M/s.Nirmala Transport, a partnership firm rep.by its V. The Transport Commissioner, Andhra Pradesh

WP/21643/2010

AI Insights

The case revolves around the challenge to the third proviso to sub-section (2) of Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963, which was amended to levy a life tax on CEVs. The petitioners argued that this tax was unconstitutional and that CEVs should not be classified as motor vehicles. The state defended the amendment, emphasizing the regulatory and compensatory nature of the tax. The court examined various legal precedents and statutory provisions, ultimately concluding that the tax is constitutional and that CEVs are motor vehicles as defined under the relevant laws.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 697008 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 28-09-2011
• Assessment Year: misc
• Other Referred Cases: Narsing v State of Andhra Pradesh, A.Aruna v State of Andhra Pradesh, Jagannath Area v State of Orissa, Automobile Transport Ltd v State of Rajasthan, M/s.Vijaya Traders v CTO, State of T.N. v M.Krishnappan, International Tourist Corp. v State of Haryana, Biju Joseph v State of Kerala, State of Gujarat v Akhil Gujarat Pravasi V.S. Mahamandal
• Laws Referred To: Andhra Pradesh Motor Vehicles Taxation Act, 1963, Motor Vehicles Act, 1988, Central Motor Vehicles Rules, 1989
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: THE ADVOCATE GENERAL FOR A P
• Assessee Lawyers: B SIVA RAMA KRISHNAIAH; CH RAVINDER; UNNAM RAO; P SRIRAM
• Keywords: Constitutional Violation; Construction Equipment Vehicles; Legislative Competence; Life Tax; Motor Vehicles Taxation
• Section: 3(1); 3(2); 2(28); 2(j); 2(ca)

Judgement Text

"*THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION No.173 of 2010 and batch % 28.09.2011 Between: Khader Basha And others …Petitioners and The Regional Transport Officer, Chittoor And others …Respondents ! Counsel for the Petitioners: M/s.B.Siva Rama Krishnaiah, Ch.Ravinder, Unnam Muralidhar Rao, P.Sri Raghu Ram ^Counsel for the Respondents: The Advocate General for A.P. Head Note: ? Citations: 1) W.P.No.3114 of 1987 and batch, dated 27.9.1988 2) 2002(6) ALD 548 (DB) : 2003(2) ALT 770 (DB) 3) (2005) 4 SCC 214 : AIR 2005 SC 3020 4) (1983) 4 SCC 166 : AIR 1983 SC 937 5) (2007) 7 SCC 527 : AIR 2007 SC 2990 6) AIR 1962 SC 1044 7) AIR 1966 SC 1780 8) AIR 1990 SC 1927 9) W.P.No.12455 of 2005 and batch, dated 22.6.2011 10) (2005) 4 SCC 53 11) AIR 1961 SC 232 12) AIR 1962 SC 1406 13) (1988) 1 SCC 401 14) (1999) 9 SCC 700 15) (2003) 8 SCC 60 16) (2003) 9 SCC 92 17) (2004) 5 SCC 209 18) (2004) 11 SCC 26 19) (2005) 2 SCC 515 20) (2006) 7 SCC 241 : (2006) 145 STC 544 21) (2009) 7 SCC 339. 22) (2006) 7 SCC 241 : (2006) 145 STC 544 23) (1996) 10 SCC 676 24) AIR 1999 SC 635 25) AIR 1992 SC 1383 26) (1985) 1 SCC 591 : AIR 1985 SC 582 27) (2004) 11 SCC 641 : AIR 2004 SC 4219 28) (2007) 5 SCC 447 : AIR 2007 SC 1984 29) AIR 1968 SC 59 : (1967) 66 ITR 664 (SC) 30) (1994) 3 SCC 1 = AIR 1994 SC 1918 31) (1994) 6 SCC 651 : AIR 1994 SC 11 32) (2001) 2 SCC 386 : AIR 2000 SC 3689 33) (1996) 3 SCC 709 : AIR 1996 SC 1627 (Para 43) 34) (1993) Suppl. 