{"id":24829,"date":"1973-11-20T00:00:00","date_gmt":"1973-11-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/a-s-karthikeyan-etc-vs-state-of-kerala-anr-on-20-november-1973"},"modified":"2018-11-05T04:07:29","modified_gmt":"2018-11-04T22:37:29","slug":"a-s-karthikeyan-etc-vs-state-of-kerala-anr-on-20-november-1973","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/a-s-karthikeyan-etc-vs-state-of-kerala-anr-on-20-november-1973","title":{"rendered":"A. S. Karthikeyan Etc vs State Of Kerala & Anr on 20 November, 1973"},"content":{"rendered":"
Supreme Court of India<\/div>\n
A. S. Karthikeyan Etc vs State Of Kerala & Anr on 20 November, 1973<\/div>\n
Equivalent citations: 1974 AIR 436, \t\t 1974 SCR (2) 321<\/div>\n
Author: A Ray<\/div>\n
Bench: Ray, A.N. (Cj), Mathew, Kuttyil Kurien, Chandrachud, Y.V., Alagiriswami, A., Bhagwati, P.N.<\/div>\n
           PETITIONER:\nA.   S. KARTHIKEYAN ETC.\n\n\tVs.\n\nRESPONDENT:\nSTATE OF KERALA & ANR.\n\nDATE OF JUDGMENT20\/11\/1973\n\nBENCH:\nRAY, A.N. (CJ)\nBENCH:\nRAY, A.N. (CJ)\nMATHEW, KUTTYIL KURIEN\nCHANDRACHUD, Y.V.\nALAGIRISWAMI, A.\nBHAGWATI, P.N.\n\nCITATION:\n 1974 AIR  436\t\t  1974 SCR  (2) 321\n 1974 SCC  (1) 258\n\n\nACT:\nKerala\tMotor  Vehicles (Taxation of  Passengers  and  Goods\nAmendment Act (18 of 1971) and Motor Vehicles (Kerala  Third\nAmendment) Act 434 of 1971)-Validity of.\n\n\n\nHEADNOTE:\nSection\t 43 of the Motor Vehicles Act, 1939, lays down\tthat\nthe State Government may, from time to time issue directions\nto  the State Transport Authority regarding fixing of  fares\nand  freights for stage carriages and public carriages,\t and\ns.  44(3)  requires the State Transport\t Authority  to\tgive\neffect to such directions.  In exercise of these powers\t the\nfare  structure\t had been fixed for stage carriages  in\t the\nrespondent-State   from\t time  to  time.   In\t1963,\tthe.\nrespondent  decided, to increase the motor vehicles tax,  to\nintroduce  tax\ton passengers and goods, and to\t modify\t the\nfare  structure suitably for stage  carriages.\t Accordingly\nunder the Kerala Motor Vehicles Taxation Act, 1963, the\t new\nrate  of  tax  was fixed.  Section 3  of  the  Kerala  Motor\nVehicles.  (Taxation  of Passengers and\t Goods)\t Act,  1963,\nprovided that there shall be levied and paid to the  Govern-\nment   a  tax  on  all\tpassengers,  luggage  etc  and\t the\ncomposition fee Was fixed per seat per quarter.\t Also, after\nhearing the representations and objections of the  operators\nand  the public, there was a revision, as from July 1,\t1963\nof the fare structure of stage carriages in the State.\tTill\nJuly  1966,  the operators collected tax on  passengers\t and\ngoods and paid the taxes to the Government, But in 1966, the\noperators  agitated  for enhancement of fares and  look\t the\nmatter\tto  Court.   In\t Thomman  &  ors.  v.  The  Regional\nTransport Officer, Ernakulam & Anr.  I.L.R. [1968] 2  Kerala\n153  the, High Court held that the tax under  the,  1963-Act\n(Taxation of Passengers and Goods) was v., tax on passengers\nand.  goods.,  and: not on the operators  as,  contended  by\noperators.  but held that the Act contained no\tsatisfactory\nprovision for its collection, in that it was not clear\tthat\nthe tax was payable,by the passengers to the operators.\nThereafter,   the   Kerala  Motor  Vehicles   (Taxation\t  of\nPassengers and Goods.  Amendment) Act 18 of 1971 was  passed\namending  the  1963-Act.   Two\tnew  sub-sections  to  s.  3\nprovided  that\tthe  tax  levied  shall\t be  paid  by\tthe,\npassengers  and\t consignors of the goods  to  the  operators\nalong  with fares and freights and that the operators  shall\nbe liable to pay the tax so levied to the Government.  There\nwas  also  a  validating section in Act 18  of\t1971,  which\nstated that taxes levied or collected shall be deemed to  be\nand  to have always been levied or collected  in  accordance\nwith law as if s. 3 of the 1963-Act, as amended by Act 18 of\n1971 was in force at all material times.  Another Act, Motor\nVehicles (Kerala Third Amendment) Act 34 of 1971, effected 2\nprincipal changes, namely,, (1) the addition of sub. s. (1A)\nto  s. 43 of the Motor Vehicles Act which provided that\t any\ndirection  regarding  the  fixing  of  fares  and   freights\nprospectively,\tor retrospectively might provide  that\tsuch\nfares and freights shall be inclusive\tof  the tax  payable\nby passengers or consignors of goods; and (2) a\t validate\nprovision  validating  the  directions,\t relating  to  fares\nissued on or  after March 1.\t 1963  to be inclusive\tof\nthe tax payable under the 1963-Act.With\t\t effect\nfrom,October 15, 1971, the Government also revised the rates\noffare.\nThe operators contended that : (1) The provisions of Acts 18\nand 34 of 1971 amounted to a tax not on passengers and goods\nbut  on the income of the operators, (2)  the  retrospective\nvalidation of levy an( collection amount to a tax on amounts\ncollected  as  fare and therefore the tax was a new  tax  on\nfare, and (3) the retrospective validation was\tunreasonable\nbecause the operators were made liable for a tax which\tthey\ndid  not  in  fact collect during the period  July  1966  to\nOctober\t 14 1971, when they were agitating  for\t enhancement of fa\nre.\n322\nRejecting the contentions. the Court,\nHELD  :\t (1)  The Provisions of the  1963-Act  (taxation  of\npassengers  and goods) indicate that the tax under that\t Act\nis  a  tax on passengers and owners of goods  and  that\t the\noperators  only\t collected  the tax.   When  passengers\t and\nowners\tof  goods pay the tax, the  Government\trequires  an\nagency to collect it and the operators are such agents.\t The\npower  to enact such a measure is derived from entry  56  of\nthe   State  List  If  of  the\tSeventh\t Schedule   to\t the\nConstitution. [329B-C.