STATE OF MAHARASHTRA & ORS. ETC. versus MADHUKAR BALKRISHNA BADIYA & ORS. ETC.

Citation: [1988] SUPP. 2 S.C.R. 482 · Decided: 17-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Disposed off

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Judgment (excerpt)

A 
STATE OF MAHARASHTRA & ORS. ETC. 
v. 
MADHUKAR BALKRISHNA BADIYA & ORS. ETC. 
AUGUST 17, 1988 
[SABYASACHI MUKHARJI AND L.M. SHARMA, JJ.] 
Bombay Motor Vehicles Tax Act, 1958 (as amended by 
Maharashtra Act XIV of 1987, Maharashtra Act XXXIII of 1987 and 
Mahqrashtra Act IX of 1988)-Challenging validity of amended provi-
sions of-Whether levy of one-time tax on motor cycles or tricycles in 
C the State was beyond the legislative competence of State Legislature and 
beyond Entry 57 of List II of Seventh Schedule. 
These Civil appeals and special leave petitions centred round one 
point, namely, the validity of the Bombay Motor Vehicles Tax Act, 1958 
as amended by Section 3 of the Maharashtra Act XIV of 1987 and 
'll> 
Section 6 of the said Act as amended by Maharashtra Act XXXIII of 
1987 and the Maharashtra Act IX of 1988. 
Section 3 of the said Act XIV of 1987 added sub-section (IC) to 
provide for the levy of one-time tax at 15 times the annual rate on all 
motor cycl~S in ·the State. The safd provlSions further provided that in 
1£ 
the case of motor cycles owned by a company or other commercial 
organisation, the one-time tax was to be levied at thrice the rate. 
Section 6 of the said Act XIV of 1987 added sub-section (6) to 
section 9, enabling a registered owner of a motor cycle or ·tricycle to 
obt.ain refund of "one-iime tax" under certain conditions. 
Petitions were filed in the High Court by the respondents in the 
appeals and petitioners in the special leave petitions, challenging the 
amended provisions of the principal Act. The High Court held that (i) 
the levy of the one-time tax was beyond the legislative competence of the 
State Legislature and also beyond Entry 57 of List II of the Seventh 
G Schedule, and (ii) the provision for imposition of levy at thrice the rates 
on the vehicles owned by a firm or company, were neither discrimina· 
tory nor arbitrary. The High Court struck down Act XIV of 1987. The 
appeals by leave were filed by the State and the special leave petitions 
were filed by the petitioners in this Court against the decision of the 
• 
·. 
• 
High Court. In the meanwhile, the Maharashtra Legislature enacted 
f
H 
Maharashtra Act XXXIII of 1987, which deleted Section 3(4) of the 
482 
) 
' 
STATE OF MAHARASHTRA v. M.B. BADIYA 
483 
principal Act as '.91'ended by the Maharashtra Act XIV of 1987, 
whereby the exi§_tiilg provisions of refund for temporary non-user were 
made inapplicable in cases of motor cycles and tricycles, restricting the 
right of refund to Section 9(6) in the contingencies mentioned.therein. It 
also introduced sub-section (7) to section 9 conferring the right of re-
fund in respect of motor cycles and tricycles in accordance with the 
rates specified in the Fifth Schedule. But the said schedule did not 
prescribe a sepa~ate rate of refund for the company-owned vehicles. 
Therefore, the refund in respect of the company-owned vehicles was the 
same as that payable to individual-owned vehicles even though the tax 
paid on former class of vehicles was three times. Soon thereafter, the 
Maharashtra Legislature enacted Act IX of 1988, whereby the only 
relevant change for the present purpose was that the rate of refund was 
enhanced to three times-in respect of the company-owned vehicles. 
/ 
Before this Court, the appellant-State submitted that the amend-
ments enacted by the Maharashtra Acts XXXIII of 1987 and IX of 1988 
had brought the principal Act as amended by the Maharashtra Act XIV 
A 
B 
c 
of 1987 within the constitntional requirements of making 'one-time tax' 
D 
a regulatory and compensatciry tax and that it . was not necessary to 
decide if the Act as it stood when it was challenged before the High 
Court, ,.,,s beyond the legislative competence of the State Legislature. 
The respondents in the appeals and the petition"ers in the special 
leave peUtions urged that as even after the amendment no refund was 
E 
available in respect of a vehicle which had been registered for more than 
13 years, the effect of that was that no refund at all was available in 
respect. of the tax paid for a vehicle for the 14th and 15th years. The 
impugned levy of tax ceased to be compensatory or regulatory and was 
void under Entry 57 of List II and was violative of Article 301 of the 
Constitution. 
F 
Disposing of the appeals and dismissing the special leave petitions. 
the Court, 
HELD: The tax imposed on the motor vehicles or a class of motor 
~ycles would not be valid

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