1 SCC 96 : AIR1992SC522 35) (1983) 1 SCC 305 : AIR 1983 SC 130 Para 10 36) AIR 1954 SC 728 37) (1969) 2 SCC 248 : AIR 1970 SC 129 38) (2005) 8 SCC 534 39) (1974) 4 SCC 3 : AIR 1974 SC 555 40) (1978) 1 SCC 248 : AIR 1978 SC 597 41) (1983) 2 SCC 277 = AIR 1983 SC 473 42) (1947) 2 All ER 680 (CA) 43) (1997) 7 SCC 209 (paras 66 and 67) 44) AIR 1952 SC 196 45) (1996) 10 SCC 104 46) (1998) 8 SCC 227 47) AIR 1991 SC 735 48) (1974) 4 SCC 428 : AIR 1974 SC 497 49) (1983) 3 SCC 237 : AIR 1983 SC 634 50) (2005) 4 SCC 64 : AIR 2005 SC 2178 51) AIR 1963 SC 591 : (1963) 48 ITR 21 (SC) 52) (1980) 3 SCC 619 : AIR 1980 SC 1547 53) (1987) 3 SCC 655 : AIR 1987 SC 1911 54) (2004) 5 SCC 155) : AIR 2004 SC 3894 55) (1974) 2 SCC 777 : AIR 1975 SC 17 56) (1980) 1 SCC 66 : AIR 1980 SC 148 (para 8) 57) AIR 1980 SC 1547 : (1980) 3 SCC 619 58) AIR 1981 SC 774 : (1981) 2 SCC 318 59) AIR 1987 SC 1911 : (1987) 3 SCC 655 60) AIR 1992 SC 1371 61) AIR 1999 SC 2970 : (1999) 7 SCC 400 62) (1998) 6 KTR 2 (Ker) 63) (2001) 3 SCC 157 64) AIR 2004 SC 3894 : (2004) 5 SCC 155 65) (2003) 1 SCC 433 (Para 13) 66) (1975) 1 SCC 421 : AIR 1975 SC 1331 67) (1985) 1 SCC 641 : AIR 1986 SC 515 68) (2000) 3 SCC 40 : AIR 2000 SC 1069 69) (2009) 15 SCC 570 : AIR 2009 SC 3194 70) (1881) 6 QBD 376 71) AIR 1961 SC 751 72) (1975) 1 SCC 421 : AIR 1975 SC 1331 73) (1981) 2 SCC 205 : AIR 1981 SC 711 74) (1988) 2 SCC 351 : AIR 1988 SC 876 75) (2004) 3 SCC 297 : AIR 2004 SC 1531 76) (2011) 3 SCC 1 77) (2005) 8 SCC 104 78) (1970) 2 SCC 820 : AIR 1971 SC 454 79) (2007) 4 SCC 685 : AIR 2007 SC 2320 80) (1886) 31 Ch D 607 : 55 LJ Ch 488 (CA) 81) AIR 1931 PC 149 82) (1881) 8 QBD 63 : (1881-5) All ER Rep 1002 : 51 LJ QB 1 (CA) 83) (1979) 2 SCC 529 84) (1998) 2 SCC 467 85) 1992 Supp (3) SCC 141 86) (2001) 2 GLR 1189 87) (2004) 6 SCC 210 THE HON'BLE SRI JffffUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN September 28, 2011 Writ Petition Nos.173, 4537, 5468, 5631, 5718, 5730, 5757, 5829, 5860, 5875, 5913, 5977, 5984, 6057, 6082, 6094, 6163, 6214, 6232, 6251, 6259, 6264, 6270, 6272, 6282, 6290, 6338, 6366, 6378, 6405, 6426, 6438, 6439, 6535, 6546, 6575, 6593, 6715, 6725, 6731, 6739, 6752, 6754, 6778, 6780, 6784, 6800, 6810, 6828, 6845, 6848, 6857, 6874, 6886, 6887, 6906, 6918, 6919, 6947, 6977, 7005, 7013, 7021, 7041, 7070, 7078, 7088, 7091, 7094, 7098, 7099, 7113, 7121, 7122, 7134, 7136, 7138, 7148, 7171, 7183, 7187, 7194, 7199, 7209, 7221, 7222, 7223, 7231, 7235, 7238, 7239, 7240, 7241, 7244, 7314, 7315, 7327, 7328, 7331, 7336, 7342, 7346, 7351, 7353, 7365, 7369, 7371, 7374, 7384, 7386, 7393, 7400, 7404, 7406, 7414, 7417, 7421, 7427, 7438, 7442, 7443, 7445, 7459, 7460, 7467, 7475, 7483, 7484, 7501, 7507, 7519, 7542, 7543, 7544, 7550, 7559, 7562, 7578, 7582, 7595, 7633, 7635, 7638, 7642, 7643, 7645, 7646, 7648, 7649, 7651, 7671, 7676, 7682, 7709, 7713, 7715, 7721, 7725, 7732, 7755, 7775, 7808, 7812, 7829, 7856, 7866, 7875, 7892, 7897, 7929, 7931, 7959, 7981, 8036, 8059, 8061, 8094, 8125, 8136, 8166, 8192, 8193, 8236, 8253, 8294, 8304, 8307, 8312, 8315, 8316, 8354, 8358, 8374, 8378, 8379, 8421, 8425, 8427, 8428, 8434, 8481, 8504, 8590, 8642, 8735, 8737, 8738, 8745, 8756, 8787, 8792, 8803, 8809, 8853, 8870, 8893, 8895, 8918, 8928, 8930, 8976, 8993, 8996, 9027, 9087, 9126, 9147, 9171, 9177, 9181, 9182, 9221, 9252, 9268, 9271, 9272, 9275, 9292, 9300, 9313, 9322, 9330, 9331, 9334, 9376, 9394, 9396, 9455, 9493, 9537, 9541, 