REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.        1120              OF 2009

(Arising out of SLP (C) No.1693 of 2007)

A. Venkatakrishnan ....

Appellant  

versus

State of Tamil Nadu and Ors.  ....Respondents  

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the judgment of a Division Bench of the

Madras  High  Court  dismissing  several  Writ  Petitions  and  Writ  Appeals

including Writ Petition Nos.18618/2003 to 18621/2003.  

3.      The short question which arises for determination in this Civil Appeal

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.

4. 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.

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5.        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  appellant  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.

6.            In the present case we find that the initial burden on the appellant

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

appellant 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.

7.         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

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

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

8.          In our view, this repeated increase in the rate of tax, particularly the

incidence of which is more on the contract carriage vis-à-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.

9.       Keeping in mind the gamut of the dispute involved, we are of the

view that the impugned judgment of the High Court cannot be interfered

with, particularly when the pleadings at the initial stage were insufficient.

10. Realizing this difficulty, learned counsel appearing on behalf of the

appellant  fairly  stated  that  he  would  seek  permission  of  this  Court  to

withdraw the Civil  Appeal  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

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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).

11.   In the circumstances we permit the appellant herein to withdraw the

Civil Appeal 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 Appeal stands 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  appellant.  All

contentions of both sides are expressly kept open.

12.    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).

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13. Subject to the above, the Civil Appeal is dismissed with no orders as

to costs.

……………………………………J. (Dr. ARIJIT PASAYAT)

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

New Delhi, February 19, 2009

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