provisions made for the prospective or potential utili sation of the luxury
In support of the proposition that a tax on luxuries must relate to and be based on an actual utilization of the luxury and not on the mere existence of the means of provid ing luxury  Sri Sorabjee placed strong reliance on the observations of the High Court of Bombay in Ramesh Waman Toke and others vs The State of Maharashtra AIR 1984 Bombay 345 which while dealing with the legislation under Entry 62 List II imposing a tax on entertainment held   
In our opinion this is not a tax on entertainment at all which the State Legislature is entitled to levy under item 62 of the State List
In order that the enter tainment duty should amount to a tax on entertainment it should be levied on entertainment which is actually held and not on enter 910 tainment which is theoretically capable of being held
Looking to the provisions which have been examined in detail it is clear to us that the said provisions do not take into account entertainment that is actually held by the owner of the touring cinema or the owner of the video exhibition
The basis on which tax can be validly levied is the fact of entertainment
The taxing event is the entertainment
If there is no entertainment at all the question of levying entertainment tax in exercise of the legislative powers conferred upon the State Legislature does not arise at all
If the Act purports to levy tax on notional entertainment then the exercise of that taxing power must be held to be ultra vires the Constitution
This is exactly what has happened in the instant case
 There might possibly be some distinction between the ideas of entertainment  and luxuries 
With due respect to the High Court the interpretation that commended itself to the High Court would unduly restrict the scope of the legisla tive Entry
On such an interpretation it might be possible for a person to go further and also contend that no enter tainment  was actually derived
The concept of luxuries  in the legislative Entry takes within it everything that can fairly and reasonably be said to be comprehended in it
The actual measure of the levy is a matter of legislative policy and convenience
So long as the legislation has reasonable nexus with the concept of luxuries  in the broad and gener al sense in which the expressions in legislative tests are comprehended
the legislative competence extends to all matters with respect to  that field of topic of legisla tion
The taxable event need not necessarily be the actual utilisation or the actual consumption as the case may be of the luxury
The contention in substance is that the means of providing luxury by itself does not provide the nexus between the taxing power and the subject of tax and there must be an actual and not merely a notional or poten tial consumption or utilisation of the luxury
As an in stance of what can be said to be fairly and reasonably comprehended in a legislative Entry reference may be made to the notional income for purposes of a tax on income of a person from a house property in his own personal occupation or a property not actually let
In that context this COurt said that which can be converted into an income can be reasonably regarded as giving rise to income See Bhagwan Dass Jain vs Union of India  A luxury which can reasonably be said to be amenable to a potential conception does provide the nexus
911 If the provider of the luxury is also independently amenable to the tax the further restriction on the power suggested by the argument tends to cut into the plenitude of the field of legislation
If the idea of luxuries is required to be so wide as to comprehend in it every aspect which can fairly and reasonably be said to be embraced by it then the taxing power cannot be limited to or condi tioned in the manner suggested
Once the legislative compe tence and the nexus between the taxing power and the subject of taxation is established the other incidents are matters of fiscal policy behind the taxing law
The measure of the tax is not the  same thing as and must be kept distin guished from the subject of the tax
So far as the argument that fundamental rights under Article 191g are violated by a levy on a mere provision for luxury without its actual utilisation is concerned it is settled law that the mere excessiveness of a tax or the fact that it affects the earnings cannot per se be held to violate Article 191g
Contention b is not substantial either
Re Contentions c and d These contentions were somewhat attractively presented and bear close scrutiny
Shri Sorabjee urged that the con cept of luxuries is a relative or comparative idea dis tinguishable from necessities by the special attribute or quality of distinction inherent in them
The articles or activities of luxury could be identified as such only by reason of that inherent distinguishing special quality or attribute
The price factor says learned counsel might be prima facie an index of that special quality or attribute but the price is not itself a substitute for the special quality or attribute
Therefore if what is legislatively classed as luxury is on the sole basis of the price alone then the legislative definition or the means of identifica tion of the luxury becomes irrational as it has the effect of substituting price in place of the special quality
The two are not the something
There is nothing in the law it is urged which identifies or distinguishes luxury  on the basis of any special attribute apart from the price factor
This argument itself recognises that price might be and very often is evidence of quality
The statute proceeds on the premise that any accommodation in a hotel which is priced above a certain level could reasonably be held to be of a particular quality distinguishing it from others
These ideas of luxury or necessity are necessarily relative ideas and require to be understood in the context of the contempo rary 912 standards of living
What might have been a luxury  some decades ago might cease to partake of the character now
