REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2008
(Arising out of SLP (C) No.10275 of 2007)
R. Senthi Babu ....
Appellant
versus
State of Tamil Nadu and Anr. ....Respondents
CIVIL APPEAL NO. OF 2008
(Arising out of SLP (C) No.10277 of 2007)
JUDGMENT
Dr. ARIJIT PASAYAT, J.
1. Leave granted.
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2. The short question which arises for determination in these Civil Appeals
concerns challenge to the Constitutional validity of Tamil Nadu Motor
Vehicles Taxation (Amendment) Act, 1998, by which initially the rate of tax
in respect of contract carriage stood increased from Rs.1500/- per seat per
quarter to Rs.2000/- per seat per quarter, and subsequently the said rate
stood enhanced from Rs.2000/- per seat per quarter to Rs.3000/- per seat per
quarter vide Notification No.1184 dated 30.11.2001 with effect from 1st
December 2001.
3. The basis of the challenge rests on the uneven burden placed on the
owners of contract carriage vis-a-vis stage carriage. Broadly it is contended
that there is no rational in the imposition of the levy, that tax is imposed
indiscriminately, that it is levied to cross-subsidize stage carriage and that
uneven burden has been placed on the owners of contract carriage which
has no nexus with the services or amenities provided.
4. Generally, in a matter of this nature, the quantifiable data forms the
basis of the challenge. At the initial stage when the petition is filed in such
cases there has got to be a precise formulation of the ground of challenge
from the side of the appellants based on some statistical data as to
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disproportionality of the rate of tax. It is only thereafter that the burden will
shift on to the State to submit quantifiable and measurable data.
5. In the present case we find that the initial burden on the appellants
itself has not been discharged in the sense that the petitions filed before the
High Court were very sketchy. A challenge of this nature requires the
appellants to furnish greater details before the State could be called upon to
submit quantifiable and measurable data justifying the impugned rate.
Ultimately, it is the State which has to meet the allegations made in the writ
petitions and if those allegations made in the writ petitions are vague,
inaccurate or insufficient then it would not be possible for the State to
submit its reply/data to the Court.
6. One more aspect in these cases also needs to be mentioned. It has
been argued before us that the tax in question is a compensatory tax. Certain
judgments of this Court are also relied upon in this regard, the latest being
the judgment in the case of Jindal Stainless Ltd. (2) and Another vs. State of
Haryana and Others [(2006) 7 SCC 241].
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7. In our view, this repeated increase in the rate of tax, particularly the
incidence of which is more on the contract carriage vis.-a.vis. stage carriage
raises question of public importance. At the same time the State can
certainly rely upon the data available to show cross subsidization, if it so
exists in a given case, by which stage carriage gets subsidized in public
interest.
8. Keeping in mind the gamut of the dispute involved, we are of the
view that we cannot interfere with the impugned judgment of the High
Court, particularly when the pleadings at the initial stage were insufficient.
9. Realizing this difficulty, learned counsel appearing on behalf of the
appellants fairly stated that he would seek permission of this Court to
withdraw the civil appeals/special leave petitions with liberty to file proper
writ petition in the High Court giving requisite details and available data.
Normally, we would not have granted such permission. However, as stated
above, questions of public importance arises in these matters, particularly in
the context of the principles of proportionality under Article 14 of the
Constitution and the later development of law as indicated by this Court in
the case of Jindal Stainless Ltd. (Supra).
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10. In the circumstances we permit the appellants herein to withdraw the
Civil Appeals with liberty to file proper writ petition, if so advised. We
make it clear that we do not find any infirmity in the impugned judgment of
the High Court which is based on the petition originally filed by the
petitioners. Subject to above, Civil Appeals stand dismissed with no order
as to costs. We make it clear that if a proper writ petition is filed giving
requisite data to the satisfaction of the High Court, then any observation
made in the impugned judgment will not come in the way of the appellants.
All contentions of both sides are expressly kept open.
11. Similar order was passed in a group of cases i.e. Tamil Nadu Omni
Bus Owners Association v. State of Tamil Nadu & Anr.( i.e. Civil Appeal
No.1177 of 2006 etc. disposed of on 28.11.2007).
12. Subject to the above, the Civil Appeals are dismissed with no orders
as to costs.
…………………………………..J.
(Dr. ARIJIT PASAYAT)
………………………………….J.
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(Dr. MUKUNDAKAM SHARMA)
New Delhi,
December 16, 2008
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