Case: B. A. Jayaram and Others Etc Vs. Union of India and Others

and the expenditure incurred". Nor is the court to interpose itself by assuming the role of a cost accountant and attempt to balance meticulously the cost of the services, benefits and facilities against the realisation from the levy. And, if the levy as a whole is justified by the need generally, it does not have to be separately justified with reference to every group of persons claiming to require and receive less service than others. Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly, a mere mockery and in truth a design which is destructive of the freedom of inter-state trade, commerce and inter-course.By virtue of the power given to them by Entries 56 and 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State. Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of Art. 301, unless, as we said, the tax is a mere pretext designed to injure the freedom of interstate trade, commerce and intercourse. The nexus between the levy and the service is so patent in the case of such taxes that we need say no more about it. The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislations outside the range of Art. 301 of the Constitution.4. It is true that the object of enacting sec. 63 (7) by the Parliament was to promote all-India and inter-state tourist traffic. But taxes on vehicles .. suitable for use on roads is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. True again, Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, as explained by us at the outset, it is therefore open to the Parliament to lay down the 17 principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting S. 63 (7) of the Motor Vehicles Act refrained from indicating any such principles, eit her expressly or by necessary implication. The States power to tax and to exempt was left uninhibited. It may be that a a State legislation, plenary or subordinate, which exempts "non-home-state tourist vehicles" from tax would be advancing the object of sec. 63 (7) of the Motor Vehicles Act and accelerating inter-state trade, commerce and intercourse. But merely by Parliament legislating sec. 63 (7), the State Legislatures are not obliged to fall in line and to so arrange their tax laws as to advance the object of sec. 63 (7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under Art. 301 by refusing to exempt or by withdrawing an exemption. Not to pat on the back is not to stab in the back. True, straw by straw, the burden of taxation on tourist vehicles increases as each State adds its bit of straw, but, then, each State is concerned with its coffers and has the right to tax vehicles using its roads; and, the contribution which a tourist carriage is required to make to its treasury is no more than what other contract carriages are required to make. We are firmly of the view that there is no impairment of the freedom under Art. 301. The special submission on behalf of the Karnataka operators that the withdrawal by the Karnataka Government of the exemption granted to outsiders has resulted in the Karnataka operators having to pay tax in every State in the country and, therefore, the withdrawal has impaired the freedom under Art. 301 is but the same general sub- mission, seen through glasses of a different tint. It does not even have the merit that the withdrawal of the Karnataka exemption affects them directly. The submission is rejected.One of the submissions made to us was that if there was a misuse of the all-India permits, the remedy was to punish the wrong doers by taking appropriate action against the wrong-doers by cancelling the permit, if necessary, but not to withdraw the benefit of the exemption altogether, even in the case of honest operators. That is a matter for the Legislature and its delegate to decide but not for the court. If the situation had become so malignant that drastic action was called for, it is not for the court to substitute its judgment to say that the object could perhaps be well achieved by adopting a less drastic procedure.5. It was submitted that all-India tourist vehicles do not use the roads of the State as much as the contract carriages operating in the State and therefore, the State was wrong in treating them alike. It was said that treatment of unequals as equals had resulted in an infringement of Art. 14 of the Constitution. It was also submitted that vehicles holding inter-State permits under inter-state agreements were still exempt from tax and this was also a violation of Art. 14 of the Constitution. Another contention raised was that there was some sort of promissory estoppel which prevented the State Government from withdrawing the exemption. Yet another argument was that the withdrawal of the exemption was arbitrary and therefore, judicial review was necessary. These and other like submissions which were made to us in our opinion, fall in the category of arguments which. we mentioned earlier, have only to be stated to be rejected. The answers are self-evident., The submissions are totally without merit and we see no justification for increasing the length of our judgment by further futile discussion.

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

Explanation:
0[ds]It is true that the object of enacting sec. 63 (7) by the Parliament was to promote all-India and inter-state tourist traffic. But taxes on vehicles .. suitable for use on roads is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. True again, Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, as explained by us at the outset, it is therefore open to the Parliament to lay down the 17 principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting S. 63 (7) of the Motor Vehicles Act refrained from indicating any such principles, eit her expressly or by necessary implication. The States power to tax and to exempt was left uninhibited. It may be that a a State legislation, plenary or subordinate, which exempts "non-home-state tourist vehicles" from tax would be advancing the object of sec. 63 (7) of the Motor Vehicles Act and accelerating inter-state trade, commerce and intercourse. But merely by Parliament legislating sec. 63 (7), the State Legislatures are not obliged to fall in line and to so arrange their tax laws as to advance the object of sec. 63 (7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under Art. 301 by refusing to exempt or by withdrawing an exemption. Not to pat on the back is not to stab in the back. True, straw by straw, the burden of taxation on tourist vehicles increases as each State adds its bit of straw, but, then, each State is concerned with its coffers and has the right to tax vehicles using its roads; and, the contribution which a tourist carriage is required to make to its treasury is no more than what other contract carriages are required to make. We are firmly of the view that there is no impairment of the freedom under Art. 301. The special submission on behalf of the Karnataka operators that the withdrawal by the Karnataka Government of the exemption granted to outsiders has resulted in the Karnataka operators having to pay tax in every State in the country and, therefore, the withdrawal has impaired the freedom under Art. 301 is but the same general sub- mission, seen through glasses of a different tint. It does not even have the merit that the withdrawal of the Karnataka exemption affects them directly. The submission is rejected.One of the submissions made to us was that if there was a misuse of the all-India permits, the remedy was to punish the wrong doers by taking appropriate action against the wrong-doers by cancelling the permit, if necessary, but not to withdraw the benefit of the exemption altogether, even in the case of honest operators. That is a matter for the Legislature and its delegate to decide but not for the court. If the situation had become so malignant that drastic action was called for, it is not for the court to substitute its judgment to say that the object could perhaps be well achieved by adopting a less drasticwas submitted that all-India tourist vehicles do not use the roads of the State as much as the contract carriages operating in the State and therefore, the State was wrong in treating them alike. It was said that treatment of unequals as equals had resulted in an infringement of Art. 14 of the Constitution. It was also submitted that vehicles holding inter-State permits under inter-state agreements were still exempt from tax and this was also a violation of Art. 14 of the Constitution. Another contention raised was that there was some sort of promissory estoppel which prevented the State Government from withdrawing the exemption. Yet another argument was that the withdrawal of the exemption was arbitrary and therefore, judicial review was necessary. These and other like submissions which were made to us in our opinion, fall in the category of arguments which. we mentioned earlier, have only to be stated to be rejected. The answers are self-evident., The submissions are totally without merit and we see no justification for increasing the length of our judgment by further futile discussion.