Karnataka High Court
Sree Gajanan Motor Transport Company ... vs State Of Karnataka, And Others on 22 June, 1990
Equivalent citations: AIR1991KANT40, ILR1990KAR2718, 1990(3)KARLJ63, AIR 1991 (NOC) 40 (KAR), (1991) 2 HINDULR 64, (1991) 1 CURCC 212, ILR (1990) KAR 2718
Author: S. Mohan
Bench: S. Mohan
ORDER
S. Mohan, C. J.
1. It is enough if we refer to the facts of the case in W.P. No. 8371 of 1989. The petitioner is a Public Limited Company operating about 90 stage carriage services in the State of Karnataka and some of them are inter-State routes.
2. For purposes of recruiting qualified trained drivers for the business of the company, the petitioner established two driving schools at Shimoga and Sagar in the district of Shimoga. In order to impart instructions to the learner-drivers in the driving of heavy passenger motor vehicles, the petitioner is owning three omni buses for which necessary licences have been obtained.
3. He has also established a driving school which is regulated by the provisions of the Motor Vehicles Act, 1939 (hereinafter called the Act) and Rule 30 of the Rules framed under the Act. They contain stringent provisions with reference to the establishment and the running of schools.
4. The petitioner submits that under Art. 246(2) read with Entry No. 35 of List-III, the Parliament and, subject to the provisions of Art. 254 read with Art. 246(1) of the Constitution of India, the legislature of a State has power to make laws with respect to "mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied." One such Act is the Motor Vehicles Act, 1939. That defines under S. 2(18-A) of the Act an 'omni-bus' as "any motor vehicles constructed or adapted to carry more than six persons excluding the driver."
5. S. 42 of the said Act prohibits the user of a public service vehicle and a goods vehicle without a permit and a public service vehicle is defined by S. 2(25) of the Act as any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward and includes a motor cab, contract carriage and stage carriage.
6. It is well settled by the ruling of the Supreme Court that the motor vehicles tax is a compensatory tax for the use of trading facilities. On 1-4-1989 by amendment, the Karnataka Motor Vehicles Taxation Act and Part-A of the Schedule has been amended as a result of which the tax has been increased enormously adopting different basis than what was prevalent hitherto. Originally it was based on the seating capacity, but now after the amendment, it has been modified to floor-area. This is not only unwarranted but also makes an invidious distinction concerning these omni-buses. Therefore, the writ petition has been preferred on the following among other grounds :-
(1) If motor vehicles lax is only a compensatory tax, it must have a rational basis. Classification of vehicles on any basis must have nexus to the user of the road and it should not be arbitrary and discriminatory. Classifying omni-buses on the basis of floor-area adopted for private service vehicles is equally bad.
(2) It is beyond legislative competence as the tax has been increased not for the purpose of providing facilities for the better conduct of the tourist transport business of the petitioner. Even at present the State is receiving surplus revenue being realised from the tax on motor vehicles over the expenditure. Therefore, there is no warrant for the tax at all.
(3) The Taxation Act is a regulatory measure. It is not the purpose of the taxation Act to levy taxes on vehicles which do not use the roads or in any way form part of the flow of traffic on the roads which is required to be regulated. Therefore, the power of taxation cannot exceed compensatory nature.
(4) The impugned increase of tax by substituting the basis of the assessment of tax earlier made on the seating capacity singling out items 8 and 9 viz., omni-buses and private service vehicles for the change of the basis of the assessment of tax to floor area of the vehicles, is in contravention of Article 14 of the Constitution of India.
(5) Without prejudice to the above, it is submitted that the petitioner owns the driving schools and, as a licensee of the driving schools, exclusively uses the omni-buses for the conveyance of the students and the staff of the said driving schoois and therefore the taxation should be under Entry No. 8(d)(ii) of Part-A as provided under S. 7 of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989.
