Appeal No 38 of 1967
Appeal from the judgment and order dated December 1 1966 of the Assam and Nagaland High Court in Civil Rule No 145 of 1964
section V Gupte Solicitor General and Naunit Lal for the appellants
612 Ram Labhaya Obhrai I M Obhrai SK Mehta and K L Mehta for the respondent
The Judgment of the Court was delivered by Subbarao CJ
This appeal by certificate is directed against the order of the High Court of Assam declaring that the Assam Motor Vehicles Taxation Amendment Acts of 1963 and 1966 were repugnant to the Assam Motor Vehicles Taxation Act 1936 Assam Act 9 of 1936 hereinafter called the Principal Act and therefore void as they were made in contravention of the provisions of article 2542 of the Constitution
The facts are in a small compass and they are as follows The Principal Act came into force on March 1 1937
The assent of the Governor General in Council was given under section 35 of the Government of India Act 1935
This Act imposes tax on motor vehicles in the Province of Assam
In 1955 the Principal Act was amended by Assam Act IV of 1956 and it had received the assent of the President
Subsequently the Principal Act was amended by Act 15 of 1963 but the Bill was introduced in the Assam State Assembly with the previous sanction of the President and it came into force on April 1 1963
Subsequent to the filing of the petition out of which the present appeal has arisen the Principal Act was again amended in the year 1966 and it came into force on April 1 1966
The tax on the stage carriage motor vehicles was gradually raised under each amendment and under the last of the amendments a sum of Rs 56 was imposed per seat
Under the last amendment Act the petitioner respondent had to pay a sum of Rs 1680 as tax for the stage carriage she was plying
The respondent filed a petition under article 226 of the Constitution in the High Court for declaring the amending Acts void and for other reliefs
The petition was heard by a Division Bench of the High Court and the learned Judges delivered two separate but concurrent judgments
They held that the Amending Acts of 1963 and 1966 were void and gave the petitioner respondent the reliefs asked for
Hence the present appeal
The main question in the appeal is whether the said Amending Acts increasing the rate of tax are void for constitution incompetence
The High Court in effect held that the provisions of the said Amending Acts were inconsistent with those of the existing law namely the Principal Act and therefore as they had not received the assent of the President were void under article 254 of the Constitution
This conclusion was arrived at on the ground that the Amending Acts were made in respect of the matter contained in entry 35 of the Concurrent List
613 To appreciate the contentions it will be convenient to read at the outset the relevant Articles of the Constitution
Entry 57 of List II of the Seventh Schedule to the Constitu tion  Taxes on vehicles whether mechanically propelled or not suitable for use on roads including tramcars subject to the provisions of entry 35 of List 111
Entry 35 of List III Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied
article 254 1 If any provision of law made by the Legislature of a State is repugnant  to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List then subject to the provisions of clause 2  the existing law shall prevail and the law made by the Legislature of the State shall to the extent of the repugnancy be void
2 Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter then the law so made by the Legislature of such State shall if it has been reserved for the consideration of the President and has received his assent prevail in that State article 36610 Existing law means any law ordi nance or bye law rule or regulation passed or made before the commencement of the Constitution by any Legislature authority or person having power to make such a law ordinance or bye law rule or regulation
The application of the said provisions to the subject matter of the present appeal leads to the following result
The Principal Act was an existing law
If the Amending Acts were made under entry 35 of the Concurrent List and if they were in conflict with any of the provisions of the existing law to the extent of the inconsistency the said amendments would he void
But on the other hand if the Amending Acts were passed under entry 57 of List 11 of the Seventh Schedule they would fall outside the scope of article 254 of the Constitution as article 254 would apply only to a conflict between the provisions of an existing law and those or the post constitution law in respect of matters enumerated in any of the entries of the Concurrent List
The learned Solicitor General raised before us two points namely i article 254 of the Constitution posits the existence of 614 two
parallel laws One an existing law and the other a post Constitutional law in respect of any one of the entries in the Concurrent List and the provisions thereof are in conflict with each other but it has no application to a case where the State Legislature within the scope of its legislative competency amends an existing law so as to extinguish a part of it
2 The amending Acts were only made under entry 57 of List 11 and therefore there is no scope for invoking the provisions of article 254 of the Constitution
Learned counsel for the respondent on the other hand con tended that there was no distinction between an amending Act and a new Act in the matter of
application of article 254 of the Constitution as in either case the provisions of the said Acts would be inconsistent with the existing law
He further argued that the Amending Acts introduced new principles of taxation and therefore fell squarely within the scope of entry 35 of the Concurrent List
As we are holding in favour of the appellant on the second point it is not necessary to express our view on the first
The short question therefore is whether any of the provisions of the Amending Acts is repugnant to any of the provisions of the existing law with respect to any of the matters enumerated in the Concurrent List
Under the existing law ie Act 9 of 1936 no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act and save as therein specified such tax should thereafter be payable annually notwithstanding that the motor vehicle might from time to time cease to be used see section 4
As aforesaid the Schedule annexed to the Principal
Act was amended from time to time by different amending Acts and the rate was increased
Under the 1963 amending Act apart from other provisions which do not relate to any principles of taxation a new Schedule has been substituted
