LexM/S. SAINIK MOTORS, JODHPUR AND OTHERS versus THE STATE OF RAJASTHAN
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' 1 S.C.R. SUPREME COURT REPORTS 517 Clauses Act. But there is sufficient indication in s. 138 itself that the amounts recovered as surcharge were to form part of the Revenues of the Federation and such Revenues were to be expended for the purposes there indicated. Under s. 124(4) of the Government of India Act, 1935, where powers and duties are con- ferred by s. 124 upon a Province or a Federated State there shall be paid by the Federation to the Province or the Federated State such sum as may be agreed ........................... Hence by the definitions given in the General Clauses Act no different concept of the words "purposes of the Central Government" was intended from what was intended by the use of the words "Federal purposes" in s. 138(1 )(b) of the Govern- ment of India Act, 1935. These petitions therefore fail and are dismissed with costs. One hearing fee. Petitions dismissed. z96 r A bdullabhai M. Bhagat v. The Tncome-tax Officer, Special Circle, Madras Kapur J, M/s. SAINIK MOTORS, JODHPUR AND OTHERS z96z v. THE STATE OF RAJASTHAN (S. K. DAS, J. L. KAPUR, M. HIDAYA'fULLAH, J. c. SHAH and T. L. VENKATARAMA AIYAR, JJ.) Tax-Levied on passengers and goods carried by road in motor vehicles-Lump sum in lieu of tax optionally payable under the Act but mandatory undu the Rules,and notification-The word "shall", if mandatory or directory-Discrimination, if any between.operators using roads-Rajasthan Passengers and Goods Taxation Act, r959 (I8 of r959), ss. 3, 4-Rajasthan Passengers and Goods Taxation Rules, r959, rr. 8, 8-A, Notification issued under r. 8-Constitution of India, Sch. VJ[, State List, Entry 56. The petitioners who were partners of a registered firm hold- ing public carrier and stage carriage permits challenged the constitutionality of certain provisions of the Rajasthan Passen- gers and Goods Taxation Act, 1959. the Rajasthan Passengers and Goods Taxation Rules, 1959. and a notification issued under r. 8. The Act was passed for levying a tax on passenghs and goods lt1ar(;h 22. 518 SUPREME COURT REPORTS [1962] z96z carried by road in motor vehicles the power to enact being derived from Entry 56 of the State List in Sch. VII of the Cons- Sainih Motors, titution. Section 3(4) of the Act prescribed the method of ]odhpur & Others collection of the tax and provided that the State Government v. . "may accept a lump sum in lieu of the tax chargeable". Rule 8(1) The State of prescribed the method of payment and provided that the tax Rajasthan "shall be paid in lump sum" and the notification in question prescribed the rates of the tax. Held, that the incidence of the tax was upon "passengers and goods" and not upon income of the petitioners though the amount of the tax was measured by the fares and freights. The charging section, namely, s. 3 did not go outside Entry 56. Mathurai v. State of Madras, I.L.R. (1954) Mad. 867, Atma Ram Budhia v. State of Bihar, (1952) I.L.R. 31 Pat. 493, referred to. The tax did not offend Arts. 301 and 304 of the Constitution and no inter-State trade, commerce or intercourse was affected by it. Although the tax fell upon passengers and goods pro- ceeding to or from an extra-State point, it was limited only to the fare and freight proportionate to the route within the State. The word "shall" is ordinarily mandatory but it is some- times interpreted as directory, and in the present case the word "shall" used in rr. 8 and SA and the notification should be interpreted as directory as s. 14 of the Act from which the Rules and the notification derive their authority, creates an option by using the words "may accept". The Act, the Rules and the notification must be read harmoniously. The mandatory language was used to fix peremptorily the amount of the lump sum if paid in lieu of the tax. In Re Lord Thurlow Ex Parte Official Receiver, (1895) 1 Q.B. 724, Mannikam Patter v. Nanchappa Chettiar, (1928) M.W.N. 441, In re Rustom, [1901] I.LR. 26 Born. 369, ]etliaji Peraji Firm v. Krishnayya, (1929) I.L.R. 52 Mad. 648 and Burjore and Bhavani Pershad v. Mussumat Bhagana, (1883) L.R. II I.A. 7, followed. The lump sum figure was based on averages and could not be impeached by reference to a possibility that on some days no business might be done. Comparison with Railways· which is a union subject \Vas not admissitile. There was no discri1nination between operators of public motor vehicles using roads all
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