A.Venkatakrishnan vs State Of T.Nadu & Ors

State of Tamil Nadu and Ors. ....Respondents

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the judgment of a Division Bench of the

Madras High Court dismissing several Writ Petitions and Writ Appeals

including Writ Petition Nos.18618/2003 to 18621/2003.

3. The short question which arises for determination in this Civil Appeal

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.

4. 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.

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5. 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 appellant based on some statistical data as to

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.

6. In the present case we find that the initial burden on the appellant

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

appellant 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.

7. 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

3 the judgment in the case of Jindal Stainless Ltd. (2) and Another vs. State of

Haryana and Others [(2006) 7 SCC 241].

8. In our view, this repeated increase in the rate of tax, particularly the

incidence of which is more on the contract carriage vis-`-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.

9. Keeping in mind the gamut of the dispute involved, we are of the

view that the impugned judgment of the High Court cannot be interfered

with, particularly when the pleadings at the initial stage were insufficient.

10. Realizing this difficulty, learned counsel appearing on behalf of the

appellant fairly stated that he would seek permission of this Court to

withdraw the Civil Appeal 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

4 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).

11. In the circumstances we permit the appellant herein to withdraw the

Civil Appeal 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 Appeal stands 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 appellant. All

contentions of both sides are expressly kept open.

12. 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).

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13. Subject to the above, the Civil Appeal is dismissed with no orders as

to costs.

..........................................J. (Dr. ARIJIT PASAYAT)

..........................................J. (Dr. MUKUNDAKAM SHARMA)

New Delhi, February 19, 2009

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