7. In support of these grounds, Mr. Rangaswamy, learned counsel for the petitioner, after drawing our attention to the relevant provisions of the Motor Vehicles Act (Central Act No. 4 of 1939) as well as Act No. 1 of 1989 and also Karnataka Motor Vehicles Taxation Act, submits that there is a definite category known as omni-buses. Though the Motor Vehicles Taxation Act by itself does not define what a omni-bus is, under Section 2, clause (j), it refers to the parent Act viz., Motor Vehicles Act. So far as Act No. 4 of 39 is concerned, S.2(18A) defines "omnibus". "Stage carriage" has been defined under S. 2(29). A reading of the definitions would clearly disclose that the construction of the vehicles itself is on the basis of the seating capacity. It was this basis that was adopted for the purpose of taxation hitherto. It was this pattern of taxation which had been in vogue for a long time. Suddenly, without any justification, by the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989 (Act No. 14 of 1989), this basis is given a complete go-by and the floor area is adopted.
This is clearly discriminatory because it is well settled law that the motor vehicles tax is compensatory in character. If that is so, why should omnibus and equally private service vehicle which has come to be defined under Sec. 2(33) of the Motor Vehicles Act, 1988 (for short the Act of 1988), be subjected to a hostile discrimination by the adoption of a different basis, is not explained. No doubt, the State for the purposes of taxation may adopt any classification, but even such a classification must have a nexus to the objects sought to be achieved. But in this case no such object is sought to be achieved. So far as motor vehicles belonging to one class viz., omnibuses and private service vehicles are concerned, subjecting them to a different unit of taxation is bad in law and is violative of Art. 14 of the Constitution. Therefore, it is submitted that where the unit of taxation is one of seating capacity, an adoption of different basis is discriminatory. In support of this submission, learned counsel relies on the decision of the Supreme Court in Ayurveda Pharmacy v. State of Tamil Nadu, wherein, when a different basis was adopted, having regard to the higher percentage of alcohol in relation to the medicinal preparations, it was held to be bad. Similarly, where different grazing rates were adopted --one for the cattle of Madhya Pradesh and another for graziers of other States, that was held to be discriminatory, vide . Then again in the case of State of Andhra Pradesh v. Nalla Raja Reddy, where minimum rate was adopted for dry lands with reference to the quality and fertility, it was held to be violative of Art. 14 of the Constitution. Based on the ratios it could easily be deduced that where different mode altogether is adopted and the petitioner is subjected to hostile discrimination, taxation cannot be supported. Then again what was sought to be achieved is only marginal increase. But, in this case, originally the petitioner was subjected to tax of Rs. 800/-per quarter and now it has been increased enormously to Rs. 4,900/- per quarter. Then again, the disproportionate unit from the seating capacity is not warranted because under S. 110 of the Act of 1988, the Central Government has the power to frame Rules specifying the seating capacity, construction, equipment etc. The manufacturer also mentions the seating capacity. Thus, from every point of view, the disproportion cannot be supported in law.
8. The second submission of the learned counsel is concerning the driving school. It cannot be denied that it is an educational institution. It cannot equally be denied that it is exclusively used for the conveyance of the students and the staff for the purposes of imparting knowledge of driving. Under those circumstances, the category under which the petitioner would fall is Entry No. 8(d)(ii) of Part-A of Schedule to the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989. It cannot be said that even in such a case, it could be classified as omnibuses in general and subject to heavier taxation. Concerning the establishment of the driving schools, there are strict statutory provisions. S. 12 of the Act of 1988 and the Rr. 24 to 32 of the Rules framed by the Central Government particularly R. 24(3) lay down as to what are all the criteria which could be taken into account for the grant of a licence of a driving school. A minimum of one vehicle with dual control is what is necessary. Same is the position if one looks at R. 34 of the Karnataka Motor Vehicles Rules. Therefore, where the petitioner has vehicles for the purposes of driving school, it is impossible to contend that he would fall under general clause of omnibuses.