\tD-F]\nM\/s  Sainik  Motors,  Jodhpur  &  Others  v.  The  State  of\nRajasthan,<\/a> [1962] 1 S.C.R. 517, followed.\n(2)  The   tax\t recovered  retrospectively   as   well\t  as\nprospectively  is  the\tsame tax, a tax\t on  passengers\t and\ngoods.\tThe tax is imposed by the 1963 Act and its character\nas well as incidence is determined by the 1963-Act.  No\t tax\nis imposed or collected under Act 34 of 1971, nor was  there\nany alteration of the character of the tax which had already\nbeen  imposed.\tThe machinery for its collection  which\t was\nimplicit  in  the 1963-Act was made explicit by\t Act  18  of\n1971.\tThe State Government fixed the fare in July 1,\t1963\nafter  taking into account the element of tax on  passengers\nand  goods  imposed  by\t the  1963-Act.\t  The  operators  in\ncollecting  fares from passengers in fact collected the\t tax\ndue  from  them\t under the 1963-Act  along  with  the  fare.\nSection\t 43(A) of the Motor Vehicles Act only clarified\t the\nfactual basis.\tIt is competent to the State Legislature  to\namend  the  Motor Vehicles Act by enacting  that  directions\nregarding  fares can be inclusive of tax.  The two  Acts  of\n1971  were  only for the purpose of  dispelling\t the  doubts expre\nssed in Thomman Case.' [333C-G]\nRai  Ramkrishna\t & Others v. The state of  Bihar,  [1964]  1\nS.C.R. 897, explained ;and followed.\nS.   Srikantiah\t & Ors v. The Regional Transport  Authority,\nAnantapur & Ors.,<\/a> [1971] Supp.\tS.C.R. 816, followed.\n(3)  The correspondence and representations by the operators\nand  notes  of\thearing\t prepared  by  the  Secretariat\t  in\nconnection  with  the  revision of  fares,  show,  that\t the\nincidence of the increase in the motor vehicles tax and\t the\nincrease  in tax liability on account of tax  on  passengers\nand  goods were all taken into consideration in\t fixing\t the\nfare  with effect from July 1, 1973.  Since the tax  was  an\nelement\t included in the fare structure,  the  retrospective\nvalidation cannot be said to be unjust. especially  because\nthe  operators\thad collected the  entire  amount.  [332B-C;\n334C-D]\n\n\n\nJUDGMENT:\n<\/pre>\n
ORIGINAL  JURISDICTION: Writ Petition No. 326 of 1972 &\t 203
\nof 1973.\n<\/p>\n
Under  Article\t32  of the Constitution\t of  India  for\t the
\nenforcement of fundamental rights.\n<\/p>\n
Civil Appeal No. 1875 of 1972.\n<\/p>\n
Appeal\tby Special Leave from the Judgment and\tOrder  dated
\nthe 15th March, 1972 of the Kerala High Court at Emakulam in
\nO. P No. 23 of 1971.\n<\/p>\n
Civil Appeal No. 1765 of 1972.\n<\/p>\n
From the Judgment and Order dated the 16th March,1972 of the Keral
\na High Court Ernakulam in O.P. No. 3034 of 1971.
\nCivil Appeal No. 27 of 1973.\n<\/p>\n
From  the Judgment and Order dated the 13th March,  1972  of
\nthe kerala High Court in O.P. No. 2320 of 1971.
\nCivil Appeal No. 361 of 1973.\n<\/p>\n
323<\/span><\/p>\n
From  the Judgment and Order dated the 15th March. 1972\t “of
\nthe Kerala High Court in O.P. No. 2453 of 1971.
\nV.   M.\t Tarkunde,  C. K. Viswanatha Iyer,  K.\tjayaram\t and
\nR.Chandrasekharan for the petitioners (in W. P. No. 326\/72).
\nC.   K.\t Viswanatha Iyer, K. Jayram and R.  Chandrasekharan.
\nfor the petitioners, (in W. P. No. 203\/73).
\nM.   M.\t Abdul Khader, V. A. Syed Mohammed,  K.\t Paripoornam
\nand P.\t  C.  Chandi,<\/a>  for  respondent No. 1  (in  W.P.\t No.
\n203\/73).\n<\/p>\n
S.   V. Gupte, V. Sivaraman Nair,, C. J. Balakrishnan and A.
\nSreedhar Nambiar. for the appellant (in C. A. No. 1875\/72).
\nV.   Sivaraman\tNair, C. J. Balakrishnan and  A.  Sreedharan
\nNambiar, for the appellants, (in C. A. No. 1765\/72).
\nV.   Bhaskaran\tNambiar and A. Sreedharan Nambiar,  for\t the
\nappellant (in C. A. No. 27\/73).\n<\/p>\n
K.   T.\t Harindranath  and A. Sreedharan  Nambiar,  for\t the
\nappellants, (in C. A. No. 361\/73) and for Intervener No. 5.
\nS.   V. Gupte and A. Sreedharan Nambiar, for Intervener\t No.\n<\/p>\n
1.
\nA.   Sreedharan Nambiar, for Intervener Nos. 2, 3 and 6.
\nThe Judgment of the Court was delivered by
\nRAY  C.J. These matters raise questions on the\tvalidity  of
\nlegislative  measures  of  levy and  collection\t of  tax  on
\npassengers  and goods carried by stage carriages and  public
\ncarrier\t vehicles.   Stage carriages  carry  passengers\t and
\npublic\tcarriers  carry goods.\tThe validity of\t the  Kerala
\nMotor Vehicles (Taxation of Passengers and Goods  Amendment)
\nAct,  1970 for the sake of brevity called Act 18 of 1971  as
\nwell  as  the Motor Vehicles (Kerala Third  Amendment)\tAct,
\n1971  for  the\tsake of brevity called Act  34\tof  1971  is
\nchallenged.\n<\/p>\n
The petitioners in the writ petitions and the appellants  in
\nCivil Appeals are operators of stage carriages in the, State
\nof Kerala.\n<\/p>\n
The questions which fall for consideration in these  matters
\nare  these.   First,,  does Act 18 of 1971  levy  a  tax  on
\npassengers or does it levy a tax on the income of  operators
\n?  Second,  is\tthe retrospective  validation  of  levy\t and
\ncollection of taxes by Act 18 of 1971 legal- ?\tThird, is it
\ncompetent  to  the legislature to amend section\t 43  of\t the
\nMotor  Vehicles Act, 1939 called the 1939 Act by Act  34  of
\n1971 to include retrospectively tax within fare ?,
\nSection\t 43  of\t the  1939 Act\tlays  down  that  the  State
\nGovernment  may,  from time to time by notification  in\t the
\nOfficial  Gazette, issue directions to the  State  Transport
\nAuthority  regarding fixing of fares and freights for  stage
\ncarriages, contract carriages and public carriages.  Section
\n44(3) of the 1939 Act requires the State Transport Authority
\nto give effect to such directions issued ‘by the Government.
