THE STATE OF HIMACHAL PRADESH AND OTHERS versus GOEL BUS SERVICE KULLU ETC. ETC.

Citation: [2023] 5 S.C.R. 879 · Decided: 13-01-2023 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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   [2023] 5 S.C.R. 879
879
THE STATE OF HIMACHAL PRADESH AND OTHERS
v.
GOEL BUS SERVICE KULLU ETC. ETC.
(Civil Appeal No(S). 5534-5594 of 2011)
JANUARY 13, 2023
[SANJAY KISHAN KAUL, ABHAY S. OKA AND
VIKRAM NATH, JJ.]
Motor Vehicles – Himachal Pradesh Motor Vehicles Taxation
Act 1972 – s.3A(3) [introduced vide Amending Act of 1999] – Validity
of – Special road tax provided under sub-section (3) of s.3A – If
manifestly unjust / glaringly unconstitutional – Regulatory or
compensatory in nature – Repugnancy, if any, with Central
enactment – Levy of lumpsum tax – Validity – Whether imposition of
additional special road tax levied on transport vehicle used without
a valid permit is not a tax but a penalty and is ultra vires the legislative
powers of the State Legislature under Entries 56 and 57 of List II
(the State List) of the Seventh Schedule to the Constitution – Held:
Tax imposed u/s.3A(3) is regulatory in character and is not a penalty
– Imposition of such additional special road tax was only to keep a
check or a discipline on the transport vehicle operators to use their
vehicles in accordance with the statutory provisions – Also, s.3A(3)
of the 1972 Act is within the legislative competence of the State
Legislature, and lumpsum tax could be levied – The State Legislatures
had the power to levy taxes not only under Entries 56 and 57 of List
II but also to lay down the principles under Entry 35 of List III –
Therefore, no repugnancy of any kind could be alleged or pleaded
or proved in the absence of there being any central law laying down
principles of levy of tax – Further, nothing on record to indict the
offending provision as being manifestly unjust or glaringly
unconstitutional – Constitution of India – Arts. 246 and 254; Seventh
Schedule, List II, Entries 56 and 57 and List III, Entry 35.
Motor Vehicles – Himachal Pradesh Motor Vehicles Taxation
Act 1972 – s.3A(3) [introduced vide Amending Act of 1999] – Validity
of – Special road tax provided under sub-section (3) of s.3A – Held:
The additional special road tax chargeable u/s.3A(3) would be in
addition to any sentence or fine imposed u/s.192A of the Motor
Vehicles Act, 1988 – The provisions under s.192A are in no way
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SUPREME COURT REPORTS
[2023] 5 S.C.R.
violated or conflicted by imposing an additional special tax for
violation of use of vehicles without permit – Motor Vehicles Act,
1988 – s.192A.
Tax / Taxation –  Fiscal statutes – Scope of interference –
Held: The Courts must show judicial restraint to interfere with tax
legislation unless it is shown and proved that such taxing statute is
manifestly unjust or glaringly unconstitutional – Taxing statutes
cannot be placed or tested or viewed on the same principles as
laws affecting civil rights such as freedom of speech, religion, etc.
– The test of taxing statutes would be viewed on more stringent tests
and the law makers should be given greater latitude –  Testing the
provisions of the offending section with regard to the settled
principles of interpretation of taxing statutes, it is to be ascertained
on the following three aspects: (1) Whether it is manifestly unjust
or glaringly unconstitutional; (2)Whether it is regulatory or
compensatory in nature; and (3) Whether there is any repugnancy
with the provisions in the Central enactment.
The State of Himachal Pradesh, exercising the powers
drawn from Entries 56 and 57 of List II of the Seventh Schedule
enacted the Himachal Pradesh Motor Vehicles Taxation Act 1972.
Section 3 of the 1972 Act provided for levy and collection of taxes
on all motor vehicles which were to be used or kept for use in
the State of Himachal Pradesh. By the Amending Act of 1999,
Section 3A was introduced which carries a heading: Levy of
Special Road Tax.  This special road tax was in addition to the tax
levied under Section 3. The special road tax was also levied and
charged on all transport vehicles used or kept for use in Himachal
Pradesh specified in column 2 of Schedule 3 and the rate of tax
was to be not exceeding the rates specified in column 3 of Schedule
3 of the Act.  The High Court declared sub-section (3) of Section
3A as ultra vires opining that the tax imposed by Section 3A(3)
was in the nature of penalty and for which the State Legislature
had no power to make laws. According to the High Court it was
penalty because a further special road tax was leviable where a
transport vehicle was plied without any valid permit or in any
manner not

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