REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   7304     OF 2008

(Arising out of SLP (C) No.10275 of 2007)

R. Senthil Babu ....Appellant  

versus

State of Tamil Nadu and Anr.           ....Respondents  

CIVIL APPEAL NO.   7305       OF 2008

(Arising out of SLP (C) No.10277 of 2007)

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2.  The short question which arises for determination in these Civil Appeals concerns challenge to the

Constitutional validity of Tamil Nadu Motor Vehicles Taxation (Amendment) Act, 1998, by which

initially the rate of tax in respect of contract carriage stood increased from Rs.1500/- per seat per

quarter to  Rs.2000/-  per seat per quarter,  and subsequently the said rate stood  enhanced from

Rs.2000/- per seat per quarter to Rs.3000/- per seat per quarter vide Notification No.1184 dated

30.11.2001 with effect from 1st December 2001.

3. The basis of the challenge rests on the uneven burden placed on the owners of contract

carriage vis-a-vis stage carriage. Broadly it is contended that there is no rational in the imposition of

the levy, that tax is imposed indiscriminately, that it is levied to cross-subsidize stage carriage and

that uneven burden has been placed on the owners of contract carriage which has no nexus with the

services or amenities provided.

4.        Generally, in a matter of this nature, the quantifiable data forms the basis of the challenge. At

the initial stage when the petition is filed in such cases there has got to be a precise formulation of the

ground  of  challenge  from  the  side  of  the  appellants  based  on  some  statistical  data  as  to

disproportionality of the rate of tax. It is only thereafter that the burden will shift on to the State to

submit quantifiable and measurable data.

5.            In the present case we find that the initial burden on the appellants itself has not been

discharged in the sense that the petitions filed before the High Court were very sketchy. A challenge

of this nature requires the appellants to furnish greater details before the State could be called upon

to submit quantifiable and measurable data justifying the impugned rate. Ultimately, it is the State

which has to meet the allegations made in the writ petitions and if those allegations made in the writ

petitions are vague, inaccurate or insufficient then it would not be possible for the State to submit its

reply/data to the Court.

6.         One more aspect in these cases also needs to be mentioned. It has been argued before us that

the tax in question is a compensatory tax. Certain judgments of this Court are also relied upon in this

regard, the latest being the judgment in the case of Jindal Stainless Ltd. (2) and Another vs. State of

Haryana and Others [(2006) 7 SCC 241].

7.          In our view, this repeated increase in the rate of tax, particularly the incidence of which is

more on the contract carriage vis.-a.vis. stage carriage raises question of public importance. At the

same time the State can certainly rely upon the data available to show cross subsidization, if it so

exists in a given case, by which stage carriage gets subsidized in public interest.

8.       Keeping in mind the gamut of the dispute involved, we are of the view that we cannot interfere

with the impugned judgment of the High Court, particularly when the pleadings at the initial stage

were insufficient.

9. Realizing this difficulty, learned counsel appearing on behalf of the appellants fairly stated

that he would seek permission of this Court to withdraw the civil appeals/special leave petitions with

liberty to file proper writ petition in the High Court giving requisite details  and available data.

Normally, we would not have granted such permission. However, as stated above, questions of public

importance arises in these matters, particularly in the context of the principles of proportionality

under Article 14 of the Constitution and the later development of law as indicated by this Court in

the case of Jindal Stainless Ltd. (Supra).

10.   In the circumstances we permit the appellants herein to withdraw the Civil Appeals with liberty

to file proper writ petition, if so advised. We make it clear that we do not find any infirmity in the

impugned  judgment  of  the  High  Court  which  is  based  on  the  petition  originally filed  by  the

petitioners. Subject to above, Civil Appeals stand dismissed with no order as to costs. We make it

clear that if a proper writ petition is filed giving requisite data to the satisfaction of the High Court,

then any observation made in the impugned judgment will not come in the way of the appellants. All

contentions of both sides are expressly kept open.

11.    Similar order was passed in a group of cases i.e. Tamil Nadu Omni Bus Owners Association v.

State of Tamil Nadu & Anr.( i.e. Civil Appeal No.1177 of 2006 etc. disposed of on 28.11.2007).

12. Subject to the above, the Civil Appeals are dismissed with no orders as to costs.

……….………………………….J. (Dr. ARIJIT PASAYAT)

……….…………………………J. (Dr. MUKUNDAKAM SHARMA)

New Delhi, December 16,  2008