\nIt  is in exercise of these powers that the  fare  structure
\nfor stage carriages is fixed from time to time.\n<\/p>\n
324<\/span><\/p>\n
The  State of Kerala came into existence with effect from  1
\nNovember  1956 by the, Reorganisation of  States  comprising
\nthe  Malabar  area  of\tthe  former  Madras  State  and\t the
\nTravancore-Cochin area.\t The fare structure in force in\t the
\nMalabar area as on 1 November, 1956 was 3.90 nP per mile and
\nthe minimum fare was 31 nP for distances less than 8  miles.
\nThe  fare  structure in Travancore-Cochin area\tprior  to  1
\nNovember,  1956 was 3.90 nP per mile and the minimum was  19
\nnP.   There was difference only in the minimum fare  between
\nMalabar and Travancore-Cochin areas.\n<\/p>\n
In  1958 the difference between the minimum fare of the\t two
\nwas  eliminated.  The, Kerala Government on 15\tApril,\t1958
\nincreased the rate of fare to 4 nP per mile and the  minimum
\nfare was 16 nP.\n<\/p>\n
Prior to 1 July, 1963 there was no provision for the levy of
\ntax  on passengers and goods in the Travancore-Cochin  area.
\nIn the Malabar ,area the Madras Motor Vehicles (Taxation  of
\nPassengers  and Goods) Act 1952 was in force over and  above
\nthe Madras Motor Vehicles Taxation Act.\t In the\t Travancore-
\nCochlea\t area there was only the  Travancore-Cohin  Vehicles
\nTaxation  Act  14 of 1950.  The incidence ,of tax  on  stage
\ncarriages and public goods carriages was the same after\t the
\nformation of the Kerala State in 1956.\tIn the Malabar\tarea
\na tax of Rs. 25\/- per seat per quarter was levied under\t the
\nMotor  ‘Vehicles Taxation Act and a compounded rate. of\t Rs.
\n12.50  per  seat  ‘per\tquarter\t under\tthe  Motor  Vehicles
\n(Taxation  of Passengers and Goods) Act.  The  aggregate  of
\nthe  two taxes in the Malabar area was ,Rs. 37.50  per\tseat
\nper  quarter  in  respect  of  stage  carriages.   In\tthe,
\nTravancore–Cochin  area the rate of vehicles tax under\t the
\nVehicles  Taxation Act was, Rs. 37-50 per seat\tper  quarter
\nequal to the total incidence of tax in the Malabar area\t for
\nstage carriages.\n<\/p>\n
The  fare structure throughout the Kerala State\t after\t1958
\nwas  4 nP per mile and the minimum was 16 nP.  In  1961\t the
\nGovernment  of Kerala continued the fare at 4 nP.  per\tmile
\nbut reduced the minimum from 16 nP to 10 nP.\n<\/p>\n
In   this   background,\t  the  Government   of\t Kerala\t  on
\nconsideration\tof proposals  made   by\t  the\tTransport
\nCommissioner  decided in the month ,of February, 1963  first
\nto  increase the motor vehicles tax throughout\tthe,  State;
\nsecond, to introduce tax on passengers and goods through-out
\nthe  State;  and,  third  to  increase\tthe  fare  structure
\nsuitably for stage carriages.  The incidence of tax at’\t Rs.
\n37.50 per seat per quarter prevalent in the Kerala State was
\nlow  Compared to. the incidence of vehicle tax in the  three
\nneighboring States of Madras, Mysore and Andhra Pradesh.  In
\nMadras,\t the  total incidence of vehicle tax  per  seat\t per
\nquarter\t was Rs. 40\/- and composition fee under Taxation  of
\nat  Passengers\tand Goods Act was Rs. 25\/-  aggregating\t Rs.
\n65\/-  in 1962.\tIn Mysore, the rate was Rs. 57.50  per\tseat
\nper  quarter compose vehicle tax and composition  fee  under
\nTaxation of Passengers and Goods Act. in Andhra Pradesh, the
\ntotal comprising the taxation of passengers and vehicle\t tax
\nwas Rs. 670 in 1963.\n<\/p>\n
In  1963 the, Kerala Motor Vehicles (Taxation of  Passengers
\nand  Goods Act, 1963 for the sake brevity called Act  25  of
\n1963  was  ,enacted.  Section 3 of Art 25 of  1963  provided
\nthat “there shall be
\n325<\/span>
\nlevied, and paid to the Government a tax on all\t passengers,
\nluggage\t and  goods carried by stage carriages\tand  on\t all
\ngoods transported by public carrier vehicles at the rate  of
\n10 nP in the rupee on the fares and freights payable to\t the
\noperators of such stage carriages and at the rate of 5 nP in
\nthe  rupee on the freights payable to the operators of\tsuch
\npublic\tcarrier vehicles.” The Act 25 of 1963 was  published
\non  15 April, 1963 in the Kerala Gazette  Extraordinary\t and
\nwas brought into force with effect from 1 July,. 1963.\t The
\nAct 25 of 1963 contained these provisions.  The operator  is
\npermitted   to\tcompound  the  tax  assessable\ton  him\t  in
\ncircumstances\tand  conditions\t mentioned   therein.\t The
\noperator is required to submit returns in prescribed  forms.
\nThe  operator  is to  pay  tax\tevery  month.\tThere  are
\nprovisions for assessment, penalty, production of accounts.
\nThe   State   Government  of  Kerala   published   a   draft
\nnotification  on  4  March,  1963  for\trevising  the\tfare
\nstructure.  After hearing the representations and objections
\nof the operators and the public, the final notification\t was
\nissued on 13 June, 1963 and was published in the Gazette  on
\n18 June, 1963.\tBy this notification, the fare was fixed  at
\n3 nP per kilometre and the minimum fare was fixed at 20 nP.
\nThe  rate  of tax under the Kerala Motor  Vehicles  Taxation
\nAct,  1963  was fixed at Rs. 35\/- per seat  per\t quarter  in
\nrespect of vehicles where the total distance permitted to be
\noperated  did  not  exceed 200 kilometers and  Rs.  401-  in
\nrespect of vehicles where the total distance permitted to be
\noperated  per day exceeded 200 kilometres.  The\t composition
\nfee  payable under Act 25 of 1963 was fixed at Rs. 25\/-\t per
\nseat per quarter.  Therefore, the total incidence of the two
\ntaxes under Motor Vehicles Taxation Act and the Taxation  of
\nPassengers  and Goods Act was Rs. 60\/- per seat per  quarter
\nfor  vehicles not ,operating in excess of 200  kilometres  a
\nday and Rs. 65\/- per seat per quarter in respect of vehicles
\noperating in I excess of 200 kilometres a day.
\nAs  a  result  of Act 25 of 1963, the  fate  structure\twith
\neffect\tfrom  1 July, 1963 was 3 nP per\t kilometre  and\t the
\nminimum was 20 nP.  Prior to 1 July, 1963, the rate of\tfare
\nwas 2.5 nP per kilometre and the minimum was 10 nP.