9. In opposing these submissions, learned Advocate General would draw our attention to the statement of objects and reasons for the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989. Though that by itself is not very much advantageous to the State, yet what was sought to be remedied as seen from the Budget Speech of the Chief Minister is to plug loopholes in the leakage of the revenue by misusing the vehicles registered for one purpose and used for some other purpose and carrying on excess passengers without payment of any taxes. What the learned Advocate General wants to say is that the vehicles registered as omnibuses are being used invariably as Stage carriages carrying a number of passengers against the permit. In order to remedy this situation, the Government gave up the unit of seating capacity and switched over to floor area. It is not open for the petitioner to contend that the State has no power at all to do this. Nor again is it correct to say that in case of other motor vehicles, it is not the seating capacity which forms the unit. On the contrary, the Motor Vehicles Act which makes classification of various mechanically propelled vehicles as stage carriage, contract carriage, private carriage, omnibuses etc., has itself classified these vehicles. Turning to taxation with regard to the goods vehicle, it is laden weight and for scooters and motor-cycles, cubic capacity. Therefore, it is not possible to contend that one method of taxation alone is permissible or unit of taxation must be seating capacity. This is not a case of discrimination at all having regard to the object sought to be avhieved viz., to plug the loop holes.
10. Where the buses used for industry alone were subjected to a certain kind of tax, this Court upheld the validity of such a tax as seen from (Indian Telephone Industries v. State of Karnataka). The learned Advocate General has pressed into service the ratio of that judgment.
11. Equally in (The Malwa Bus Service (Pvt) Ltd. v. State of Punjab) where a contention was raised that the stage carriage cannot be subjected to a higher taxation in comparison to goods carriage, it was held that there was no discrimination whatever, having regard to the wide discretion that the State has in choosing the objects for the purposes of taxation, as seen from paragraph 21 of the judgment. Similar is the case in (M/s Hoochst Pharmaceuticals Ltd. v. State of Bihar) in relation to different surcharges. He therefore submitted that the above rulings were sufficient to negative the plea raised on behalf of the petitioner.
12. The petitioner may own driving schools. But, in the context of the classification for the purposes of taxation, it cannot be said that a driving school is an educational institution as is understood under item No. 8 of Part-A of the Schedule under S. 7 of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989. That postulates a situation where a vehicle is exclusively used for the conveyance of the students and the staff. Here, no such conveyance takes place. On the contrary, the licences in relation to the driving are important. It is a commercial venture. The object of giving lower taxation is to enable the educational institution to get some benefit. Here, therefore, the petitioner is running a commercial venture and he cannot equate himself to an educational institution and claim such a benefit. This contention also cannot be accepted. Thus, the learned Advocate General prays that the writ petition may be dismissed.
13. Having regard to the above contentions, only two questions arise for our con-sideration. (1) Whether, by reason of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989 by departure from the unit of taxation from the seating capacity to floor area in relation to omnibuses as well as private service vehicles, it is violative of the equity clause enshrined in Article 14 of the Constitution. (2) Whether the petitioner could be called an educational institution within the meaning of item 8 of cl. (d)(ii) of Part-A of the Schedule to Sec. 7 of the Karnataka Motor Vehicles Taxation (Amendment) Act, 1989.
14. It cannot be denied and it is not denied before us that the motor vehicles tax is compensatory in nature. We need not labour on the point because this has come to be concluded by the ruling of the Supreme Court (Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan). In paragraph 22 of the judgment at page 1426 it is held as following :--
"(22) We have, therefore, come to the conclusion that the Act does not violate the provisions of Art. 301 of the Constitution and the taxes imposed under the Act are compensatory taxes which do not hinder the freedom of trade, commerce and intercourse assured by that article."
