REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.                   OF 2008

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

R. Senthi Babu ....

Appellant  

versus

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

CIVIL APPEAL NO.                   OF 2008

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

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

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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

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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].

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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).

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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.

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(Dr. MUKUNDAKAM SHARMA) New Delhi, December 16,  2008

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