M/S. SHARMA TRANSPORT REP. BY SHRI D.P. SHARMA versus GOVERNMENT OF A.P. AND ORS.

Citation: [2001] SUPP. 5 S.C.R. 390 · Decided: 03-12-2001 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Dismissed

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Judgment (excerpt)

A 
MIS. SHARMA TRANSPORT REP. BY SHRI D.P. SHARMA 
v. 
GOVERNMENT OF A.P. AND ORS. 
DECEMBER 3, 2001 
B 
(B.N. KIRPAL, K.G. BALAKRISHNAN AND ARIJIT PASAYAT, JJ.] 
Motor Vehicles (All India Permit for Tourists and Transport Opera-
rors) Rules, 1993/Central Motor Vehicle Rules, 1989-Rule 1(4)/Rule 84-
Tax-Levy o,f-On tourist but operators-By State Govern1nent-Concession 
C 
in the tax granted pursuant to a letter by Union Government-Withdrawal of 
the concession by State-Withdrawal challenged-Plea that concession 
could not be withdrawn since in view (If Rule 1(4) State could not levy tax in 
temis (If Rules 84-Held, concession rightly withdrawn since tax was levied 
under 1963 Act and not under 1989 Rules-The power to levy or to reduce 
D 
E 
F 
or to exen1pt tax or to lvithdratvn concession granted does not have its source 
in Rule 84-Andhra Pradesh Motor Vehicles T<vcation Act, 1963-Sections 
9(J)(a) and (b) and 3. 
Constitution of India, 1950: 
Article 14-Levy of tax on tourist bus operators-Concession in tax 
granted-Withdrawal (If the concession by delegated legislation-Whether 
withdrawa! arbitrary and discriminator;~Held, no-Since the test of arbi-
trary action applicable to executive action do not necessarily apply to del-
egated legislation-Atbninistrative /ai,v-Delegated legisl~ltion. 
Article 254, Seventh Schedule list II Entry 57 and list lJJ, Entry 35-
Levy of tax by State on tourist buses-Legislative competence (If-Held, power 
to levy taxes on vehicles whether mechanically propelled or not vests solely 
on the State Legislature, though it is open to Parliament to lay down the 
principles on which taxes may be levied. 
G 
Articles 256 and 257-Concession in levy of tax granted by State 
Government pursuant to a letter by Union Governnzent-Subsequent with-
drawal (If the concession-Whether violative qf-Held no, since the letter (If 
Union Governnzent cannot be regarded as laying down the principles of taxes 
on vehicles. 
H 
Article 301-Frecdonz (~f trade, corn111erce and intercourse-bnposition 
390 
SHARMA TRANSPORT v. GOVT. OF A.P. 
391 
of tax-Held, does not tantamount to infringement in every case-It has to be 
A 
determined whether the impugned provision amounts to a restriction directly 
and immediately on the movement of trade and commerce-Andhra Pradesh 
Motor Vehicles Taxation Act, 1963-Section 9(1 )(a) and (b). 
Administrative Law : 
Promissory Estoppel-Held, cannot be used compelling Government or 
public authority to carry out a representation or promise which is prohibited 
by law or which was devoid of the authority or power of the office of the 
Government or the publiraulhority-.Jt being an equitable doctrine, must 
yield where equity requires-Doclrines-Doctrine of Promissory Estoppel. 
Evidence Act, 1872-Section 115. 
Estoppel-Applicability of-There cannot be an estoppel against any 
statute. 
Words and Phrases: 
'Agreemen/-Meaning qf in 1he context of Ariicle 73(b) of lhe Comti-
rution qf India, 1950. 
B 
c 
D 
'For that purpose'-Meaning qf in the context qf Article 256 of ihe 
Constitution qf India, 1950. 
E 
'Arbitrary'-Meaning of 
State of Andhra Pradesh levied tax nnder Section 3 of Andhra 
Pradesh Motor Vehicles Taxation Act, 1963. The State thereafter issued a 
Notification dated 1.7.1995 extending concessional tax on tourist vehicles 
pursuant to a letter dated 30.8.1993 from Joint Secretary to Central Gov· 
ernment By another notification dated 5.6.2000 the State cancelled the 
notification dated 1.7.1995. 
F 
Appellants-tourist bus operators, filed Writ Petition before High 
G 
Court challenging the legality of the notification dated 5.6.2000. The 
same was dismissed. 
In Appeal to this Court appellants contended that since the Notifi-
cation dated 1.7.1995 was issued pursuant to a directive of the Central 
Government, its withdrawal was unconstitutional; and that since Rule 
H 
A 
B 
392 
SUPREME COURT REPORTS 
[2001] SUPP. 5 S.C.R. 
1(4) of Motor Vehicles (All India Permit for Tourist and Transport 
Operators), Rules, 1993 was intended to curtail the power of State to levy 
taxes in respect of vehicles, hence the tax permitted in terms of Rule 84 of 
Central Motor Vehicles Rules, 1989 could not he levied; and that in view 
of Articles 73, 256 and 257 of the Constitution of India, directives of the 
Central Government were binding and withdrawal of the notification 
dated 1.7.1995 was illegal; and that impugned notificationwas beyond the 
legislative power which the State derive

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