15. This ruling came to be rendered in connection with Rajasthan Motor Vehicles Taxation Act, 1951. However, this is settled law as on to-day. The taw relating to the motor vehicles was governed originally under Act No. 4 of 1939. A reading of S.2 will clearly disclose that there are various kinds of motor vehicles contemplated under that definition section itself. S.2(3) speaks of "contract carriage"; S.2(8) "goods vehicle"; 2(9) "heavy goods vehicle"; 2(9A) "heavy passenger motor vehicle"; 14 "medium goods vehicle" and lastly "omnibuses" under S.2(18A). We will quote the definition of "omnibus" for the purpose of this case. It reads :
"2(18) "Omnibus" means any motor vehicle constructed or adapted to carry more than six persons excluding the driver;"
Therefore, one thing is clear that the Act itself makes distinction in to various categories of mechanically propelled vehicles rather with compendious term as motor vehicles. The same distinction is maintained by the Act of 1988 because S. 2(2) talks of "articulated vehicle"; S. 2(7) "contract carriage"; S.2(11) "educational institution bus"; S. 2(14) "goods carriage"; S.2(16) "heavy goods vehicle"; S. 2(17) "heavy passenger motor vehicle" etc. Then sub-section (29) of Section 2 defines "omnibus". A reading of S. 2(18A) of the Act and Section 2(29) of the Act of 1988 would clearly show that definition of the "omnibus" is reproduced verbatim. Certainly, it cannot be gain-said the definition talks of a motor vehicle constructed or adapted to carry more than six passengers. In other words, the stress is on the seating capacity.
16. While we are at this, it is also necessary on our part to refer to S. 2(33) of the Act of 1988 wherein "private service vehicle" is defined. It reads :
"(33) "private service vehicle" means a motor vehicle constructed or adapted to carry more than six persons excluding the driver and ordinarily used by or on behalf of the owner of such vehicle for the purpose of carrying persons for, or in connection with, his trade or business otherwise than for hire or reward but does not inlcude a motor vehicle used for public purposes;"
17. We may at once point out that the corresponding provision under Act No. 4 of 1939 is S. 2(22). However, the difference in the language need not detain us nor the purpose thereof. With this back ground, we go to the Taxation Act. Section 3 is the charging section. That reads :
"3. Levy of tax.-- (1) A tax at the rates specified in Part-A of the Schedule shall be levied on all motor vehicles suitable for use on roads."
xx xx xx xx xx xx xx
18. One thing that requires to be carefully observed is, nowhere in the charging section any basis is indicated nor again does it say that it shall be as per the prescription which is more often not found in the charging section. Therefore, we take it, it has left to the discretion of the Executive. By a reading of this, one has to refer to the rates specified in Part-A of the Schedule. It is one thing to say that the rates have been prescribed. It is another thing to say that the basis of the, taxation has been prescribed. As to what exactly was the position before and after the amendment, we will do well if we bring out a comparative table.
Comparative table of columns 8 and 9 of the Schedule Part-A of the Karnataka Motor Vehicles Taxation Act, before and after the Motor Vehicles Taxation (Amendment) Act, 1989.
(See table on next page)
19. No doubt, originally the unit of taxation was based on seating capacity in relation to omnibuses as well as private service vehicles. But the short question is, whether the State is bound to adopt the same unit for all the time. It has already been seen that the Motor Vehicles Taxation Act itself has classified the mechanically propelled vehicles into various categories. Therefore, it is open to the State to adopt different basis of Taxation for different categories of vehicles. On that score, it cannot be said that it constituted discrimination because, as was rightly mentioned by the learned Advocate Columns 8 and 9 of the Schedule Part-I before 1-4-1989.
Columns 8 and 9 of the Schedule Part-A after 1-4-1989.
(1) (2)8. Omnibuses.
8. Omnibuses.
(a) permitted to carry not more than ten persons (excluding the driver) for every person which the vehicle is permitted to carry.
80-00
(a) Having a floor area not exceeding 8 square meters, for every square meter 55-00 200-00
(b) Permitted to carry eleven persons or more (excluding the driver) for every person which the vehicle is permitted to carry 250-00
(b) Having a floor area exceeding 8 square meters but not exceeding 12 sq. meters for every square meter 70-00 250-00
(c) (i) owned by schools and exclusively used for conveyance, of school children and staff of such school, for every person which the vehicle is permitted to carry excluding the driver 5-00
(c) Having a floor area exceeding 12 square meters for every square meter 80-00 300-00(d) (i) Owned by schools and exclusively used for conveyance of school children and staff of such school, for every square meter 5-00 10-00
(ii) Omni-buses owned by other educational institutions and exclusively used for conveyance of students and staff of such institutions for every person which the vehicle is permitted to carry excluding the driver 20-00
(ii) Owned by other educational Institutions and exclusively used for conveyance of students and staff of such institutions for every square meter 10-00 30-00
