Case: State Of Gujarat  Vs. Akhil Gujarat Pravasi V.S.Mahamandal&amp;Ors

It was held that the short break taken during the course of journey could not fasten liability for tax as the words kept employed in Section 3 had an altogether different connotation, which has an element of stationariness. The principle laid down in this case can hardly have any application here. Similarly, the writ petitioners can drive no assistance from State of Gujarat vs. Kaushikbhai K. Patel AIR 2000 SC 2175 , wherein the words for reasons beyond the control of such owner or person previously occurring in Section 3A(5)(b) were held to be beyond the legislative competence of the State. In this case the High Court had held that once the statute provided for refund of tax on account of non-use of the vehicle, the legislature could not have imposed a further condition to the effect for reasons beyond the control of such owner or person and the said expression was held to be beyond the legislative competence. The appeal preferred by the State of Gujarat was dismissed by this Court and the view taken by the High Court was affirmed. We would like to point out that the judgment does not show that the attention of the Bench was invited to any of the decisions which we have referred to above, wherein it has been held that actual user of the road is not material and mere keeping of the vehicle which is capable of being used is enough to attract liability of tax. 21. Learned counsel for the writ petitioners has submitted that the purpose for which the Act was enacted was to augment the financial resources of the State to meet the huge expenditure on account of natural calamities etc. as has been mentioned in the Statement of Objects and Reasons. Therefore, the Act is not a compensatory enactment which may have been passed for collecting revenue for the purpose of maintenance of roads and consequently the same is invalid. In our opinion, the contention raised has not substance. In G.K. Krishnan vs. State of Tamil Nadu AIR 1975 SC 583 this Court has clearly ruled that if the State Legislature was competent to pass the Act, the question of motive with which the tax was imposed is immaterial and there can be no plea of a colourable exercise of power of tax if the Government had the power to impose the tax. it was further held that if the Government had a authority to impose a tax, the fact that it gave a wrong reason for exercising the power would not derogate from the validity of the tax. 22. Learned counsel for the writ petitioners has also submitted that only contract carriages which are designated as omnibuses and luxury or tourist designated omnibuses have been subjected to a very heavy tax under Section 3A of the Act, whilst all other vehicles are taxed under Section 3 of the Act and whereunder the quantum of tax is much lower as would be evident from First to Seventh Schedule of the Act. The submission is that these vehicles have been discriminated against in the matter of taxation and there is no lawful justification for meeting out such differential treatment to them. We are unable to accept the submission made. A similar contention was negatived in G.K. Krishnan vs. State of Tamil Nadu AIR 1975 SC 583 on the ground that the classification of vehicles as Stage carriage and contract carriage for the purpose of imposing a higher tax on the latter is presumed to be reasonable having regard to the fact that it was based on local conditions of which the Government was fully cognizant and the differentiation thus made has reasonable relation to the purpose of the Act. A similar contention made in Malwa Bus Service vs. State of Punjab AIR 1983 SC 634 was repelled and it was held as under: "There is no dispute that even a fiscal legislation is subject to Article 14of the Constitution. But it is well settled that a legislature in order to tax some need not tax all. It can adopt a reasonable classification of persons and things in imposing tax liabilities. A law of taxation cannot be termed as being discriminatory because different rates of taxation are prescribed in respect of different items, provided it is possible to hold that the said items belong to distinct and separate groups and that there is a reasonable nexus between the classification and the object to be achieved by the imposition of different rates of taxation. The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidity..." It was further held that the Courts lean more readily in favour of upholding the constitutionality of taxing law in view of the complexities involved in the social and economic life of the community. Unless the fiscal law in question is manifestly discriminatory, the Court should refrain from striking it down on the ground of discrimination. This being the position of law, it is not possible to accept the contention of the writ petitioners that the tax imposed upon the designated omnibuses is discriminatory. 23. Nothing new has been pointed out to challenge Gujarat Act No. 9 of 2002 by which the Bombay Motor Vehicles Taxation Act, as adopted in the State of Gujarat with up to date amendments, was further amended after the decision of the High Court which was rendered on 17th August, 2001. In fact, the main argument of the learned counsel for the writ petitioners is that the said amending Act merely rearranged the Sections and suffered from the same infirmity as the previous Act. Since we are of the opinion that the view taken by the High Court is not correct and Section 3A and Rule 5 of the Rules, as incorporated vide notification dated 6.2.2001 are intra vires and are perfectly valid, the challenge made to Gujarat Act No. 9 of 2002 has no substance and must fail. 24.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Learned counsel for the writ petitioners has also submitted that only contract carriages which are designated as omnibuses and luxury or tourist designated omnibuses have been subjected to a very heavy tax under Section 3A of the Act, whilst all other vehicles are taxed under Section 3 of the Act and whereunder the quantum of tax is much lower as would be evident from First to Seventh Schedule of theAct. The submission is that these vehicles have been discriminated against in the matter of taxation and there is no lawful justification for meeting out such differential treatment to them. We are unable to accept the submission made.Learned counsel for the writ petitioners has submitted that the purpose for which the Act was enacted was to augment the financial resources of the State to meet the huge expenditure on account of natural calamities etc. as has been mentioned in the Statement of Objects andTherefore, the Act is not a compensatory enactment which may have been passed for collecting revenue for the purpose of maintenance of roads and consequently the same is invalid. In our opinion, the contention raised has notnew has been pointed out to challenge Gujarat Act No. 9 of 2002 by which the Bombay Motor Vehicles Taxation Act, as adopted in the State of Gujarat with up to date amendments, was further amended after the decision of the High Court which was rendered on 17th August, 2001. In fact, the main argument of the learned counsel for the writ petitioners is that the said amending Act merely rearranged the Sections and suffered from the same infirmity as the previous Act. Since we are of the opinion that the view taken by the High Court is not correct and Section 3A and Rule 5 of the Rules, as incorporated vide notification dated 6.2.2001 are intra vires and are perfectly valid, the challenge made to Gujarat Act No. 9 of 2002 has no substance and must fail.