9544, 9545, 9550, 9579, 9582, 9605, 9609, 9620, 9736, 9755, 9776, 9800, 9810, 9812, 9813, 9815, 9842, 9868, 9905, 9920, 9989, 10001, 10014, 10034, 10039, 10049, 10055, 10056, 10089, 10091, 10155, 10205, 10216, 10243, 10253, 10273, 10277, 10286, 10311, 10312, 10327, 10331, 10334, 10346, 10373, 10374, 10415, 10418, 10435, 10523, 10540, 10547, 10554, 10561, 10634, 10636, 10671, 10675, 10699, 10719, 10724, 10736, 10788, 10853, 10859, 10868, 10915, 11005, 11121, 11138, 11147, 11151, 11192, 11269, 11304, 11366, 11452, 11517, 11541, 11568, 11779, 11955, 12113, 12151, 12188, 12263, 12268, 12274, 12672, 12992, 13009, 13139, 13978, 14011, 14078, 14382, 14466, 14546, 14713, 14882, 14883, 15046, 15078, 15434, 15478, 15484, 15650, 15988, 16091, 16142, 16250, 16285, 16312, 16442, 16603, 16758, 16772, 16775, 17753, 17890, 17892, 17986, 18089, 18196, 18800, 18823, 19532, 19719, 19833, 19837, 19844, 19893, 19894, 19986, 20072, 20095, 20252, 20309, 20403, 20738, 20863, 20888, 20896, 20899, 20913, 21164, 21177, 21442, 21463, 21480, 21643, 21737, 21769, 21927, 22045, 22076, 22160, 22161, 22394, 23886, 24148, 24481, 24503, 24513, 24551, 24565, 24570, 24880, 25274, 25399, 25567, 25747, 25822, 26082, 26100, 26118, 26194, 26317, 26355, 26596, 26597, 26614, 26626, 26651, 26655, 26753, 26754, 26775, 26946, 27061, 27223, 28276, 28282, 28680, 28704, 28705, 28707, 28712, 28713, 28717, 28735, 28809, 28923, 29423, 32015, 32033, 32275, 32276, 32351, 32352, 32542, 33127, 33411, 33509 of 2010; 50, 83, 133, 330, 346, 347, 353, 364, 1113, 1130, 1437, 1527, 1690, 1901, 1939, 2527, 2950, 3257, 3280, 3512, 4818, 4823, 4852, 4913, 5330, 5339, 5522, 5629, 8661, 8848, 9152, 9883, 9907, 9908, 9909, 10230, 10402, 10405, 10678, 10782, 10957, 11266, 11332, 11398, 11664, 11812, 11824, 11826, 12644, 12730, 12985, 12987, 12991, 14154, 14163 and 14339 of 2011. Between: Khader Basha And others …Petitioners and The Regional Transport Officer, Chittoor And others …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.173 of 2010 and batch COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) Introduction In this batch of cases the third proviso to sub-section (2) of Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (hereafter, the Taxation Act, for brevity) is assailed as ultra vires the enacting provision and the Constitution of India. The impugned proviso was substituted initially by the Andhra Pradesh Motor Vehicles Taxation (Amendment) Ordinance, 2010 (the A.P. Ordinance No.2 of 2010) promulgated on 02.2.2010. It was replaced by the A.P. Ordinance No.5 of 2010 which was subsequently enacted as the Andhra Pradesh Motor Vehicles Taxation (Amendment) Act, 2010 (the A.P. Act 11 of 2010) (hereafter referred to as, the Amendment Act). By reason of the amendment, the Fourth Schedule was also inserted enabling the Government to levy life time tax (hereafter, life tax) on the Construction Equipment Vehicles (CEVs) including road rollers at the rates specified in that Schedule. The petitioners essentially contend that the levy of life tax on CEVs is unconstitutional. Alternatively they would also contend that construction equipment vehicles they own cannot be considered as “motor vehicles”. Case of the petitioners The adjudication of questions of law does not require a detailed reference