9. Private service vehicle.
9. Private service vehicles.
For every person which the vehicle is permitted to carry 120-00 (a) Having a floor area not exceeding 8 square meters, for every square meter 55-00 200/- (b) Having a floor area exceeding 8 square meters but not exceeding 12 square meters, for every square meter 70-00 250/- (c) Having a floor area exceeding 12 square meters, for every square meter 80-00 300/- (d) (i) Owned by schools and
exclusively used for conveyance of school children and staff of such school, for every square 5 10/-
(ii) Owned by other educational institutions and exclusively used for conveyance of students and staff of such institutions for every square meter 10-00 30/-
General, with reference to the goods vehicle, the unit of taxation is laden weight, in the case of motor cars unladen weight, in the case of motor-cycles and scooters, cubic capacity. It cannot be contended therefore as urged by Sri Rangaswamy that the object of tax being compensatory in nature, same basis or the unit of taxation must be adopted.
20. It is a well settled law that in matters of taxation, the legislature has wide discretion to choose the objects of taxation. Equally it is well settled that in order to tax something, the State need not tax everything. Where therefore the State has adopted a different basis viz., the floor area for omnibuses and private service vehicles, we find it difficult to accept the contention urged on behalf of the petitioner that it would constituie discrimination. May be, the motor vehicles constitute genesis. But, even if one method of taxation is adopted, that by-itself does not bring about discrimination. In this case, what is the object sought to be achieved? The statement of objecls and reasons accompanying the Motor Vehicles Taxation (Amendment) Act, 1989 reads as follows:--
"To give effect to the proposals made in the budget speech for the year 1989-90, it is proposed to amend the Karnataka Motor Vehicles Taxation Act, 1957. An opportunity is also taken to rationalise certain provisions of the Act. Hence, this Bill."
This takes us to the Budget speech of the then Chief Minister of Karnataka where it is stated as under:--
"I. Motor Vehicles Tax.
70. I propose to amend the Karnataka Motor Vehicles Taxation Act, 1957, so as to --
(a) plug the loopholes in the leakage of revenue by misusing the vehicles registered for one purpose and using for some other purpose, by carrying excess passengers without payment of any tax,
(b) rationalise the rates of tax on two-wheelers, goods vehicles of other States, private service vehicles, cars owned by banks, boards and Corporations, co-operative societies and such other institutions, vehicles not being personally owned by individuals, multi-axle goods vehicles, hand-driven power tillers, tractors owned by agriculturists and tractors used solely for agricultural purposes.
(c) bring it in conformity with the Motor Vehicles Act, 1988 (Central Act No. 59/1988) which is likely to be brought into force shortly by the Government of India; there will be marginal increase of tax on certain vehicles and there will be reduction in the rates of tax on other vehicles. The additional revenue as a result of this will be Rs. 160 lakhs per annum. The details are at Annexe. IV."
(Annexe-IV is omitted as unnecessary).
21. The State in order to plug loopholes in the leakage of revenue by misusing the vehicles registered for one purpose and using the same for some other purpose, by carrying excess passengers without payment of any tax, has thought it fit to this floor area. If there is misuse or abuse of the same, by carrying more passengers, certainly the revenue of the State goes down. Therefore, irrespective of the number of the seats or, in other words, irrespective of the seating capacity, if the floor area of the vehicle is adopted, we think there is great reasonable justice in the adoption of such a principle viz., to avoid leakage of revenue. This has rational basis which has nexus to the object sought to be achieved viz., to plug loopholes in the leakage of revenue and to avoid misuse of the vehicle.
22. The omnibuses, according to the learned Advocate General, could be misused by either carrying excess passengers or using it as stage carriage. Therefore, either way if the State were to lose and, in order to plug loopholes in the leakage of revenue, if the State adopts a different method of taxation, we cannot but hold that this is a wholesome policy. In the light of what we have observed, we will refer to the decision cited in this behalf by the learned counsel for the petitioner. is a case which related to medicinal preparation and where though they belonged to general category of medicinal preparations, a higher taxation was levied concerning the two preparations depending on alcohol contents. It was held to be discriminatory. But here that is not the case.
