ition No 505 of 1990 etcetc
Under Article 32 of the Constitution of India RN Sachtey SK Bhattacharya SC Patel Anip Sachthey Mahabir Singh RK Agnihotri RK Kapur Ms Anil Katyar ND Garg CM Nayar NP HS Munjral V B Joshi VK Verma SK Agnihotri Sakesh Kumar N Ganapathy M Veerappa Mrs Rani Chhabra MN Shroff Indra Makwana Sushil Kumar Jain SN Aggarwal Ms Vijay Lakshmi Menon CVS Rao Aruneshwar Gupta and Sushil Kumar for the appearing parties
The Judgement of the Court was delivered by RANGANATH MISHRA CJ
These are applications under Article 32 of the Constitution on behalf of petitioners who hold All India Tourist Permits granted under section 637 of the 
corresponding to section 889 of the 
The respondent States in these writ petitions are Haryana Punjab Gujarat Rajasthan and Madhaya Pradesh 
There is a common Act the Punjab Motor Vehicles Taxation Act 1924 which is applicable to the States Punjab and Haryana
In each of the other States there is a similar separate legislation
Under the taxing power in the several Act provision has been made for taxation as also for levy of additional tax
It is the contention of the petitioners that the demand of additional tax is neither compensatory nor regulatory and  therefore the levy is violative of Article 101g read with Article 301 of the Constitution
In regard to the State of Punjab and Haryana a special contention has been raised to effect that rule 8v of the Punjab Motor Vehicles Taxation Rules 1925 provide total exemption from liability of tax if the vehicle is brought into Punjab and kept for use within the State for a period not exceeding 30 days in a year and it is the contention of the petitioners that since the vehicles registered outside the State of Punjab and Haryana are not kept within State for more than 30 days a year the demand of tax in the face of rule 8v is contrary to law
In the State of Gujarat the Bombay Motor Vehicles Tax Act 1958 has been amended Section 3A of the Amending Act provides that 3A 1 On and from the first day of April 1982 there shall 527 be levied and collected
on all ominibuses which are exclusively used or kept for use in the State as contract carriages hereinafter in this section referred to as the omnibus a tax hereinafter referred to as  the additional tax in addition to the tax levied under section 3 at the rates fixed by the State Government by notification in the official Gazettte but not exceeding the maximum rates specified in the table below Description of Maximum rate of an omnibus additional tax
A ordinary i Monthly rate of Rs Omnibuses 240 per passenger permitted to be carried
ii Weekly rate of Rs 80 per passenger permitted to be carried
iiiDaily rate of Rs 16 per passenger permitteed to be carried
B Luxury or touristi Monthly rate of Rs 360 Omnibuses per passenger permitted to be carried
iiWeekly rate of Rs 120 per passanger permitted to be carried
iiiDaily rate of Rs 24 per passenger permitted to be carried
The validity of levy of this type came up for consideration before this Court in the case of the Automobile Transport Rajasthan Ltdv
The State of Rajasthan and Ors 1963 1 SCR491
Four learned Judges who constitued the majority held that the provisions of Rajasthan Motor Vehicles Taxation Act 1951 did not violate the provisions of Article 301 of the Constitution and the taxes imposed under the Act were compensatory or regulatory in nature which did not hinder the freedom of trade commerce and intercourse assured by that Article At page 586 of the Report the following test was indicated 528 It seems to us that working test for deciding whether a tax is compensatory or not is to inquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities 
It would be impossible to judge the compensatory nature of a tax by meticulous test and in the nature of things that cannot be done
The same question came up for consideration before a Two Judge Bench in Ms International Tourist Corporation and Ors
vs State of Haryana and Ors
  This Court followed the decision referred to above of the larger group and observed There cannot be the slightest doubt that the State of Haryana incurs considerable expenditure for the maintanance of roads and providing facilities for the transport of goods and passengers within the State of Haryana 
The maintenance of highways other than the National Highways is exclusively the responsibility of the State Government
While the maintenance of National Highwauyys is the responsibility of the Union Government under section 5 of the National Highways Act that very provision empowers the Central Government to direct that any function in relation to the developement and maintenance of a National Highway shall also be exercisable by the concerened State Government
Section 6 further empowers the Central Government to give directions to the State Government as to the carrying out of the provisions of the Act and section 8 authorises the Central Government to enter into an agreement with the State Government in relation to the developement and maintenance of the whole or part of a National Highway situated within the State including a provision for sharing of expenditure
Therefore the State government is not altogether devoid of responsibility in the matter of developement maintenance of National Highway though the primary responsibility is that of the Union Government
It is under a statutory obligation to obey the directions given by the Central government with respect to the development and maintenance of National Highways and may enter into an agreement to share the expenditure
That part of the Highway which is within a municipal area is excluded from the definition of a National 529 highway and therfore the responsibility for the development and maintenace of that part of the Highway is certainly on the State Government and the Municipal Committee concerned
Since the development and maintenance of the part of the Highway which is within a municipal area is equally inportant for the smooth flow of passengers and goods along the National Highway it has to be said that in developing and maintaining the Highway which is within a municipal area the State Government is surely facilitating the flow of passengers and goods along the National Highway
