Madhya Pradesh High Court
Puneet Travels And Ors. vs State Of Madhya Pradesh And Ors. on 2 August, 1995
Equivalent citations: II(1998)ACC482, 1996(0)MPLJ318, 1996 A I H C 3362, (1996) JAB LJ 103, (1996) MPLJ 318, (1998) 2 ACC 482
Author: S.B. Sakrikar
Bench: S.B. Sakrikar
ORDER
1. This order will also govern the disposal of Writ Petition No. 3112 of 1994, Sagar Motor Transport Company and Ors. v. State of M. P. and Anr.; Writ Petition No. 3505 of 1994, Ram Prasad Purohit and Ors. v. State of M. P. and Ors.; Writ Petition No. 3804 of 1994, Durg Roadways Private Ltd. v. State of M. P. and Anr.; Writ Petition No. 44 of 1995, Rishi Kumar Jaiswal and Ors. v. State of M. P. and Ors. and Writ Petition No. 748 of 1995, District Transport Service and Ors. v. State of M. P. and Ors..
2. In all the petitions, the petitioners are transport operators holding stage carriage permits of various routes, who have, challenged the constitutional validity of the Madhya Pradesh Motoryan Karadhan (Vidhi Manyakaran) Adhiniyam, 1994 (for short 'Validation Act'), enacted to validate the levy of additional tax on public service vehicles in the State of Madhya Pradesh, which received the assent of the Governor on 25th June, 1994 and was published in the Madhya Pradesh Gazette (Extraordinary) dated 27th June, 1994, contains only 3 sections, which are reproduced :
"1. This Act may be called the Madhya Pradesh Motoryan Karadhan (Vidhi Manyakaran) Adhiniyam, 1994.
2. Words and expressions used in this Act shall have the meaning assigned to them in the Motor Vehicles Act, 1988 and the repealed Madhya Pradesh Motor Vehicles Taxation Act, 1947.
3. Notwithstanding any judgment, decree or order of any Court, the rate of additional tax levied under Section 3-A of the Madhya Pradesh Motor Vehicles Taxation Act, 1947 during the period commencing from the 16th day of June, 1991 and ending on the 15th day of October 1991, shall be deemed to be twenty paise per ten kilometers for the entire distance to be covered during the month in accordance with the conditions attached to the permit."
3. The case of the petitioners is that, they being the holders of the permits are plying their carriage on the conditions of their permits for stage carriages, according to the conditions of the permits and are paying tax as required by law. Prior to enforcement of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991, stage carriage permit holders were paying tax according to the proviso of M. P. Motor Vehicles Taxation Act, 1947 (for short the Act of 1947'), Section 3-A of which provides for levy of additional tax on public service vehicles in addition to tax levied under Section 3 of the Act of 1947, Section 3-A was inserted in the Act of 1947 by Act No. 13/78 which made a provision of levy of additional tax on all public service vehicles having seating capacity of more than 6 passengers including driver and conductor at the rate specified in the Third Schedule of the Act of 1947 to which a owner is liable to pay. Section 3-A was further amended vide Act No. 6 of 1989, which reads thus -
"3-A. Levy of additional tax, on public service Vehicles. - (1) In addition to the tax levied under Section 3, but subject to rules as may be made by the State Government in this behalf, there shall be levied and paid to the State Government an additional tax on all public service vehicles at the rate specified in the Third Schedule :
Provided that no additional tax shall be levied on public service vehicles -
(i) having seating capacity not exceeding six passengers excluding the driver and plying with valid permit; or
(ii) plying exclusively within the areas of Municipal Corporations, Municipal Committees, Cantonment Boards, Notified Area Committees, Special Area Development Authorities and on such routes serving adjacent areas as may be approved and notified by the State Government.
(2) The tax leviable under sub-section (1) shall be paid by the owner of the public service vehicle for each month at the rate specified in the Third Schedule.
(3) The State Government may, by notification amend the rate of tax specified in the Third Schedule, and thereupon Third Schedule shall stand amended accordingly. Every notification issued under this sub-section shall be laid on the table of the Legislative Assembly and the provision of Section 24-A of the Madhya Pradesh General Clauses Act, 1957 (No. 3 of 1958) shall apply thereto as they apply to a rule :
Provided that the rate of tax shall not be increased by more than fifty per cent of the rate specified in the said Schedule:
Provided further that no notification shall be issued under this sub-section without giving in the Gazette such previous notice as the State Government may consider reasonable of its intention to issue such notification."
4. The amendment in Section 3-A, provided the rate of tax for stage carriages in Col. II of the Third Schedule. The State Government, vide notification published on 29-8-1989 further made an amendment in the Third Schedule whereby rate was amended as per 4 paise per 10 km for the entire distance covered during the month in accordance with the conditions attached to the permit and that for the period between 16th June and 15th October both days including the rate specified as 12 paise per seat per 10 km.