\nAfter  the fixation of fare structure on 1 July, 1963  there
\nwere repeated representations from operators to increase the
\nfare  and representations from the public for  reduction  of
\nthe minimum of 20 nP. A transport High level Committee\t%+as
\nconstituted with Shri C. M. Mathew a retired District  Judge
\nas  the Chairman.  The Committee recommended that there\t was
\nno  need  to raise the fare structure but it  recommended  a
\nreduction  of  the  minimum  fare from\t20  Ps.\t to  10\t Ps.
\nPresumably  pursuant to the recommendation,  a\tnotification
\nwas issued on 24 April, 1964 reducing the minimum from 20 Ps
\nto 10 Ps.\n<\/p>\n
From  the  year\t 1963 to 1966, the  operators  paid  to\t the
\nGovernment  taxes  under  Act 25  of  1963.   The  operators
\ncollected tax on passengers and goods.\n<\/p>\n
But in 1966 the operators agitated for enhancement of  fare.
\nEventually the operators went before the Kerala High  Court.
\nThe
\n326<\/span>
\noperators challenged Act 25 of 1963.  The main contention of
\nthe operators was that Act 25 of 1963 imposed the tax not on
\nthe  passengers\t or  consignors\t of the\t goods\tbut  on\t the
\noperators  who\tcarry  the passengers  or  the\tgoods.\t The
\ndecision  of-the Kerala High Court in Thomman & Ors  v.\t The
\nRegional Transport Officer, Ernakulam(1) reported in  I.L.R.
\n(1968)\t2 Kerala 153 was on 4 March, 1968.  The\t High  Court
\nheld that the tax is a tax on the passengers and goods.\t The
\nHigh Court expressed the view that there was no satisfactory
\nprovision  for\tthe collection of the tax.  The\t High  Court
\nobserved  that provision must be made for the collection  of
\nthe  tax  from the passenger as tax specifying\tthe  quantum
\ncalculated and computed on the basis of the provision of the
\nAct.\n<\/p>\n
 Soon  after the decision in Thomman case (supra) the  State
\nGovernment  issued a notification dated 29 April,  1968\t and
\npublished  it on 30 April, 1968.  This notification  was  to
\nthe  effect not the fare with effect from 1 July,  1963\t was
\ninclusive  of the tax leviable under Act 25 of 1963.   There
\nwas  also  a draft amendment to the  Kerala  motor  Vehicles
\n(Taxation of Passengers and Goods) Rules, 1963.\t A new\trule
\nnumbered  rule 3(2) was inserted.  That new rule was to\t the
\nfollowing effect :-\n<\/p>\n
\t      “The  fares  and freights collected  from\t the
\n\t      passengers or consignors of goods as the\tcase
\n\t      may be, may include in it, such proportion  of
\n\t      the  tax as is payable under section 3 of\t the
\n\t      Act and the prescribed authority while  making
\n\t      the   assessment\tunder  sub-rule\t (i)   shall
\n\t      calculate the tax due to the Government  under
\n\t      the act from the fares and freights  collected
\n\t      on the same Proportion”.\n<\/p><\/blockquote>\n
The  purpose  of  the 1968 notification was  that  the\tfare
\nalready fixed and which was effective from 1 July, 1963\t was
\ninclusive  of the tax and that such tax was being  collected
\nfrom the passengers and the consignors of the goods.
\nThe 1968 notification was also challenged in the Kerala High
\nCourt.\t The  Government represented that no  tax  would  be
\ncollected  without complying with the directions in  Thomman
\ncase (supra) On this representation of the State, the Kerala
\nHigh Court dismissed the writ petitions.\n<\/p>\n
Thereafter  a bill was introduced in the Assembly  to  amend
\nAct  25 of 1963.  The Bill was published in the\t Gazette  on
\n11,  Aught,  1969.   The  Bill\twas  to\t have  come  up\t  or
\nconsideration  on 9 January. 1970. it was not taken  up\t for
\nconsideration on that day.  Instead an Ordinance  (ordinance
\nNo.   1\t of  1970)  was\t promulgated  on  4  January,\t1970
\nintroducing  amendment\ts  to Act 25  of  1963.\t  This\t1970
\nOrdinance  was challenged in the Kerala.High Court.   On  19
\nJanuary, 1970 the High Court passed an order that collection
\nof  tax\t under Act 25 of 1963 as amended by Ordinance  1  of
\n1970  is  stayed  in  respect of the  period  prior  to\t its
\npublication in the Karela Gazette on 5 January, 1970 to\t the
\nextent\tthe operator has not collected the same\t during\t the
\nsaid  Period” The operators resolved to collect 10 per\tcent
\nextra over the fare from the month of January,
\n327<\/span>
\n1970.\tThe transport Commissioner asked them not to do\t so.
\nOn  2 February, 1970 a conference was held by  the  Minister
\nfor Transport.\tThe operators agreed that no enlaced  amount
\nwould  be  collected  by them pending the  decision  of\t the
\nKerala High Court.  The Government issued instructions on 24
\nFebruary, 1970 that until further orders from the Government
\n“the  operators shall not be required to pay the  tax  under
\nAct  25\t of  1963 for the period from  5  January,  1970  in
\nrendering services in respect of the concerned vehicle\tsuch
\nas issue and renewal of permits etc.”\n<\/p>\n
The impugned Act 18 of 1971 was passed by the Legislature on
\n28 February, 1970 and received the assent of the Governor on
\n1 June, 1971.  Act 18 of 1971 introduced two sub-sections to
\nsection 3 of the Act 25 of 1963.  Act 18 of 1971 was enacted
\nto  clarify  the  position  with  regard  to  levy  of\t and
\ncollection of taxes from passengers and consignors of  goods
\nin  accordance\twith  the observations of  the\tKerala\tHigh
\nCourt,in  Thomman case (supra).\t The High Court observed  in
\nthat  case that provision should be made for the  collection
\nof the tax from the passenger as tax specifying the  quantum
\ncalculated  and\t computed on the basis of provision  in\t the
\nAct.   The  High Court also observed that the tax  would  be
\npayable\t to the operator who was liable to pay the  same  to
\nthe State.  It is in this background that Act 25 of 1963 was
\namended\t by Act 19 of 1971.  Act 25 of 1963 contained  inter
\nalia the provisions that “there shall be levied and paid  to
\nthe Government a tax on all passengers, luggage and  goods”.
