1. The petitioner is he owner of a lorry bearing registration No. MDS 2991, and he is plying it as a public goods carrier vehicle s his occupation. By this petition he seeks a rule forbidding the State of Madras, the respondent, form giving effect to the provisions of the Madras Motor Vehicles (Amendment) Act, Act IX of 1962. The Madras Motor Vehicles Taxation Act, 1931, by S. 4(1) provides that the State Government may, by notification in he official Gazette from time to time, direct that a tax shall be levied on every motor vehicle using any public road in the State of Madras. But the sub-section requires the notification to specify the rates at which and the quarter from which the tax shall be levied. There is a proviso to the effect that the rates shall not exceed the maximum specified in Sch.. II. In that schedule item 2 relates to goods vehicles and sub-item 2 relates to goods vehicles and sub-item (I) rates to vehicles exceeding 150 cwt, but not exceeding 180 cwt., in weight laden, and the maximum rate of quartile tax therefore is prescribed as Rs. 427. The petitioner is paying this tax an does not complain about it. Madras Act IX of 1962 amended the schedule, the main object being to enhance the maximum rate of tax. The Act came into force on 6-9-1962. But S. 2 of the Amending Act provided that a notification under Sub-s. (1) of S. 4 of the main Act may be issued so as to have retrospective effect from a date not earlier that the 1st day of July 1962. On 14-9-1962, a notification was made prescribing the maximum rates to have effect from 1-7-1962. The schedule, as amended, so far as the petitioner is concerned, raises the maximum rate to Rs. 600. By item 3, sub-item (1). It is the difference between the old and the amended maximum rates that is under attack by the petitioner.
(2) The first contention for the petitioner is that the increase of the rate from Rs. 427 to Rs. 600 is so oppressive that it is destructive of his fundamental right to carry on business and, therefore, violates Art. 19(1)(g) of the Constitution. The petitioner, in support of his contention, has attached an annexure to his affidavit in which he has given the particulars of his income and of expenditure. He says that his gross income at the rate of Rs. 40 per day come to Rs. 14,600 per annum. After meeting the various items of expenses in respect of the lorry including the tax payable under S. 4(1) of Madras Act III of 1961, he is left with a net annual income of Rs. 1,992. His complaint is that if the difference of tax between the two maxima of rates is paid, he would be left with about Rs. 1,200 per annum as net income. On these facts, he urges that the enhancement of the rate has the effect of restraining unreasonably his right to carry on business.
(3) It has been held by this Court and the Supreme Court that the taxing power of the Legislature is subject to constitutional limitations, including the provisions in Part III of the Constitution. It will suffice to refer to the decision of the Supreme Court in Khyerbari Tea Co., Ltd. v. State of Assam, : 5SCR975 , where it was observed :
'It is, of course, true that the validity of tax laws can be questioned in the light of the provisions of Arts. 14, 19 and 301 if the said tax directly and immediately imposes a restriction in the freedom of trade; but the power conferred on this Court to strike down a taxing statute if it contravenes the provisions of Arts. 14, 19 and 301, has to be exercised with circumstances, bearing in mind that the powers of the State to levy taxes for the purposes of governance and for carrying out its welfare activities a necessary attribute of sovereignty and in that sense it is a power of paramount character. In what cases a taxing statute can be struck down..............'
Reference may also be made to K.T. Moopil Nair v. State of Kerala, : 3SCR77 , which struck down the Travancore Cochin Land Tax Act as being confiscator. Placing reliance on this judgment learned counsel for the petitioner contends that the effect of the enhancement of the rate of tax is that this income form his business of plying the lorry has been almost taken away and in that sense it is confiscator.