to the factual background in each case. But taking W.P. No.133 of 2011, we may notice the case of the petitioners and the perceived detriment they might suffer by the impugned legislation. The petitioner is a company engaged in the business of hiring of cranes to various public and private companies especially to Oil & Natural Gas Corporation (ONGC) in the State of Andhra Pradesh for shifting, loading and unloading of materials. They purchased cranes from Joomlion International Trading (HK) Co. Ltd., East Hong Kong. They were brought to the State of Maharashtra where they were temporarily registered. After entering into the contract with ONGC, for supplying/hiring cranes for a period of three years, they wanted to bring the cranes from Maharashtra to Rajahmundry. At that time the impugned legislation came into force requiring the petitioner to pay tax as per the Fourth Schedule to the Taxation Act aggrieved by which the writ petition is filed. The petitioner would contend that the handling/shifting equipment, colloquially known as cranes, are mounted on a motor vehicle which are either Light Motor Vehicles (LMVs) or Heavy Motor Vehicles (HMVs). The equipment itself does not come within the meaning of ”motor vehicle” as defined under Section 2(28) of the Motor Vehicles Act, 1988 (hereafter, the MV Act) read with Section 2(j) of the Taxation Act. As the equipment is not capable of being transported on the roads, the same is shifted to the work site on LMV/HMV which may be liable for registration under the MV Act. The levy of tax on the cranes, therefore, does not come under Entry 57 of the State List which enables the State Legislature to enact any law including the law of taxation of motor vehicles if they are suitable for use on roads. The cranes as such are not adapted for use on the public roads and, therefore, the impugned proviso is beyond the competence of the State. The petitioner further contends that the equipment used for handling, lifting, loading and/or unloading is not CEV under Rule 2 (ca) of the Central Motor Vehicle Rules, 1989 (hereafter, the Central Rules). Section 2(28) of the MV Act has not been amended to include CEVs and, therefore, no tax can be levied on cranes under the Taxation Act. Further, the vehicles are already registered in the State of Maharashtra. They are brought to Andhra Pradesh. After completion of work, they move out of the State. If again the vehicle enters Andhra Pradesh, the petitioner is made liable to pay the tax under the Fourth Schedule which is arbitrary, illegal and unreasonable violating Article 14 of the Constitution of India. The vehicles carrying the cranes rarely move on the roads and, therefore, they cannot be treated as motor vehicles “used or kept for use in a public place”, to attract the charge under Section 3(1) of the Taxation Act. Case of the State The State and Transport Commissioner have filed common counters in W.P. No.4537 of 2010 as well as separate counters wherever necessary in view of the peculiar facts in those cases and projecting the following defence. The CEVs are motor vehicles as defined under Section 2(28) of the MV Act and Rule 2(ca) of the Central Rules. If the machine is a chain driven vehicle then only would it not fall within the scope of the definition