\nThe provision was amended by Act 18 of 1971 by\tsubstituting
\nthe  words  “there shall be levied a tax” in  place  of\t the
\nwords  “there shall be levied and paid to the  Government  a
\ntax”.  The result of the amendment was that “there shall  be
\nlevied\ta  tax on all passengers, luggage and  goods”.\t The
\nformer wording of section 3 that “there shall be levied\t and
\npaid. to the Government a tax on all passengers, luggage and
\ngoods”\twas,  said by the High Court to raise doubts  as  to
\nwhether the provision clearly said-that the tax was  payable
\nby the passengers to the operators.\n<\/p>\n
The  two new sub-sections introduced to section 3 by Act  18
\nof  1971 are first that the tax levied under subsection\t (1)
\nshall  be  paid by the passengers or the consignors  of\t the
\ngoods  as  the case may be to the operators along  with\t the
\nfares  or  freights payable to the operators  of  the  stage
\ncarriages or the goods vehicles.  The second introduction is
\nthat  the  operator shall be liable to pay thee\t tax  levied
\nunder  sub-section (1) on all passengers, luggage  or  goods
\ncarried by stage carriages and on all goods carried by goods
\nvehicles  of which he is the operator to the  Government  in
\nthe manner provided in this Act.\n<\/p>\n
The other provision in Act 18 of 1971, is validating section
\nwhich is as follows :-\n<\/p>\n
\t      “Notwithstanding any judgment, decree or order
\n\t      of any court, all taxes levied or collected or
\n\t      purposed\tto  have been  levied  or  collected
\n\t      under  the  Principal Act before the  date  of
\n\t      commencement  of this section shall be  deemed
\n\t      to  be  and  to have  always  been  levied  or
\n\t      collected in accordance with law as if section
\n\t      3 of the principal Act as amended by this\t Act
\n\t      was  in force at all material times when\tsuch
\n\t      tax was
\n\t      9-522sup.\t CI\/74
\n\t      328<\/span>
\n\t      levied  or  collected,  and no  such  levy  or
\n\t      collection shall be called in question on\t the
\n\t      ground  that it was without authority of\tlaw,
\n\t      and  all taxes so levied or purported to\thave
\n\t      been levied but not collected may be collected
\n\t      in  accordance  with  the\t provisions  of\t the
\n\t      principal Act as amended by this Act :<\/p><\/blockquote>\n
\t      Provided that nothing in this Act shall render
\n\t      any  person  liable  to be  convicted  of\t any
\n\t      offence  in  respect  of anything\t done\tor
\n\t      omitted  to be done by him before the 5th\t day
\n\t      of  January, 1970 if such act or omission\t was
\n\t\t\t    not an offence under the principal Act
\n  before
\n\t      the  aforesaid date but for the provisions  of
\n\t      this Act.”\n<\/p>\n
The  validating section in Act 18 of 1971 stated that  taxes
\nlevied or collected shall be deemed to be and to have always
\nbeen  levied  or  collected in accordance  with\t law  as  if
\nsection 3 of Act 25 of 1963 as amended by act 18 of 1971 was
\nin  force  at. all material times.  The\t validating  section
\nbecame\tnecessary  to  render levy  as\twell  as  collection
\nlawful.\n<\/p>\n
Act  18\t of 1971 received the assent of the  Governor  on  1
\nJune,  1971.  On the same day Ordinance No. 15 of  1971\t was
\npassed.\t This Ordinance was replaced by Act 34 of 1971.\t Act
\n34  of\t1971  effected two  principal  changes.\t  First,  it
\namended section 43 of the Motor Vehicles Act, 1939 by adding
\nsub-section  (1A)  to section 43 of that Act.\tThe  amended
\nsub-section   (1A)  stated principally\tthat  any  direction
\nregarding the fixing of fares and freights prospectively  or
\npectively might provide that such of ares and  frights”shall
\nbe inclusive the tax payable by passengers or consignors  of
\ngoods” The other  change effected by Act 34 of 1971 is\tthat
\nit  validated  into alia the directions relation   to  fares
\nissued\ton  or\tafter  1 March, 1963  or  thereafter  to  be
\ninclusive of the tax payable under Act 25 of 1963.
\nThe challenge by the operators to the validating sections in
\nAct 18 of 1971 and Act 34 of 1971 is primarily based on\t the
\nground that the operators did not and could not collect\t tax
\nfrom the passengers because  the fare fixed with effect from
\n1  July, 1963 did not include the tax imposed by Act  25  of
\n1963.  The other challenge is that the directions issued  by
\nthe  State  Government before the amendment  of\t  directions
\nsection\t 43  of the 1939 Act about fixing of  fare  did\t not
\ninclude tax and therefore, retrospective validation of\tfare
\nto be inclusive of tax was to levy tax on fare.
\nThe  three principal contentions on behalf of the  operators
\nwith  regard to the legality of Acts 18 and 34 of  1971\t are
\nthese.\tFirst, the impugned provisions amount to a tax\t:dot
\non  passengers\tand goods but on the  income  of  operators.
\nSecond\t the   impugned\t provisions  as\t  to   retrospective
\nvalidation of levy and collection are a tax on amounts which
\nare collected as fare and, therefore retrospectively it is a
\ntax  on\t fare  and  fare  alone.   Third  the  retrospective
\nvalidation   is\t unreasonable  because\tthe  operators\t are
\nretrospectively\t  tax  which they did not in  fact  collect.
\nAll these contentions turn on the question as to Whether tax
\nwas  included  as  an  element in  the\tfare,  which  became
\neffective from 1 July, 1963.\n<\/p>\n
329<\/span><\/p>\n
The question whether the statutes, viz., Act 25 of 1963\t and
\nAct  18\t of 1971 impose a tax on passengers  and  owners  of
\ngoods  or  is  a tax on the income  of\toperators  has\tbeen
\nrightly\t held  by  the Kerala High  Court  in  Thomman\tcase
\n(supra)\t and this case to be a tax on passengers and  goods.
\nThis  Court  in M\/s Sainik Motors, Jodhpur & Others  v’\t The
\nState  of  Rajasthan  [1962]  1\t S.C.R.\t 517  construed\t the
\nRajasthan  Passengers and Goods Taxation Act, 1959 and\theld
\nthat the incidence of the tax was upon passengers and  goods
\nand not upon the-income of the operators of stage  carriages
\nthough ‘the measure of the tax is furnished by the amount of
\nfare  and  freight  charged”.\tThe  power  to\tenact\tsuch
\nlegislative  measure is derived from Entry 56 of  the  State
\nList.\tThe  Entry provides “taxes on goods  and  passengers
\ncarried\t by road or on inland waterways”. In  Sainik  Motors
\ncase  (supra)  section 3 provided “there shall\tbe  levied,.