(4) I am unable to accept this contention. The facts of this case, even as stated by the petitioner, show that even after paying the enhanced rate of tax, he would have about Rs. 100 as net income per month. In no sense, therefore, can the increase in the rate of tax be said to be confiscator. The quantum of tax, as held by the Supreme Court in Rai Ramakrishna v. State of Bihar, : 50ITR171(SC) , is a matter within the competence of the legislature. There is no indication that the purpose of the Amending Act is in any way confiscatory. The Motor Vehicles Taxation is in the nature of compensatory tax. In the counter affidavit filed by the respondent it was pointed out that the original rate of tax was filed as early as 1949 and since then there had been an enormous increase in the cost of maintaining the roads, and that this accounted for the increase in the rate prescribed by the Amending Act. The increase in the rate of tax is not shown to be in any way unreasonable, if regard is had to those facts. It has, therefore, to be held that there is no substance in the contention for the petitioner that Madras Act IX of 1962 is confiscator in character and, therefore, offend Articles 19(1)(g).
(5) The next argument for the petitioner is based on S. 5(1)(d) of Madras Act III of 1931. Sub-s. (1) of S. 5 enjoins that the tax prescribed by S. 4(1) should be paid by the registered owner of the motor vehicle quarterly, half-yearly or annually as he chooses. Clause (d) of S. 5(1) reads:
'No motor vehicle shall be used on any public road in the State of Madras at any time after the issue of a notification under sub-s (1) of S. 4, unless a licence permitting such use during such time is obtained under clause (a)..............'
Counsel for the petitioner contends that since under S. 42 of the Motor Vehicles Act, 1939, he has obtained a permit for his vehicles and, therefore, he is entitled to run it on the public road, S. 5(1)(d) of the Madras Act III of 1931 is in conflict with that privilege, and is, therefore, inconsistent with the provisions of the Motor Vehicles Act.
I think there is no substance in this contention. S. 42 of the Motor Vehicles Act does not say that notwithstanding any other law, a person who is given a permit under that provision, would be entitled to run his vehicle on the public road. Apart from that, clause (d) of S. 5(1) is intended to ensure collection of tax due on a particular motor vehicle. But it is argued that Ss. 7 and 9 of the Act III of 1931, provided for penalty for failure to pay tax and also machinery for recovery of tax as an arrears of land revenue, and, therefor, it would be unreasonable to provide for an inhibition of the use of the vehicle unless a licence permitting such use has been obtained under S. 5(1)(a). I do not see why the legislature, for the purpose of ensuring effective collection of tax, cannot provide for more than one means of achieving the object. Further S. 7 will be employed only when S. 5(1)(d) is contravened; and S. 9 when as a result of non-compliance with that provision, the tax due falls into arrears. The object of S. 5(1)(d) is to see that tax is paid at the commencement of he quarter or half year or year, and that is perhaps why it provides for the inhibition. I am not, therefore, convinced that S. 5(1)(d) is unreasonable.
(6) The next argument of the petitioner is hat the retrospective levy is bad. This is apparently with reference to S. 2 of the Amending Act and the notification made thereunder. As I already mentioned, provision is made by that section that a notification under sub-s (1) of S. 4 may be issued so as to have retrospective effect from a day not earlier that the first day of July 1962. I is well established that the legislature, so long as it acts within the amidst of its powers, can make a legislation retrospective in effect.
(7) Learned counsel for the petitioner was unable to show how in view of the express provision made by S. 2 of the Amendment Act, the retrospective effect of the notification is illegal. The Amending Act, as a I said, came into force on 6-9-1962, and the notification was made by a Government Order dated 14-9-1962. The notification expressly stated that it would be effective from 1-7-1962. The power to give retrospective effect, as I mentioned, having been given expressly by the Legislature. I am unable to hold that there is anything bad about it.
(8) Lastly it is said for the petitioner that inasmuch as the rate of Motor Vehicles taxation is rested upon the laden weight and not upon the personal capacity of the owner of the vehicle, the Amending Act is bad. Beyond stating the proposition, counsel has not elaborated to make good his contention. The tax is not a personal ax but is levied on the motor vehicle. Being in the nature of a compensatory tax, it is naturally based upon the laden weight as defined in Madras Act III of 1931, and as also in he Motor Vehicles Act of 1939.
(9) The petition is dismissed with costs. Counsel's fee Rs. 100.
(10) Petition dismissed.