23. is a case where different grazing rates were levied for cattle --one for the cattle of Madhya Pradesh and the other for the foreign cattle. It was held to be discriminatory and violativc of Art. 14 of the Constitution. But here that is not so.
24. Nor again does advance the case of the petitioner. That was a case where minimum rate of land revenue was adopted for dry lands, with reference to the quality and fertility. Therefore, that was again held to be arbitrary.
25. The ruling in the case of Malwa Bus Service as contemplated in paragraph 21, we think, would squarely apply to the case on hand. Therefore, we extract that paragraph in full.
"21. The next submission urged on behalf of the petitioners is,based on Article 14 of the Constitution. It is contended by the petitioners that the Act by levying Rs. 35,000/- as the annual tax on a motor vehicle used as stage carriage but only Rs. 1,500/ - per year on a motor vehicle used as a goods carrier suffers from the vice of hostile discrimination and is therefore liable to be struck down. There is no dispute that even a fiscal legislation is subject to Article 14 of the Constitution. But, it is well settled that a legislature in order to tax some need not tax all. It can adopt a reasonable classification of persons and things in imposing tax liabilities. A law of taxation cannot be termed as being discriminatory because different rates of taxation are prescribed in respect of different items, provided it is possible to hold that the said items belong to distinct and separate groups and that there is a reasonable nexus between the classification and the object to be achieved by the imposition of different rates of taxation. The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidity. As observed by this Court in Khandige Sham Bhat v. Agricultural Income-tax Officer, AIR 1963 SC 591. In respect of taxation laws, the power of legislature to classify goods, things or persons arc necessarily wide and flexible so as to enable it to adjust its system of taxation in all proper and reasonable ways. The Courts lean more readily in favour of upholding the constitutionality of a taxing law in view of the complexities involved in the social and economic life of the community. It is one of the duties of a modern legislature to utilise the measures of taxation introduced by it for the purpose of achieving maximum social good and one has to trust the widom ot the legislature in this regard. Unless the fiscal law in question is manifestly discriminatory the Court should refrain from striking it down on the ground of discrimination. These are some of the broad principles laid down by this Court in several of its decisions and it is unnecessary to burden this judgment with citations. Applying these principles it is seen that stage carriages which travel on an average about 260 kilometres every day on a specified route or routes with an almost assured quantum of traffic which invariably is overcrowded belong to a class distinct and separate from public carriers which carry goods on undefined routes. Moreover, the public carriers may not be operating every day in the State. There are also other economic considerations which distinguish stage carriages and public carriers from each other. The amount of wear and tear caused to the roads by any class of motor vehicles may not always be a determining factor in classifying motor vehicles for purposes of taxation. The reasons given by this Court in G. K. Krishnan case, for upholding the classification made between stage carriages and contract carriages both of which are engaged in carrying passengers are not relevant to the case of a classification made between stage carriages which carry passengers and public carriers which transport goods. The petitioners have not placed before the Court sufficient material to hold that the impugned levy suffers from the vice of discrimination on the above ground."
26. From the reading of the above, it is clear where a stage carriage was subject to tax of Rs. 35,000/- in contradistinction to Rs. 1,500/- levied on goods carrier, it was held that there was no discrimination. Same is the position here. Then again in in relation to different rates of surcharge, the validity came to be upheld in the following manner:--
"There is no ground whatever for holding that sub-sec. (3) of S. 5 of the Act is arbitrary or irrational or that it treats 'unequals as equals' or that it imposes a disproportionate burden on a certain class of dealers. It must be remembered that sub-sec. (1)ot S. 5 of the Act provides for the levy of a surcharge having a gross turnover of Rs. 5 lakhs or more in a year at a uniform rate of 10 per centum of the tax payable by them, irrespective of whether they are dealers in essential commodities or not. A surcharge in its true nature and character is nothing but a higher rate of tax to raise revenue for general purposes. The levy of surcharge under seb-sec. (1) of S. 5 of the Act falls uniformly on a certain class of dealers depending upon their capacity to bear the additional burden.