\ncharged and paid to the State Government a tax on all  fares
\nand  freights  in respect of passengers\t carried  and  goods
\ntransported  by\t motor\tvehicles at  such  rates  which\t are
\nthereafter  set\t out”.\t Section 4  in\tSainik\tMotors\tcase
\n(supra)\t provided that the “tax should be collected  by\t the
\nowner of the motor vehicles and paid to the State Government
\nin  the prescribed manner”.  Though there is  no  comparable
\nprovision in the present case of section 4 in Sainik  Motors
\ncase  (supra) as to method of collection of tax the  various
\nprovisions like levy and payment before amendment of section
\n3  and levy and collection after amendment of that  section,
\ncomposition  of\t tax in section 4, submission of  return  in
\nsection 5, procedure where no payment is made in section  7,
\nfares and freights escaping assessment in section 8, penalty
\nfor non-payment of tax in section 9 indicate that the tax is
\non passengers and’ owners of goods and the operators collect
\nthe  tax.  It is obvious that *hen passengers and owners  of
\ngoods  pay  the\t tax the Government requires  an  agency  to
\ncollect\t such  tax because these taxes are  payable  to\t the
\nGovernment.   The  operators of stage carriages\t and  public
\ncarriers  are  agents  of the Government  to  collect  these
\ntaxes.\tThe composition of tax which is allowed to operators
\nalso  shows  that it is a tax on passengers  and  owners  of
\ngoods and the composition is a convenient mode of payment by
\noperators who collect the tax.\n<\/p>\n
The  agitation of the operators for increase of\t fare  which
\nhad  been going on particularly since the year 1966  led  to
\nthe formation of two committees for investigation into\tthat
\nquestion.  One of the committees was with Shri K.  Sankaran,
\na retired Chief Justice of Kerala High Court as Chairman and
\nthe  other committee was with the Minister for\tRevenue\t and
\nLabour as Chairman.  The Government on consideration of\t the
\nrecommendations\t of  these committees revised the  rates  of
\nfare  with effect from 15 October, 1971.  The rate of  fare,
\nwas raised from 3 Ps per kilometer fixed on 1 July, 1963  to
\n3.3 Ps With effect from 15 October, 1971 per kilometer.\t The
\nminimum\t fare which had been fixed on 1 July, 1963 at 20  Ps
\nand  reduced to 10 Ps on 24 April, 1964 was raised to 20  Ps
\nwith  effect  from 15 October, 1971.   The  Government\tcon-
\nsidered revision of fare on account of several factors.
\nThe  operators\tpaid to Government taxes on  passengers\t and
\ngoods  from 1 July, 1963 upto the month of July, 1966.\t The
\noperators  have also been paving to the Government taxes  on
\npassengers and goods
\n330<\/span>
\nfrom  15 October, 1971.\t The entire controversy between\t the
\noperators on the one hand and the State on the other is\t for
\nthe period July, 1966 to 14 October, 1971.\n<\/p>\n
The  heart of the matter is whether tax was included in\t the
\nfare and, therefore, paid by passengers particularly in\t the
\ndisputed period between July, 1966 and October, 1971.  If no
\ntax  has in fact been paid by passengers or owners of  goods
\nthe  retrospective validation by Acts 18 and 34 of  1971  of
\nlevy  and collection of tax and retrospective  inclusion  of
\ntax  within fare could be contended to be unreasonable,\t un-
\nworkable and unconscionable according to the operators.
\nwhen the operators challenged Act 25 of 1963 in Thomman case
\n(supra)\t the  High Court said that the Court was  not  in  a
\nposition to say whether the liability imposed by the Act had
\nor had no been absorbed by the increase of fare with  effect
\nfrom  1 July 1963.  The provision in the Act is\t that  there
\nshall  be  a tax at the rate of 10 np in the rupee  on\tthe
\nfares  and  freights-  payable to  the\toperators  of  stage
\ncarriages  and\tat  the rate of 5 nP in\t the  rupee  on\t the
\nfreights  payable to operators of public  carrier  vehicles.
\nThe  machinery for the collection of the tax is the same  as
\nfor the collection of the fare.\t The provision of tax at the
\nrate  of 10 Ps in the rupee as also 5 Ps in the rupee  shows
\nthat  the  tax\tis payable along with  fares  and  freights.
\nThere  is no difficulty in ascertaining or  quantifying\t the
\ntax  payable because the rates are specified to be  “in\t the
\nrupee”.\t Tax is collected by the operator with the fare from
\nthe  passengers.   To  illustrate if the fare  paid  is\t 110
\npraise\tthe,  tax  levied  is 10  paise.   The\tfare  to  be
\nappropriated by the operators is 100 paise and the tax of 10
\npaise  is  collected  by  the  operator\t and  paid  to\t the
\nGovernment.\n<\/p>\n
The  contemporaneous  evidence on the question\twhether\t the
\nState  Authorities  at the time of fixing the  fare  in\t the
\nmonth  of July, 1963 included the tax imposed under Act,  25
\nof  1963  within the fare fixed is furnished  first  by\t the
\nletter\tof  the\t actor of Transport  dated  2  April,  1963,
\nsecond,\t by  the  representation of the\t operators  dated  3
\nApril,\t1963 and third by the notes of hearing\tprepared  by
\nthe  Secretariat  under the heading  “Motor  Vehicles  Stage
\nCarriages Fare Revision File.\n<\/p>\n
The  Director of Transport in his aforementioned letter\t set
\nout in paragraphs 2,3 and 4 thereof as follows
\n\t      “2. At the existing rate of fares, the earning
\n\t      per  mile\t (E.P.M.), worked out for  the\tyear
\n\t      1962-63 comes to 123 nP.\tThe present proposal
\n\t      to  increase the basic rate as 3 nP  per\thead
\n\t      per kilometer will result in about 20  percent
\n\t      increase\tin  the\t rate of  fares.   From\t the
\n\t      actual  figures  of the  previous\t years,\t the
\n\t      Department could expect only about 8 per\tcent
\n\t      in  the  E.P.M.  from  the  services  it\t the
\n\t      proposed rate- of fares.\tThus 133 nP seems to
\n\t      be  a fail- estimate of the E.P.M.  which\t the
\n\t      department  could expect to get for  the\tyear
\n\t      1963-64 after the fair increase,.\n<\/p>\n
\t      3.    As\tagainst the increased E.P.M. of\t 133
\n\t      nP the expenditure worked out will come to 130
\n\t      nP  per mile, This increased operational\tcost
\n\t      is estimated by the Department taking
\n\t      331<\/span>
\n\t      into account the enhanced rate of vehicle tax,
\n\t      the new imposition of passenger tax under\t the
\n\t      T.P.G. Act and such other duties.\t  Consequent
\n\t      to  the  proposed levy of\t tax  on  passenger,
\n\t      there  will be more than 60 per cent  increase
\n\t      in  the  rate  of\t tax  to  be  paid  by\t the
\n\t      department.  All these factors were taken into
\n\t      consideration  in estimating  the\t operational
\n\t      cost.\n<\/p>\n
\t      4.    No doubt the increased rate of tax,\t the
\n\t      levy  of passenger tax and such  other  duties
\n\t      would reduce the profit-margin and the  return
\n\t      on  capital out lay to a considerable  extent.