5. Thereafter State Government issued notification dated 7-6-1991 and increased the rate of tax in the Third Schedule as under :-
(i) 20 paise per seat per 10 km in the entire distance to be covered during the month in accordance with the conditions attached to the permits.
(ii) 20 paise per seat per 10 km for the entire distance to be covered in accordance with the condition attached to the permit during the period for which the permit is granted.
6. This notification was challenged by the stage carriage permit holders before this Court in various petitions which were decided by a Division Bench of this Court by a common judgment in R. J. Fouzdar Bus Service v. State of M. P., 1994 MPLJ 324, wherein, part of the notification was quashed, holding, that the effect of Section 3-A of Act of 1947, as amended by M. P. Act 6 of 1989 is that the delegation of powers given to the State to amend the Third Schedule by Notification is restricted to a maximum increase by fifty per cent of the previous rates specified in the Third Schedule and not the Schedule itself. Hence, tax increased to 20 paise from 14 paise was held within the permissible limit as provided in 1st proviso to sub-section (iii) to Section 3-A, while the increase to 20 paise from 12 paise for the period from 16th June to 15th October was held to be beyond the delegated power of the State Government.
7. After the decision in case of R. J. Fouzdar's Bus Service, the State Legislature to rectify the defect enacted the Validation Act, making it applicable retrospectively, which has been challenged in these petitions.
8. Shri B. K. Rawat, learned counsel for the petitioners contended that State Legislature under Article 245 of the Constitution with reference to different lists in the Seventh Schedule is competent to enact the law relating as provided in Article 246 of the Constitution, but it has no power to validate a law which has been declared invalid, so as to render a judicial decision, ineffective, which is an entrenchment on the judicial pronouncement, it is a colourable exercise of power, hence the Validation Act is invalid. It was further submitted that when first proviso of Section 3-A specifically lays down that increase in the rate of tax shall not be more than 50 per cent of the rate specified in the Schedule and that two types of rate of tax having been provided in the Schedule, for pucca route and another for kuchcha route, by the Validation Act, increase in tax of more than 50 percent retrospectively, is beyond the constitutional power of the State Legislature, learned counsel in support of contentions cited the decisions reported in State of Haryana v. Karnal Co-op. Farmers' Society Limited, AIR 1994 SC 1; Shri P. C. Mills v. Broach Municipality, AIR 1970 SC 192 and I.N. Saksena v. State of M. P., AIR 1976 SC 2250.
9. Shri Anoop Choudhary, Advocate General appearing with Shri S. K. Seth, Government Advocate contended that Section 3-A of the Act of 1947 and its Third Schedule as amended by Act No. 6 of 1989, wherein, rates of tax were prescribed, gives power and authority to State to amend the rate of tax in the Third Schedule by notification imposing a restriction to the maximum increase of 50 percent of the previous rates specified in Third Schedule, after giving due notice to the parties likely to be affected by the intended amendment. However, this delegated power and the authority of the State Government was restricted to 50 per cent increase; beyond that the State was not empowered to do so in its delegated authority, which was within the competence of legislature, hence, this Court in the case of R. J. Fouzdar Bus Sendee struck down the one part of the notification, whereby, the rate was increased which was beyond 50 percent. It is after this judgment the State Legislature in exercise of its plenary powers conferred by Articles 245 and 246 of the Constitution enacted Validation Act to charge the rate of tax retrospectively which was increased by the notification from 12 paise to 20 paise as the increase was in public interest. The Validation Act cannot be said to be encroached upon or to override the judicial decision in R. J, Fouzdar Bus Service case, nor the said decision has been rendered ineffective, reliance was placed on the decisions of the Supreme Court in cases of R. K. Garg v. Union of India, AIR 1981 SC 2138; G.K. Krishnan v. State of Tamil Nadu, AIR 1975 SC 583; Mohan Singh v. Pasupatinath, AIR 1969 SC 135; Gauri Shankar v. Union of India, 1994 (6) SCC 349 and recent judgment in the case of Amrit Vanaspati Co. Ltd. v. Union of India and Ors., JT 1995 (2) SC 359.
10. The plenary powers conferred under Articles 245 and 246 of the Constitution, on the Legislature to enact laws in respect of the topics covered by several lists can be exercised both prospectively and retrospectively. This legislative power conferred on the Legislature includes the subsidiary or auxiliary power to validate laws which have been found to be invalid. If a law passed by Legislature is struck down by the Court for one infirmity or another it would be competent to the appropriate Legislature to cure the said infirmity and pass the Validation Law under Article 246 of the Constitution so as to make the provisions of said earlier law effective from the date it was passed. Constitutional validity of a Validation Law enacted is to be judged by three tests : firstly, whether the Legislature possesses competence over the subject, secondly by validation the Legislature has removed the defect which the courts have found in the previous laws; thirdly, whether it is consistent with the provisions of Part III of the Constitution. If the validation legislation stands the three tests, the law so enacted cannot be declared to be unconstitutional and the same will be in exercise of the legislative powers conferred on the appropriate Legislature to enact laws in respect of the topics covered by several entries. See the case of I. N. Saksena v. State of M. P. (supra).
