J. SRINIVASA RAO versus GOVT. OF A.P. AND ANR.

Citation: [2006] SUPP. 9 S.C.R. 534 · Decided: 24-11-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
J. SRINIV ASA RAO 
v. 
GOVT. OF A.P. AND ANR. 
NOVEMBER 24, 2006 
(S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
Andhra Pradesh Motor Vehicles Taxation Act, 1963; Section 3 and 
Notification dated 27.4. 1993 issued thereunder: 
Levy of tax on Motor vehicles/Maxi Cab-Enhancement of rate oftax-
Amendment in the provision by issuing a Notification-Challenge to-
Dismissed by High Court-On appeal, Held: Since the Act provides for 
compensat01y nature of tax, it must be construed having regard to the 
purport and object for its levying-Proviso to Section 3 of the Act provides 
D for statutory injunction limiting power ofi the State to enhance rate of tax-
Jt could be given an appropriate meaning to prevent clear intention of the 
legislature from being defeated-Jn case of doubt, construction has to be 
given in favour of tax payer and against the Revenue-Courts shall make an 
endeavour to give effect to the golden rule of interpretation and would not 
supply casus omissus-Notification in question seeks to change the basis of 
E mode of taxation, hence, illegal and cannot be sustained-Interpretation of 
statutes-Golden Rule. 
Doctrines: 
F 
Doctrine of'noscitur a sociis' and 'ejusdem generis'-Applicability of 
State of Andhra Pradesh enacted the Andhra Pradesh Motor Vehicles 
Taxation Act, 1963 to consolidate and amend the law relating to levy ofa tax 
on motor vehicles in the State. In the Schedule appended to the Act, the rate 
of tax for Maxi Cab permitted to carry more than six passengers but not more 
than twelve passengers was prescribed at Rs. 1,000/-. By reason of an 
G amendment as contained in the Notification dated 27.04.1997, the rate of tax 
was modified. Questioning the purported Notification, a writ petition was filed 
by the appellant which was dismissed by the High Court holding that having .. 
regard to the fact that in all other entries of the Schedule, tax was levied on 
seat basis, harmonious reading of the provisions thereof would lead to the 
-H 
534 
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J. SRINIVASA RAOv. GOVT. OF A.P. 
535 
conclusion that rate of tax prescribed in the Schedule of Act is valid in law. A 
Hence the present appeal. 
Appellant contended that the High Court committed a manifest error in 
passing the impugned order insofar as it failed to take into consideration that 
in case of a doubt as regards construction of a taxing statute it should be 
construed in favour of the taxpayer and not the Revenue; and that even B 
assuming that there was some casus omissus, the same could not have been 
supplied by the Court. 
The respondents submitted that in construing a taxing statute, addition 
of any word is not impermissible; and that rule of strict construction applies C 
only to the charging section and 1wt ~.J the machinery provisions of the Act. 
Allowing the appeal, the Court 
HELD: 1.1. Andhra Pradesh Motor Vehicles Valuation Act enacted by 
the State provides for a compensatory nature of tax. A statute involving D 
compensatory tax in a given case must be construed having regard to the 
purport and object for which it was levied. [539-BJ 
Hardev Motor Transport v. State of M.P. & Ors., JT (2006) 9 SC 454, 
relied on. 
1.2. Section 3 of the Act provides for a charging section stating that E 
the tax shall be levied on every motor vehicle used or kept for use in the State 
at the rates specified in the First Schedule. The levy of tax, therefore, is on 
the motor vehicles. Its rates may vary having regard to the use or category of 
the·vehicle. [539-C) 
1.3. Maxi Cabs although come within the purview of the definition of 
"contract carriage", but the rate cf tax therefor has differently been provided 
for in the statute itself. Proviso appended to Section 3 of the Act provides for 
a statutory injunction limiting the power of the State to enhance the rate of 
tax. [539-D[ 
V. V.S. Sugars v. Govt. of A.P. and Ors., [1999J 4 SCC 192, relied on. 
Cape Brandy Syndicate v. Jnland Revenue Commissioner, (1921) l K.B. 
64, ref erred to. 
F 
G 
2.1. When the rate of tax is provided under a statute, construction H 
536 
SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R. 
A thereof applying the principles of noscitur a sociis and ejusdem generis would 
not apply. The rate of tax was fixed at Rs. 1,000/-. That was a tax on the specified 
motor vehicle. The tax was not to be calculated on passenger basis. It may be 
that the provisions preceding thereto impose a tax on passenger. But, they 
were in relation to motor vehicles which are used for

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