\n\t      Despite  the incidence of higher rate of\ttax,
\n\t      levy of passenger tax and other duties, I feel
\n\t      that  the department could still\toperate\t its
\n\t      services\tprofitably  at\tthe  rate  of  fares
\n\t      contained in the draft notification  published
\n\t      by   the\t Government.\tSince\tby   careful
\n\t      operational economics the expenditure per mile
\n\t      could  be reduced, by 2 to 3 nP per  mile\t and
\n\t      the  earnings increased by rationalisation  of
\n\t      services.\t  So further enhancement of fare  is
\n\t      unnecessary.”\n<\/p>\n
These statements in the letter of the Director of  Transport
\nindicate  that the increased operational cost was  estimated
\nand  considered by the Department after taking into  account
\nthe enhanced rate of vehicles tax, the new imposition of the
\npassenger tax and other duties.\n<\/p>\n
The  representation of the operators was in answer to  draft
\ndirections  contained  in notification dated 4\tMarch,\t1963
\ncontaining  proposals to revise the fare rates.\t  The  draft
\nnotification  proposed maximum fare at the rate of  3.75  nP
\nper  head per kilometer for fast passenger services  in\t the
\ncase  of  Ghat\troads and 3nP per head per  kilometre  as  a
\nmaximum\t fare  for ordinary services in the  case  of  other
\nroads.\t The  operators set out the wide  disparity  between
\nincrease  in  operational  cost\t on the\t one  hand  and\t the
\ninadequacy  of\tthe proposed fare rates on the\tother.\t The
\noperators  estimated  their  daily  expenses  under  several
\nheads.\t One  of the heads estimated by\t the  operators\t was
\n“increase in tax at the revised rate, as envisaged by  State
\nbudget”.  That is referable to tax on passengers and  goods.
\nThe operators stated that the maximum fare should be  raised
\nto 3.5 nP per kilometre.  This was after taking into account
\nthe tax element.\n<\/p>\n
The  representation of the operators shows that the  tax  on
\npassengers  and\t goods was one of the elements in  the\tfare
\nstructure.   This becomes apparent in the hearing  notes  of
\nthe Carriage Fare Revision File prepared by the Secretariat.
\nIt was calculated hat the proposal to increase from the then
\nexisting fare of 2.5 nP per kilometre to 3 nP per  kilometre
\nwould  bring an additional income of Rs. 40 per day  for  an
\nordinary  bus of 40 seats operating 200 kilometres per\tday.
\nThe  occupation\t ratio work out between 60 to 80  per  cent.
\nLeaving\t  out  margin  for  occupation\tratio  the   average
\nadditional income worked at Rs. 30 per vehicle of 40  seats.
\nThe existing motor vehicles tax per seat per quarter at\t the
\ntime  of  the fixation of fare was Rs. 37.50  per  seat\t per
\nquarter.  The then proposed enhanced tax on vehicles was ;it
\nRs.  60 per seat per quarter.  The existing  motor  vehicles
\ntax worked at 41.6 nP per day.\tThe enhanced tax worked\t out
\nat 66.6 nP per day.  The increase in motor vehicles tax
\n332<\/span>
\nwould impose an additional tax burden of 25 nP per seat\t per
\nday.  The increase in motor vehicles tax would be at Rs.  10
\nper bus of 40 seats a day.  The additional cost of operation
\non account of increase in cost of fuel, spare parts came  to
\n12 nP per mile or 8 nP per kilometre.  The operational\tcost
\nof  a  bus of 40 seats came to Rs. 16 per  day.\t  The  total
\nadditional  cost per day of 40 seats on account of  vehicles
\ntax  and cost of fuel and spare ports came to Rs.  26.\t The
\nadditional  income as already indicated came to Rs.  30\t per
\nday.   Therefore, the operator was not hit by  the  proposal
\nfor  taxation  which  was  taken  into\tConsideration.\t The
\noperators  and\tthe Chairman of the  State  Transport  Board
\ndemanded  further increase in the rate of fare.\t The  entire
\nevidence at the time of the fixation of fare is ample  proof
\nof  the\t fact that the. incidence of the increase  in  motor
\nvehicles  tax, the increase in tax liability on\t account  of
\ntax  on\t passengers  and  goods,  and  additional  cost\t  of
\noperation  on account of increase in cost of fuel and  spare
\nparts  were all taken into consideration in fixing the\tfare
\nwith effect from 1 July, 1963.\n<\/p>\n
Counsel on behalf of the operators contended that Act 34  of
\n1971  imposed  a  new levy for these  reasons.\t Fares\twere
\nformerly  exclusive of tax.  As a result of Act 34 of  1971,
\nfares were made inclusive of tax.  The character of the fare
\nwas  altered  by  retrospective\t piece\tof  legislation.   A
\ndeeming\t  provision  subjected\tthe  amount   collected\t  by
\noperators  as  fare  to a deduction of\ttax.   Reliance\t was
\nplaced\ton  the decision of this Court in Rai  Ramkrishna  &
\nOthers v. The State of Bihar,<\/a> [1964] 1 SCR 897 in support of
\nthe contention that the character of the tax was, altered by
\nits retrospective operation.\n<\/p>\n
In  Rai Ramkrishna case (supra) the Bihar Finance  Act\t1950
\nlevied\ttax on passengers and goods carried by public  motor
\nservice\t in Bihar.  The owners of motor vehicles  challenged
\nthe  validity of the Act.  The Act was struck down  by\tthis
\nCourt.\t The  State  thereafter issued\tan  Ordinance.\t The
\nprovisions  of\tthe Act which had been struck down  by\tthis
\nCourt were validated and brought into force  retrospectively
\nby  the\t Ordinance from the date when the  earlier  Act\t had
\npurported  to  come  into  force.   The\t provisions  of\t the
\nOrdinance   were  thereafter  incorporated  in\t the   Bihar
\nTaxation-on Passengers and Goods Act, 1961.  The validity of
\nthe  Act  of 1961 was challenged.  The\towners\tof  vehicles
\ncontended  there  that\tretrospective  operation  completely
\naltered\t  the\tcharacter  of  the  tax\t  proposed   to\t  be
\nretrospectively recovered.\n<\/p>\n
The  contentions  in Rai Ramkrishna case (supra)  were\ttwo-
\nfold.\t First,\t retrospective\trecoveries  did\t  not\thave
\nlegislative  competence.   Second,  the\t owners\t could\t not
\nrecover tax from passengers carried by them between 1 April,
\n1950  and the date’ of the retrospective validation  of\t the
\nAct in 1961.  Therefore, the tax was unreasonable.  It\tmay
\nbe stated here that future recoveries were not challenged in
\nthat  case.  As a matter, of fact, the right to make  future
\nrecoveries   was  conceded.   In  the  present\t case,\t the
\nprospective future recoveries are also not challenged.\t The
\nchallenge is confined to retrospective validation only,
\nThis Court said in that case “If the scheme of section 3 for