11. In the petitions there is no challenge to competence of the Legislature to enact Validating Act making the provisions of the same applicable retrospectively. The main contention is that the Validating Act is unconstitutional as it has encroached upon the decision of this Court in the case of R. J. Fouzdar's case. From a bare reading of the judgment in R. J. Fouzdar's case shows that it considered the effect of Section 3-A of Act of 1947 as amended by Amending Act, M. P. Act No. 6 of 1989 which permits the State Government in its delegated powers to amend the rate of additional tax prescribed in the Third Schedule subject to certain restrictions by a notification in the manner prescribed and to levy tax in addition to the tax on public service vehicles at the rate specified in the Third Schedule of the Act of 1947. The Court, on examining the impugned notification dated 7-6-1991 issued by the State Government in its delegated power under Section 3-A increasing the levy of rate of additional tax for the period from 16th June to 15th October, by amending Third Schedule by a notification, found that rates prescribed by notification dated 29-8-1989 as 14 paise per seat per 10 km for a period between 16th October to 15th June and 12 paise per seat per 10 km. from 16th June to 15th October. While by impugned notification dated 7-6-1991 to 20 paise per seat per 10 km. increase from 12 paise to 20 paise for the period 16th June to 15th October was more than 50 per cent, as the rate of tax prescribed can be to the extent of (12 + 6) = 18 paise only. Hence, it was held to be beyond the restriction imposed on the State. So far as the increase to 20 paise from 14 paise it was found to be within the limits prescribed by the first proviso to sub-section (3) of Section 3-A as it can be extended upto (14 + 7) = 21 paise.
12. After the decision in the aforesaid case of R. J. Fouzdar, the Legislature enacted the Validation Act. A look to Section 3 of the Act shows that it has fixed the rate during the period commencing from 16th June 1991 and ending on 15th day of October, 1991 which shall be deemed to be 20 paise per seat per 10 km for the entire distance to be covered during the months in accordance with the conditions attached to the permit. By this provision the Legislature did not encroach upon the decision in R. J. Fouzdar's case nor the decision was made ineffective, but, the defect found by the Court was removed and cured by Validation Act, making it applicable retrospectively. Validation Act removed the cause, as the State in its delegated power was not competent to increase the rate of tax beyond 50 per cent prescribed in the Third Schedule, as this Court has' found that it was within the competence of the State Legislature to make an increase more than 50 per cent and not within the restricted power of the State. Therefore, so far as the delegated power of the State is concerned, that decision stands, effect of which has not been taken away by the Validation Act. It is also not a case of making illegal part of the notification, making the same as valid. It is settled that the validation of tax so declared illegal may be done only if the ground of illegality or invalidity are capable of being removed and are in fact removed and making the tax legal, such Validation Law cannot be said to an encroachment on the powers of Judiciary. See Shri, P. C. Mills Ltd's case (supra); Tirath Ram v. State of U. P., AIR 1973 SC 405 and The Government of A. P. v. Hindustan Machine Tools, AIR 1975 SC 2037.
13. The decision of the Supreme Court in the case of Stale of Haryana v. Karnal Co-op. Farmers' (supra) does not help the petitioners, wherein, the Supreme Court ruled that under Article 245 Legislature while has the legislative power to render ineffective the earlier judicial decision by removing or altering or neutralizing the legal basis in the unamended law on which such decisions were founded, even retrospectively, does not have the power to render ineffective the earlier judicial decisions as invalid or not binding for such power, if exercised would not be a legislative power but a judicial power which cannot be encroached upon by a Legislature under our Constitution. Which is not the case here.
14. Coming to the other contention, that the increase in tax without giving the two rates on stage carriage permit holders; operating on pucca and kuchcha routes is unreasonable as in earlier notifications a lesser rate was specified for the stage carriage owners of vehicles operating on kuchcha route than those who operating on pucca routes. In the opinion of this Court the contention has no merit as the impugned notification a part of which was quashed in R. J. Fouzdar's case did not prescribe two different rates of tax to be paid by the owners of a public service vehicle operating on kuchcha and pucca routes. Besides prescribing the rate for stage carriages operating on the routes irrespective of pucca or kuchcha cannot be said to so unreasonable, so as to struck down as it does not contravenes fundamental right guaranteed under Article 19(1)(g) or any other constitutional provisions contained in Part III of the Constitution. Moreover, it is for the Legislation and not for the Court to review on wisdom, or advisibility or expediency of tax as the Court has no concern whatsoever, so long it is not inconsistent with the provisions of the Constitution. The tax may be often oppressive, unjust and even unnecessary, but this can constitute no reason for judicial interference.
15. As an upshot, the petitions are devoid of substance and are dismissed with no order as to costs. Security amount, if any, be refunded to the petitioners.