It is not the function of the Court to consider the propriety or justness of the tax, or enter upon the realm of legislative policy. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied. The equality clause in Art. 14 does not take from the State a power to classify a class of persons who must bear the heavier burden of tax. The classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it result sin some inequities, (paras 79, 84)."
This again supports the stand of the State. Likewise, in a Division Bench of this Court held where the vehicles owned by the industrial undertaking were subjected to higher taxation, that again was held not discriminatory. The reasoning is that the vehicles owned by the industrial undertaking which forms separate and distinct class cannot be compared with other vehicles. Therefore, this is in accordance with what we have stated above viz., the legislature has a wide choice in choosing the objects of taxation. Accordingly, we conclude with the answer to the point that by adoption of the floor-area for omnibuses and private service vehicles, there arises no discrimination whatever.
27. Turning to the second point viz., whether an omnibus owned by the owner of a driving school is an educational institution bus. 'Educational institution bus' is defined under Sec. 2(11) of the Motor Vehicles Act, 1988. It reads:
"(11) "educational institution bus" means an omnibus, which is owned by a college, school or other educational institution and used solely for the purpose of transporting students or staff of the educational institution in connection with any of its activities;"
So, it is such a bus as could be called an educational institution bus. From the table set out, we find clause 9(d)(ii) which is pressed into service, in the context in which it appears, cannot be extended to a case of commercial venture like that of the petitioner. No doubt, he may teach learning in driving, but what is required, on a careful reading of that clause, is that it must be exclusively used for the conveyance of the students and the staff of such institution. It is not the question of conveyance that is involved here. It is only for the purpose of imparting knowledge. Therefore, it appears, the object is to subject the vehicles of the educational institution to a lower taxation. Certainly, the petitioner which is a commercial venture cannot claim such a benefit on the sole ground that he is imparting education in driving. From this point of view, we do not see how mere establishment and running a driving school would be helpful to the petitioner when the Act and Rules 24 to 32 read R. 30 of the Karnataka Motor Vehicles Rules lay down stringent provisions. These provisions including R. 24(3) cannot affect the power of taxation. Therefore, here again we are unable to accept the argument of the petitioner that his omnibus must be taxed subject to item 9 cl. d(ii). Further, there has not been any high increase in the taxation as contended by the petitioner as seen from the following:--
Sl. No. Make Wheel base.
Seating capacity as recommended by the Manufacturer.
Floor area in sq. mts.
Total tax on vehicle per quarter calculated on Percentage of diff. between the two rates.
seating capacity basis.
Floor area basis.
1.
2.
3.
4.
5.
6.
7.
8.
1.
Standard 20 mini bus 2250 11+1 4.46 2750 2453 10.8
2. Matador F 307 2400 mm wheel base.
24008+1 5.89 640 3239.50 406.17
3. Standard 20 Micro.
225015+1 6.77 3750 3723.50 0.70
4. Mahindra 2600 14+1 7.41 3500 4075.50 16.44
5. Alwyn Nissan Cabster.
250015+1 7.24 3750 3982 6.18
6. Matador F 307 WB 3380 mm 3380 15+1 7.69 3750 4229.50 12.78
7. Swaraj Mazda T 3500 2550 18+1 8.23 4500 4526.50 0.58
8. Tata 407 3200 20+1 8.55 5000 4702.50 5.95
9. D.C.M. Toyota 3290 16+1 11.75 4000 7050.50 76.20
10. Mitusbishi Canter.
376033+1 12.80 8250 7680 6.90
11. Tata 909 3600 30+1 12.92 7500 7752 3.36
12. Leyland.
--
57+1 21.54 14250 15078 5.81
13. Tata 5650 mm wheel base 5650 62+1 23.74 15500 16618 7.21
28. In the result, we dismiss these writ petitions. However, there shall be no order as to costs. The petitioners arc granted time till 30-9-1990 to clear off the arrears in two instalments.
29. Petition dismissed.