\nthe levy and recovery of the tax is valid under entry 56  of
\nlist II so far as future recoveries are concerned, it is not
\neasy to see how it can be said that the character of the tax
\nis radically changed in the present circumstances,
\n333<\/span>
\nbecause\t it would be very difficult, if not impossible,\t for
\nthe  owners to recover the tax from the passengers  whom  he
\nhas carried in the past.  The tax recovered  retrospectively
\nlike  the  one which will be recovered\tprospectively  still
\ncontinues to be a tax on passengers and it, adopts the\tsame
\nmachinery for the recovery of the tax both as to the past as
\nwell as to the future”.\n<\/p>\n
The decision in Rai Ramkrishna case (supra) does not support
\nthe contention of the operators.  The decision on the  other
\nhand  shows  that tax recovered retrospectively as  well  as
\nrecovered prospectively is the same tax.  The character\t of
\nthe  tax is not altered.  The position is identical  in\t the
\npresent case.\n<\/p>\n
The  contention\t of the operators is  fallacious  for  these
\nreasons.   No  tax is imposed or collected under Act  34  of
\n1971.  The tax is imposed by Act 25 of 1963.  The  character
\nas  well as incidence of the tax is determined by Act 25  of
\n1963.\tThe  machinery for collection of the tax  which\t was
\nimplicit  in Act 25 of 1963 was made explicit by Act  18  of
\n1971.\tThe State Government under chapter IV of  the  Motor
\nVehicles   Act,\t 1939  having  regard  to  various   factors
\nmentioned in section 43(1) of the 1939 Act issues directions
\nto  the State Transport Authority relating to the fixing  of
\nfares  and  freights including the maximum  and\t minimum  in
\nrespect thereof for stage carriages, contract carriages\t and
\npublic carriers.  The provisions of Act 34 of 1971 are\tthat
\nwhile-\tfixing\tthe  fares, the\t Government  may  take\tinto
\naccount the tax, if any, imposed on the passengers and\tthat
\nsuch fares may be inclusive of the tax payable consignors of
\ngoods  to the operators under any matter.  Under section  44
\nof the 1939 Act, the  by the passengers or law dealing\twith
\nthe  State  Transport  Authority shall give  effect  to\t the
\ndirections  issued by the State Government under section  43
\nof  the\t Act.\tFare  could be\tfixed  either  exclusive  or
\ninclusive of tax.  The State Government fixed the fare on  1
\nJuly,  1963 after taking into account the element of tax  on
\npassengers  and\t goods\timposed\t by Act\t 25  of\t 1963.\t The
\noperators  in  collecting  fare\t from  passengers  in\tfact
\ncollected  the tax due from passengers under Act 25 of\t1963
\nalong  with the fare.  Section 43(1A) of the Motor  Vehicles
\nAct,  1939  was, therefore,  introduced\t with  retrospective
\neffect\tto  clarify the factual basis.\t There\twas  neither
\nimposition  of any new tax by Act 34 of 1971 nor  was  there
\nany alteration of the character of the tax which had already
\nbeen imposed.  In the present case, the principle Act 25  of
\n1963  levied the tax.. Acts 18 and ’34 of 1971 were for\t the
\npurpose\t of dispelling the doubts expressed in Thomman\tcase
\n(supra).\n<\/p>\n
In  the\t recent\t decision in S. Srikantiah  &  Ors.  v;\t The
\nRegional Transport AuthoritY.  Anantapur & Ors. [1971] Suppl
\nS.C.R.\t 816  this  Court  considered  the  validity  of   a
\nnotification  under  section 43 of the Motor  vehicles\tAct,
\n1939.\tThe  Madras  Vehicles (Taxation\t of  Passengers\t and
\nGoods)\tAct, 1952 became applicable to Andhra  Pradesh.\t  In
\n1959  the  Andhra  Pradesh  legislature\t enacted  the  Motor
\nVehicles  (Taxation of Passengers and Goods) Andhra  Pradesh
\n(Amendment) Act.  By that amendment, the rates were  increa-
\nsed.  The state Authority was directed by the Government  to
\nfix
\n334<\/span>
\nmaximum\t fares inclusive of the leviable tax under  the\t Act
\nfor  the stage carriages.  The Andhra Pradesh Amendment\t Act
\nwas  challenged.  The Andhra Pradesh High Court struck\tdown
\nthe  Act  as unconstitutional.\tThe  Legislature  thereafter
\npassed\ta  validating  Act in  1961.   The  operators  again
\nquestioned the Amendment Act on the ground that they had not
\ncollected  the\tfare  on  the enhanced\trate  fixed  by\t the
\nTransport  Authority.  The contention in that case was\tthat
\nthe enhanced surcharge which became operative on coming into
\nforce  of 1961 Act could not be sustained  without  amending
\nthe conditions of the permit dealing with the fares leviable
\nby  the\t operators.  This Court held that  the\tnotification
\nunder  the  Motor  Vehicles Act in that\t case  issued  under
\nsection\t 43 of the Act fixing the maximum fare inclusive  of
\nthe tax has the effect of incorporating the maximum fare  as
\nnotified  including the tax leviable as a condition  of\t the
\npermit.\t  Therefore, it is competent to the  Legislature  to
\namend  the  Motor Vehicles Act by enacting  that  directions
\nregarding fares can be inclusive of tax.\n<\/p>\n
The  arguments advanced on behalf of the operators  fail  in
\nview  of the cardinal fact that tax was an element  included
\nin the fare structure.\t The retrospective validation cannot
\nbe  said  to be unjust because the operators  collected\t the
\nentire\tamount.\t The tax has always been paid by  passengers
\nand  owners of goods.  The tax is not on the income  of\t the
\noperators.   There  was\t and is no  lack  of  machinery\t for
\ncollection of taxes.  The operators collected tax as Well as
\nfare.\tThe directions regarding fare were validated by\t Act
\n34 of 1971 by reason of the litigation between the operators
\nand the State.\n<\/p>\n
For  these reasons, the contentions of the  operators  fail.
\nThe  petitions,and appeals are dismissed.  The\tdecision  of
\nthe  Kerala High Court in Civil appeal No. 1875 of 1972\t and
\nother appeals is upheld.  In view of the fact that the\tHigh
\nCourt  directed the parties to bear their respective  costs,
\nparties will bear their own costs in these matters.
\nV.P.S.\t\t    Petitions and appeals dismissed.\n<\/p>\n
33 5<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India A. S. Karthikeyan Etc vs State Of Kerala & Anr on 20 November, 1973 Equivalent citations: 1974 AIR 436, 1974 SCR (2) 321 Author: A Ray Bench: Ray, A.N. (Cj), Mathew, Kuttyil Kurien, Chandrachud, Y.V., Alagiriswami, A., Bhagwati, P.N. PETITIONER: A. S. KARTHIKEYAN ETC. Vs. RESPONDENT: STATE OF KERALA & ANR. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-24829","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nA. S. 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