STATE OF GUJARAT AND ORS. versus AKHIL GUJARAT PRAVASI V.S. MAHAMANDAL AND ORS.

Citation: [2004] 3 S.C.R. 956 · Decided: 08-04-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
STATE OF GUJARAT AND ORS. 
v. 
AKHIL GUJARAT PRAVASI V.S. MAHAMANDAL AND ORS. 
APRIL 8, 2004 
[S. RAJENDRA BABU AND G.P. MATHUR, JJ.) 
Bombay Motor Vehicles Tax Act, 1958-Section 3A(J) and (2): 
Gujarat Act No.9 of 2002: 
Bombay Motor Vehicles Tax Rules, 1959-Rule 5: 
Constitution of India, I950--Articles 14, 19(/)(g), 21, 300A and Seventh 
Schedule list II, Entries 56 and 57: 
D 
Levy of advance tax-On Designated omnibuses used or kept for use in 
the State-Provision for refund of the tax if the vehicle not used or kept for 
use for a continuous period of not less than one month-Provisions of Act and 
Rules challenged-Struck down by High Court being discriminatory and being 
beyond legislative competence as Entries 56 and 57 do not authorize levy of 
E advance tax-On appeal, held: The tax imposed is not discriminatory-If the 
vehicle is "used" or is "kept for use" in the State, it becomes liable for 
payment of tax and the actual use and quantum of use is immaterial-The 
legislature had legislative competence to enact the provision as the language 
used in the Section is in conformity with Entry 57. 
p 
Interpretation of the Constitution: 
Interpretation of Entries of Schedule VII-Criteria for-Held: Entries 
should be given a broad and comprehensive interpretation-Jn order to 
ascertain legislative competence, Court must consider what constitutes in pith 
and substance the true subject matter of the legislation and whether the subject 
G matter is covered by the topics enumerated in the Legislative list-Doctrine 
of Pith and Substance. 
Words and Phrases: 
"'Tax "-Meaning of 
H 
956 
STATE 1·. AKHILGUJARATPRAVASI VS. MAHAMANDAL 
957 
Respondents-Bus operators filed Writ Petition in High Court A 
challenging Section 3A (1) and (2) of Bombay Motor Vehicles Tax Act, 
1958 and Rule 5 of Bombay Motor Vehicles Tax Rules, 1959, on the ground 
that the same were violative of Articles 14, 19(l)(g), 21 and 300A of the 
Constitution of India because the contract carriages which are designated 
as omnibuses and luxury or tourists designated omnibuses had been B 
subjected to heavy tax while all other vehicles were taxed under Section 
3 of the Act whereunder the quantum of tax was much lower. Thus the 
tax imposed upon them was without any reasonable classification and 
hence the provision was arbitrary and discriminatory; that if the vehicle 
is "not used" or "kept for use" or "passengers are not carried to the full 
capacity" no tax could be levied; that Section 3A had been enacted without C 
any legislative competence as the Act had been made with reference to 
Entries 56 and 57 of List II of VII Schedule of the Constitution; that 
provision was bad in as much as the amount of annual rate of tax was 
fixed and not as per the capacity of the vehicle or the distance actually 
covered or number of days of actual use; that the provision for depositing 
tax in advance and thereafter claiming refund was wholly illusory and in D 
fact the authorities had not made any such refund despite the application 
in that regard being made. 
High Court allowed the petitions striking down Section 3A (1) and 
(2) and Rule 5 holding that the tax was a composite tax and not on E 
passengers alone; that demand of advance tax on passengers for one month 
was beyond the legislative competence as Entries 56 and 57 of List II of 
VII Schedule of the Constitution do not authorize levy of advance tax; 
that demand of advance tax on vehicles which were not put on road or 
which were kept away from use was also beyond the legislative competence 
and the provision for payment of advance tax and Rule 5 were without F 
any authority of law; that mere fact that there was a provision for refund 
of the advance tax paid, could not save the enactment as the levy of 
advance tax itself was without any authority of law. The Court issued 
Writ of Mandamus to the State Authority not to recover any tax from 
the vehicles of the respondents and further directed the State to grant G 
refund of the tax already recovered from the respondents. Hence the 
present appeal. After decision of the High Court the Act was amended 
by Gujarat Act No.9 of 2002 in order to validate the imposition and 
collection of tax on designated omnibuses. Writ petition was filed in this 
Court challenging the amendments. 
H 
958 
SUPREME COURT REPORTS 
[2004] 3 S.C.R. 
A 
Respondents-operators of the vehicles contended that the tax was 
essentially a tax on passengers since rate of tax

Excerpt shown. Read the full judgment & AI analysis in Lexace.