What is luxury today might be considered a necessity a decade or so later
In Abdul Kadir s case supra it was observed It may be added that there is nothing static about what constitutes an article of luxury
The luxuries of yesterday can well become the necessities of today
Like wise what constitutes necessity for citizens of one country or for those living in a particular climate may well be looked upon as an item of luxury for the nationals of anoth er country or for those living in a different climate
A number of factors may have to be taken into account in adjudging a commodity as an article to luxury   We are presently concerned with the question whether the quality or standards of lodging accommodation in hotels can be called luxurious by contemporary standards by reason of the higher standards of charges payable for the accommoda tion
Legislature has chosen to identify the luxury by the statutory standards prescribed by it
According to the legislative assumption price does become evidence of the special quality on the basis of which luxuries  could be distinguished and that some special quality is attributable to goods and services through the means of the price
Quali ty and price in the legislative assessment can be assumed to have a logical inter relationship
This cannot be held to suffer from the vice of irrationality
The further contention is that when the price factor is made the sole criterion for imparting the quality of luxury to the lodging accommodation the means of identification so adopted cease to distinguish areas in the services which are not luxuries but are really necessities and comforts and the subject of the tax would come to include not merely lux uries but necessities and comforts also
The answer is that in the context of lodging accommodation and the services that go with it the concept of luxury would necessarily be a comprehensive idea taking into account the various compo nents of the services
Differences of degree can at particu lar stage become differences of kind
The composite elements of lodging accommodation and services associated with it cannot be broken into components so as to distinguish some components as necessities some others as comforts and yet others as luxuries
Even necessities and comforts which have to them the additional element of undue elegance to a 913 point of extravagance and indulgence might become luxuries
Though the arguments on these contentions were not without their interesting facets we must however express our inability to accept them as valid arguments against the constitutionality of the provisions
Contentions c and d are accordingly held and an swered against the petitioners and the appellants
Re Contention e The point sought to be put across arises out of the definition of the expression charges for lodging  in sec
2a read with the Explanation to the provision
Sec 2a defines charges for lodging to include charges for air conditioning telephone television radio music extra beds and the like
It is contended that the expression and the like  is vague and confers an arbitrary power to bring to tax an undefined entity
It is further contended that the Explanation appended to Section 2a to the effect that the decision of the State Government on any dispute in that behalf is final and shall not be called in question in any court aggravates the arbitrariness and constitutes an unreasonable restriction and is violative of Article 191g
Reliance was placed on the decision of this Court in Corporation of Calcutta vs Calcutta Tramways Co  We are afraid the argument overlooks certain relevant factors bearing on the point
It is no doubt true that it has been held in several cases that the absence of a provi sion for a correctivemachinery by way of appeal or revi sion to rectify an adverse order made by an authority on whom power is conferred might indicate that the power so conferred is unreasonable or arbitrary
But the corrective machinery may itself take several forms and be inherent or found in the provisions for conferment of the power them selves
The mere absence of a corrective machinery or the existence of a provision imparting finality by themselves would not be conclusive so as to render the conferment of power per se unreasonable and arbitrary rendering the provi sion unconstitutional
In Babu Bhai vs State of Gujarat at 736 this Court said    in other words mere absence of a corrective ma chinery by way of appeal or revision by itself would not make the power unreasonable or arbitrary much less would render the provision invalid
Regard will have to be had to several factors such as on whom the power is 914 conferred whether on a high official or a petty officer what is the nature of the power whether the exercise there of depends upon the subjective satisfaction of the authority or body on whom it is conferred or is it to be exercised objectively by reference to some existing facts or tests   There are in built checks on the power under Explanation to sec 2a
The expression and the like  would require to be construed ejusdem generis
The genus or the class of items envisaged by the preceding words not having been exhaustive of the genus or the class the legislature therefore has supplied the words and the like  so as to bring in any other item of the same class or genus
This by itself is a clear guide for the exercise of the power
Another relevant consideration is the identity and status of the repository of the power
The power is given to a high authority like the State Government
In these circumstances it cannot be said that the power is an uncanalised power and is an arbitrary or unreasonable one
There are statutory guides governing its exercise and the guide lines are gov erned by well settled principles of interpretation
There is no substance in contention e
Re Contention f What is assailed here is the deeming provision in sec
43 which brings to charge at the normal rates cases where no charge is collected at all for lodging or where conces sional rates are charged