Neither the amending Act nor the Schedule laid down any principles of taxation in respect of motor vehicles
So too the amending Act of 1966 substituted the Schedule of the Act by another Schedule
A persual of the aforesaid Schedule only disclose that different rates were fixed that is to say the amended Schedule does not lay down any principles on which taxes on motor vehicles are to be levied within the meaning of entry 35 of the Concurrent List it is solely concerned with taxes on vehicles within the meaning entry 57 of List 11
The two entries deal With two different matters though allied ones one deals with taxes on vehicles and the other with the principles on which such taxes are to be levied
When two entries in the Constitution whether in the same List or different Lists deal with two subjects if possible an attempt 615 shall be made to harmonize them rather than to bring them into conflict
Taxes on vehicles in their ordinary meaning connote the liability to pay taxes at the rates at which the taxes are to be levied
On the other hand the expression principles of taxation denotes rules of guidance in the matter of taxation
We therefore hold that the Amending Acts do not come into conflict with the existing law in respect of any principles of taxation but only deal with a subject matter which is exclusively within the legislative competence of the State Legislature
In this view there is no scope for the application of article 254 of the Constitution
Even so learned counsel for the respondent contended that the amending Acts offend the provisions of article 301 of the Constitution
Article 301 reads Subject to the other provisions of this Part trade commerce and intercourse throughout the territory of India shall be free
 The scope of this Article has been authoritatively defined by this Court in The Automobile Transport Rajasthan Ltd vs The State of Rajasthan1
There the majority held that regulatory Measures or measures imposing compensatory taxes for the use of trading facilities did not hamper trade commerce or interCourse but rather facilitate them and therefore were not hit by the freedom declared by article 301
There by virtue of section 4 of the Rajasthan Motor Vehicles Taxation Act 1951 read with the Schedules no one could use or keep a motor vehicle in Rajasthan without paying an appropriate tax for it and if he did so be was made liable to the penalties imposed under section 11 of that Act
This Court by majority held that such taxes were com pensatory and regulatory taxes which did not hinder the freedom of trade
In the present case the respondent in her petition questioned the validity of the provisions of the amending Acts on the following grounds  i The Act abolished the permit fee previously payable on such motor vehicles
She alleges that as a result of the rationalisation of tax and the introduction of a single point levy the tax fixed irrespective of road condition
distance travelled region catered for imposes crushing burden oil the petitioner and the other stage carriage permit bolders plying their vehicles in the short distance route and gives discriminatory weightage in favour of the State Carriage Inter State public carriers and other vehicles plying in longer distance routes
It will be seen that the averments are general and vague
On the other hand the State has filed a detailed affidavit
The following figures show the expenditure incurred on new roads and maintenance of old roads and the income from motor vehicles for 1 1963 1 SCR491
616 some years
In 1962 63 the expenditure was Rs 67160 lakhs and the income was Rs 7558 lakhs
In 1965 66 the expend ture was Rs 149977 lakhs and the income was Rs 13796 lakhs
From the said figures it is clear that the State is charging from the users of motor vehicles some thing in the neighbourhood of II and IO  respectively for the said two years of the cost it has to incur in maintaining and making roads
From Annexure D to the said affidavit it appears that in some cases tax under the 1963 Act had been increased by 50 under the 1966 Act and in some cases the tax under 1963 Act has been increased by 40 under 1966 Act
It is obvious that comparatively small proportion of the general expenditure is realised through the impugned taxation
In the circumstances we must hold that the said Acts were only regulatory measures imposing _compensatory taxes for facilitating trade commerce and intercourse
The Acts are therefore not hit by article 301 of the Constitution
in the result the order of the High Court is set aside and the appeal is allowed
The petition filed by the respondent in the High Court is dismissed with costs here and in the court below


Summary:
Under the Assam Motor Vehicles Taxation Act 1936 no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act
The Schedule was amended from time to time by the substitution of new Schedules and as a result of such amendments in 1963 and 1966 the tax on stage carriage motor vehicles was gradually raised
In a writ petition filed by the respondent challenging the validity of the Amending Acts of 1963 and 1966 the High Court held that the Amending Acts were made in respect of the matter contained in Entry 35 of the Concurrent List namely principles of taxation of motor vehicles and as the provisions of the Amending Acts were inconsistent with those of the existing law namely the 1936 Act the Amending Acts were void because the assent of the President as required by article 254 was not received
In appeal to this Court HELD  i Taxes on vehicles connote the liability to pay taxes at he rates at which the taxes are to be levied while the expression principles of taxation denotes rules of guidance in the matter of taxation
The Amending Acts do not come into conflict with the existing law in respect of any principles of taxation within the meaning of Entry 35 of the Concurrent List but only deal with a subject matter  namely taxes on vehicles within the meaning of Entry 57 of the State List which is exclusively within the legislative competence of the State Legislature and as such
there is no scope for invoking article 254
615A C ii It is only a comparatively small proportion of the general expenditure incurred on new roads and the maintenance of the Id roads that was realised through the impugned taxation
Therefore the Amending Acts are only regulatory measures imposing compensatory taxes for faci litating trade commerce and intercourse
The Acts are hence not hit by article 301 of the Constitution
616C The Automobile Transport Raiasthan Ltd vs The State of Rajasthan 1963 1 SCR 491 followed