THE STATE OF HIMACHAL PRADESH AND ORS. versus YASH PAL GARG (DEAD) BY LRS. AND ORS.

Citation: [2003] 3 S.C.R. 1056 · Decided: 30-04-2003 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
THE STATE OF HIMACHAL PRADESH AND ORS. 
v. 
YASH PAL GARG (DEAD) BY LRS. AND ORS. 
APRIL 30, 2003 
[M.B. SHAH AND ARUN KUMAR, JJ.) 
Himachal Pradesh Taxation (On Certain Goods carried by Road) Act, 
1976-Himachal Pradesh Taxation (On Certain Goods carried by Road) Act, 
C 1991-Road Tax-Levy of-High Court holding 1976 Act enacted to levy tax 
on certain goods carried by road within the State unconstitutional and invalid 
being restriction within the meaning of Article 30 I and also for want of 
Presidential assent-Enactment of 1991 Act-Object of levy of road tax to 
raise revenue for construction, maintenance and development of roads and · 
bridges-High Court holding 1991 Act ultra vires the Constitution and void 
D ab initio-Validity of-Held: Tax levied under 1991 Act is compensatory in 
nature for giving better facilities to the passengers and traders, thus, would 
not come within the purview of restrictions contemplated under Article 301 as 
such there is no requirement of obtaining previous sanction of President-
Hence 1991 Act not ultra vires the Constitution-The 1976 Act does not 
E survive since it is repealed-Constitution of India, 1950-Artic/e 301, 304{b) 
and Schedule Vil list II, Entry 56. 
Constitution of India, 1950-Artic/e 245-State legislature-Levy oftax-
Power of-1991 Act levying road tax for construction, maintenance and 
development of roads and bridges-It cannot be said that the Legislature 
F overruling the decision of High Court invalidating 1976 Act-Hence 1991 Act 
within the legisiative competence of State-Himachal Pradesh Taxation (On 
Certain Goods carried by Road) Act, 1991-Himachal Pradesh Taxation (On 
Certain Goods carried by Road) Act, 1976. 
Himachal Pradesh Taxation (On Certain Goods carried by Road) Act, 
G 1976 was enacted to levy tax on certain goods which are carried by road 
within the State. High Court held the provisions of the Act unconstitutional 
and invalid being restrictions within the meaning of Article 30 I of the 
Constitution and also for want of presidential assent. Subsequently, State 
enacted Himachal Pradesh Taxation (On Certain Goods carried by Road) 
H 
Act, 1991 for levy of tax. The object of the levy was to raise revenue for 
1056 
, 
STA TE r. Y.I'. l•ARG 
1057 
construction, maintenance and development of roads a·nd bridges. A 
Respondent filed writ petition challenging the Act. High Court held that 
the tax levied under the 1991 Act was not compensatory in nature as State 
Government sought to recover only part of expenditure incurred in 
construction and maintenance of road and bridges; and that the State 
Legislature was not competent to enact a law so as to overrule the decision 
rendered by the Higl1 Court, thus the 1991 Act is ultra vires the Constitution B 
and void ab initio. Hence the present appeals. 
Appellant-State contended that the High Court erred in holding that 
the State has failed to prove that the impugned road tax was not regulatory 
or compensatory in nature; that the State of Himachal Pradesh is entirely C 
hilly State and the cost of construction of roads and bridges is many times 
high as compared to other places; and that roads are the only mode of 
transport, therefore, in order to provide roads, bridges and repair, the State 
Legislature had levied the tax to mobilize additional sources for 
developmental purposes in exercise of its power under Entry 56 of List II 
of Seventh Schedule to the Constitution. 
D 
Respondents conte.nded that in the writ petition challenging the 
validity of 1976 Act, State failed to contend and prove that the !evy of tax 
was compensatory or regulatory; and that as the assent of the President 
was not obtained under Article 304(b), High Court rightly held that the E 
1991 Act was invalid. 
Allowing the appeals, the Court 
HELD: I. The H.P. Taxation (On Certain goods Carried by Road) 
Act, 1991 is not ultra vires the Constitution, thus the order of High Court F 
is quashed and set aside. Further as the 1976 Act does not survive because 
of its .repeal and by enactment of the Himachal Pradesh Taxation (On 
certain Goods carried by Road) Act, 1991, no further declaration is granted. 
11071-H; 1072-A-BI 
2. A demand for tax from the traders in common with others is not G 
a restriction on the right to carry on trade, commerce and intercourse. Such 
tax wiluld not come within the purview of the restrictions contemplated 
under Article 301 of the Constitution unless it is established that in reality, 
it 

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