Apart from this  other facilities provided by State Government along all Highways including National Highways such as lighting traffic control amenities for passengers halting places for buses and trucks are available for use by everyone including those travelling along the National Highways 
It cannot therfore be said that the State Government confers no benefits and renders no service in connection with traffic moving along National Highways and is therfore not entitled to levy a compensatory and regulatory tax on passengers and goods carried on National Highways
We are satisfied that there is sufficient nexus between the tax and passengers and goods carried on National Highways to justify the imposition
 This view has been appoved in BA Jayaram and Orsv
Union of India and Ors
1984 1 SCC 168
That case also relates to permit holders under section 637 of the  and challenge of the present type was negatived in the case
Law is settled that uphold levy of a tax of this type what is necessary is existence of a nexus between the subject and the object of the levy and it is not necessary to show that the whole or substantial part of the tax collected is utilised
We are therefore satisfied that the demand of tax is not open to challenge and the plea raised against the levy whether of tax or additional tax is not justifiedunder the taxing provision a statutory outer limit has been provided and the actual amount is left to be determined by the State Government by notification
Obviously discretion is left with the State Government to demand at a rate which in a given situation would be justified
Once it is held that the tax is either compensatory or regulatory that forms the guideline for the State Government to keep in view to determine the rate at which within the upper limit fixed by law the demand has to be made
The second contention which has been raised is applicable to the 530 State of punjab and Haryana and that depends upon the scope of rule 8v of the Punjab Motor Vehicles Taxation Rules1925
We note that the provision perscribes that a motor vehicle temporarily brought into Punjab and kept for use therein for a period not exceeding 30 days is entitled to total exemption and that is not in dispute before us
Nor is it in dispute that the rule applies to Haryana 
The words Kept for use  came up for consideration in the case of International Tourist Corporation supra where this Court held that once a vehicle is used within the State the Taxable event occured and it must be taken for use
In State of Mysore and Orsv
Ms TV Sundaram Iyengar  SonsP Ltd  the meaning of kept was examined at length and this Court held that vehicle in transit through the State of Mysore or even making a necessary halt for a short interval during transit  cannot be said to be a vehicle kept  for use on roads in the State of Mysore
The word kept  has not been defined in the Act
It must  tharefore be interpreted in its ordinary popular sense consistent with the context
The ordinary dictionary meaning of the word kept  is to retain  to maintain  or cause to stay or remain in place  or to detrain  or to stay or continue in specified condition position etc  It is something different from a mere state of transit or a course of journey through the State
It is something more than a mere stoppage or halt for rest food or refreshment etc
in the course of transit through the territory of the State
That being the position rule 8v which uses the terms kept for use  may not cover a case of bare transit and in terms of the rule exemption is available for vehicle kept upto 30 days in a year
In that view of the matter tourist vehicles registered outside the State of Punjab and Haryana when brought into these two States for regular use and not by way of transit and when used for more than 30 days in a year would attract taxability otherwise the exemption provision in rule 8v would be available 
We have settled the legal position and we leave it to the individual taxing authorities as also the operators of tourist vehilces to work out their respective rights
We would  therefore  like to clarify that the first aspect being a challenge against the taxing provision whether by way of tax or additional tax is rejected and the question of exigibility of tax in the States of Punjab and Haryana with reference to rule 8v of the Punjab Motor Vehicles Taxation rules 1925 is left to be determined in individual cases as and when raised
There would be no order as to costs
GN Petitions deposed of


Summary:
The respondent a Section Officer in the office of the Chief Controller of Import and Exports was communicated adverse remarks for the year 1984
He made a representation against the adverse remarks but the same was rejected by the Ministry of Commerce by its order dated 611986
Thereafter he made a Memorial to the President and the Government by its order dated 14886 partially expunged the adverse remarks
The respondent filed a petition before the Central Administrative Trubunal challenging the order rejecting his representation on the ground that it did not contain any reasons
The Tribunal by its order dated 27787 quashed both the order dated 6186 as well as 14886 by holding that the orders were vitiated in law in the absence of reasons
In appeal to this Court by the Union of India it was contended on behalf of the respondent that the principles of natural justice require the superior authority to records reasons in rejecting the Government servant s representation made against the adverse remarks as the order of rejection affected the respondent s right
Allowing the appeal this Court HELD 1
The superior authority while considering the represen 452 tation of a Government servant against adverse remarks is not required by law to act judicially it is under no legal obligation to record or communicate reasons for its decision to the Government servant
There is no rule or administrative order for recording reasons in reacting such a representation