The deeming provision does not apply to cases where accommodation is provided free or at commercial rates to the employees of the hotel
No fault can be found with this provision which merely states that where the usual lodging charges are not collected for providing the lodging accommodation tax shall be payable as if the usual charges had been collected
This is a provision against evasion
There is no merit in the challenge to the validity of this provision
Contention f requires to be rejected
12 Re  Contention g Shri RF Nariman learned counsel who addressed argu ments with particular emphasis on this contention submitted that tax laws are not outside the purview of Part XIII of the Constitution and that the present tax on lodgings and accommodations in hotels is violative of the freedom of trade commerce and inter course and offends article 915 301
Learned counsel submitted that business undoubtedly is commerce but is something more it is intercourse
The word intercourse specifically occurs in article 301 intending to give the largest connotation to the concept of commerce
The question is whether the impugned tax imposes a restriction on the freedom under Article 301
If it does the further questions whether the restriction is reasonable and is required in public interest and whether Presidential sanc tion had been obtained for the introduction of the legisla tive measure arose for consideration
It has been held that only such taxes as are directly and immediately restrictive of trade commerce and intercourse that fall within the purview of article 301
On the several facets of the similar some say deceptively similar provisions of sec
92 of the Commonwealth of Australia Constitution Act 1901 comments of a learned author may be recalled The lengthy series of judicial decisions on the meaning and scope of the immunity afforded by section 92 is ample testimony to the difficulty involved in giving some precise meaning to a provision which in reality expresses a politi cal slogan rather than a legal precept
Rich J once pithily described the lot of the High Court in relation to section 92 as being to explain the elliptical and expound the unex pressed and he emphasized that the practical necessity of determining precisely what impediments were no longer to obstruct inter State trade obliged the court to attempt the impossible task of supplying an exclusive and inclusive definition of a conception to be discovered only in the silences of the Constitution On the significance of the word intercourse  in sec
92 of the Australian Constitution it was held by the Australi an High Court in Gratwick vs Johnson  that an order which provided that no person should travel by rail or commercial passenger vehicle from any State in the com monwealth to any other State without a permit from a common wealth official would violate the freedom of intercourse  under sec
It was held that the prohibition showed an indifference to if not a disdain of the terms of sec
In Atiabari Tea Co vs State of Assam  at 860 61 this Court said    in determining the limits of the width and ampli tude of the freedom guaranteed by article 301 a rational and work 916 able test to apply would be Does the impugned restriction operate directly or immediately on trade or its movement 
It is the free movement of the transport of goods from one part of the country to the other that is intended to be saved and if any Act imposes any direct restrictions on the very movement of such goods it attracts the provisions of article 301   In Mehtab Majid  Co vs State of Madras 1963 Supp 2 SCR 435 this Court said It is now well settled that taxing laws can be restrictions on trade commerce and intercourse if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulating measures
Sales tax of the kind under consideration cannot be said to be a measure regulating any trade or a compensatory tax levied for the use of trading facilities sales tax which has the effect of discriminating between goods of one State and goods of another may affect the free flow of trade and it will then offend against article 301   Taxes can and do sometimes having regard to their effect and impact on the free flow of trade constitute restrictions on the freedom under article 301
But the restric tion must stem from the provisions of the law imposing the tax which could be said to have a direct and immediate effect of restricting the free flow of trade commerce and intercourse
It is not all taxes that have this effect
Freedom under Article 301 is by all reckoning a great freedom one of the utmost significance to economic unity of the nation
Underlying the need for and the recognition of the freedom of inter State trade commerce and intercourse one is tempted to refer to the lofty sentiments of Justice Cardozo in Baldwin vs GAF Inc that it was flamed upon the theory that peoples of several States must sink or swim together and that in the long run the prosperi ty and salvation are in union and not in division and that the ultimate principle is that one State in dealing with another may not place itself in position of economic isola tion
But in the present case it has not been pointed out how a tax on luxuries enjoyed by a person in a hotel is either discriminatory or has the direct and immediate effect of impeding the freedom of inter 917 course
In Grannall vs Marrickville Margarine Pty Ltd  a New South Wales statute which prohibited the manufacture of margarine without a licence which if granted would contain a condition limiting the quantity to be manufactured was assailed on the ground of its violation of sec
92 of the Australian Constitution
Repelling the challenge it was held It is of course obvious that without goods there can be no inter State or any other trade in goods
In that sense manufacture or production within or importation into the Commonwealth is an essential preliminary condition to trade and commerce between the States in merchandise
But that does not make manufacture production or importation trade and commerce among the States