In the absence of any statutory rule or statutory instructions requiring the competent authority to record reasons in rejecting a representation made by a Government servant against the adverse entries the competent authority is not under any obligation to record reasons
The decision rejecting such a representation does not adversely affect any vested right of the Government servant nor does it visit him with any civil consequences
It does not mean that the competent authority has licence to act arbitrarily he must act in a fair and just manner
He is required to consider the questions raised by the Government servant and examine the same in the light of the comments made by the officer awarding the adverse entries and the officer counter signing the Confidential Reports
If the representation is rejected after its consideration in a fair and just manner the order of rejection would not be rendered illegal merely on the ground of absence of reason
In many cases having regard to infinite variations of circumstances it may not be possible to disclose reasons for the opinion formed about the work and conduct or character of the Government servant
However it does not mean that the administrative authority is at liberty to pass orders without there being any reasons for the same
In Governmental functioning before any orde is issued the matter is generally considered at various levels and the reasons and opinions are contained in the notes on the file
The reasons contained in the file enable the competent authority to formulate its ipinion
If the order as communicated to the Government servant rejecting the representation does not contain any reasons the order cannot be held to be bad in law
If such an order is challenged in a court of law it is always open to the competent authority to place the reasons before the Court which may have led to the rejection of the representation
It is always open to an administrative authority to produce evidence ali unde before the court to justify its action
459G H 460A E F H 461A B Gurdial Singh Fijji vs State of Punjab  Ors  referred to 2 The President was under no legal obligation to record reasons in rejecting the respondent s representation against the adverse remarks
Consequently the order of the President was not vitiated in law
The Central Administrative Tribunal committed error in quashing the order of the President as well as the order of the Ministry of Com 453 merce dated 611986
Accordingly the Tribunal s order dated 2771987 is set aside
461C E 3
The purpose of the rules of natural justice is to prevent miscarriage of justice and the principles of natural justice are applicable to administrative orders if such orders affect the right of a citizen
Arriving at the just decision is the aim of both quasi judicial as well as administrative enquiry an unjust decision in an administrative enquiry may have more far reaching effect than decision in a quasijudicial enquiry
Generally principles of natural justice require that opportunity of hearing should be given to the person against whom an administrative order is passed
The application of principles of natural justice and its sweep depend upon the nature of the right involved having regard to the setting and context of the statutory provisions
Where a vested right is adversely affected by an administrative order or where civil consequences ensue principles of natural justice apply even if the statutory provisions do not make any express provision for the same and the person concerned must be afforded opportunity of hearing before the order is passed
But principles of natural justice do not require the administrative authority to record reasons for its decision as there is no general rule that reasons must be given for administrative decision
Order of an administrative authority which has no statutory or implied duty to state reasons or the grounds of its decision is not rendered illegal merely on account of absence of reasons
It has never been a principle of natural justice that reasons should be given for decisions
458H 459A D State of Orissa vs Dr Miss Binapani Dei  Ors   Mohinder Singh Gill  Ors
vs The Chief Election Commissioner New Delhi  Ors  A K Kraipak  Ors
vs Union of India  Ors and Regina vs Gaming Board for Great Britain ex
p Benaim and Khaida   referred to
Though the principles of natural justice do not require reasons for decision there is necessity for giving reasons in view of the expanding law of judicial review to enable the citizens to discover the reasoning behind the decision
Right to reasons is an indispensable part of a sound system of judicial review
Under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen it is therefor desirable that reasons should be stated
459F 4
Ordinarily Courts and Tribunals adjudicating rights of parties are required to act judicially and to record reasons
Where an 454 administrative authority is required to act judicially it is also under an obligation to record reasons
But every administrative authority is not under any legal obligation to record reasons for its decision although it is always desirable to record reasons to avoid any suspicion
Where a statute requires an authority though acting administratively to record reasons it is mandatory for the authority to pass speaking orders and in the absence of reasons the order would be rendered illegal
But in the absence of any statutory or administrative requirement to record reasons the order of the administrative authority is not rendered illegal for absence of reasons
If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide it is always open to the authority concerned to place reasons before the Court which may have persuaded it to pass the orders
Such reasons must already exist on records as it is not permissible to the authority to support the order by communicated to the Government servant
If the statutory rules require communication of reasons the same must be communicated but in the absence of any such provision absence of communication of reasons do not affect the validity of the order
457H 458A C