It is no reason for extending the freedom which section 92 confers upon trade and commerce among the State to something which precedes it and is outside the freedom conferred
 We find no substance in contention g
In the result for the foregoing reasons the writ petitions and the appeals are dismissed
But in the circum stances there will be no order as to costs
PSS Appeals dismissed


Summary:
The contesting respondents have been in occupation of the demised property under a registered lease for 20 years which was to expire on 3171971
They served a notice on the appellants on 1671971 claiming the right to continue in possession after 3171971 as tenants from month to month
The appellants did not accept the respondents  claim and filed before the Munsif a case purporting to be an application under section 12 of the Bihar Buildings Lease Rent and Eviction Control Act 1947
The respondents con tested the application on the ground that as heirs of the original lessee they had formed a partnership as a result of which a new month to month tenancy had been created
They further contended that the appellants  application before the Munsif under section 12 was not maintainable
The Munsif accepted the appellants  case that the legal representatives of the original lessee continued as tenants under the lease after the attornment and were liable to eviction after the expiry of the lease period
The Judicial Commissioner dis missed the respondents  appeal holding that the deed of lease was subsisting the parties were having the relation ship of lessors and lessees and no month to month tenancy had been created
The Judicial Commissioner further held that the appellants would have to make another application under section 123 of the Act for evicting the respondents if they did not vacate within the time allowed by court
The High Court in its revisional jurisdiction set aside the decisions of the courts below and held that in the absence of a month s notice under section 121 from the tenants the application of the appellants under section 12 was not maintain able before the Munsif and the entire proceedings was mis conceived
The High Court pointed out that in the circum stances the appropriate remedy of the appellants was to file a suit under section 11 of the Act
971 Before this Court it was contended on behalf of the appellants that an application under section 12 of the Act before the Civil Court was maintainable and that both the reme dies
ie by an application under section 12 of the Act as also by way of a suit were open to a landlord after the expiry of the period of a fixed term tenancy and it was for him to choose which course to follow
On behalf of the respondents it was contended that on the expiry of such a tenancy the only remedy was to file a suit and in any event section 12 was wholly inapplicable as according to their case in the notice a fresh tenancy had come into existence and as such their notice was not one under section 12 of the Act at all
Allowing the appeal this Court HELD 1 The Act refers to several authorities for decision of different issues
As regards the question of dealing
with the eviction of tenants under section 11 and exten sion of period of lease under section 12 the civil court is the proper forum
It is the same court before which both a suit under section 11 and an application under section 12 are to be filed
976C D 2 The instant case was tried by the learned Munsif in the same manner as the trial of an eviction suit
The re spondents filed a regular appeal before the District Judge designated as Judicial Commissioner and he also went through the entire controversy thoroughly
The judgment of the High Court indicates that the scope in which the argu ments by the parties were addressed was the same as in a second appeal and the decision also was accordingly given
In these circumstances it is wholly immaterial as to wheth er the application originally filed by the appellants before the Munsif was not in the form of a plaint specially when the necessary verification was also there at the foot of the petition
The only difference may be as to the amount of court fee payable by the parties but that should not come in the way of construing the correct nature of the proceed ings
976G H 977C D Madho Bibi vs Hazari Mal Marwari AIR 1929 Patna 141 and Hazari Lal vs Ramjiwan Ramchandra AIR 1929 Patna 472 referred tO 3 The court must examine the substance of the applica tion to find out its true nature and should not be guided solely by the heading given to it by a party
977G H 972 Lachhoo vs Munnilal Babu Lal AIR 1935 All
183 referred to
4 The principle is well established that the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory and there is no reason to exclude the application of this rule to judical proceedings
977H 978A RP Singh vs The Chief Commissioner Admn Manipur  referred to
5 If it is assumed that an application under section 12 of the Act is not maintainable in the facts and circumstances of the present case the proceeding has to be treated as a suit and the judgment of the learned Munsifas a decree therein
978C 6 The occasion for filing an application under section 123 can arise only where the matter is covered by section 12 and as an assumption has to be made in favour of the re spondents that section 12 has no application there is no point in asking the appellants to file such an application
978E 7 This Court can and should restore the decree of the trial court even in the absence of an appeal by the appel lants before the High Court against the order of the Judi cial Commissoner declining to pass a formal decree of evic tion and directing the appellants to make an application under section 123 of the Act for that purpose
As mentioned in Article 142 of the Constitution this Court may pass such decree or make such order as is necessary for doing complete justice in any case or matter pending before it and the instant case is a most appropriate one for exercise of such power
978D F