of a ‘motor vehicle’. Before the issue of Ordinance, quarterly tax was being collected as per item-8 of G.O.Ms.No.68, Tr (R&B) Department, dated 13.4.2006 issued under Section 3(2) of the Taxation Act. After the amendment, CEVs were brought under the category of life tax in the Fourth Schedule. As long as a CEV is adapted, designed and manufactured for use on the road, it is liable to pay the tax. All the categories of CEVs which are subject matter of the writ petitions are motor vehicles. It is irrelevant even if the construction machinery is mounted on a motor vehicle for the purpose of shifting it from one place to another because it is either a rubber tyred or a pneumatic tyred vehicle adapted for use on the roads. All the CEVs are pneumatic tyred, rubber padded or steel drum wheel mounted with “on or off” or “on and off” highway capabilities. The petitioners’ vehicles are fitted with pneumatic or non-pneumatic wheels and are capable of using the road. In fact all of them are using the roads in the process of laying or repairing the road. The CEVs are registered as non-transport vehicles as prescribed in the Central Rules and are taxed based on the unladden weight. Hitherto tax was collected on quarterly basis. When the tax was not paid within time, penalty ranging from 50% to 200% of the applicable quarterly tax was being levied. Representations were received for collection of life tax to save the owners from frequent payment of quarterly tax and penalty in the event of default, as well as seizure of the vehicle resulting in loss of business during the period of detention. The Government, therefore, decided to amend the third proviso to Section 3(2) of the Taxation Act. The collection of one time tax/life tax is administratively convenient; it is beneficial to the users of the vehicles who do not have to go to the office of the Road Transport Officer every three months to pay quarterly tax, and also do not require to pay taxes at the increased rates from time to time. With the introduction of life tax the entire future projection, spread over the economic life of the vehicle, is taken into account along with other factors like fall in the value of the rupee, inflation, rising costs of the material, cross-subsidy etc. All these have nexus with the use of the road over a period of time and, therefore, imposition of tax does not violate Articles 14 and 301 of the Constitution nor is it arbitrary, discriminatory or unreasonable. If any motor vehicle is removed to any other State on transfer of ownership, or change of address, the owner is entitled to claim refund as per the notification issued vide G.O.Ms.No.411, dated 28.4.1987. The road tax levied on motor vehicles is compensatory in nature. The State is spending considerable amount for laying new roads, extending existing roads, maintaining and modernizing the road network and infrastructure. During 2008-09 and 2009-10 the State allocated about Rs.3,009.00 crores and Rs.3,616.00 crores respectively as against the collection of taxes in a sum of Rs.1,476.00 crores and Rs.1,579.00 crores respectively. During the current year, it is proposed to spend Rs.3,517.00 crores as against the projected collection of taxes of Rs.2,230.00 crores. The levy of road tax on the motor vehicles comes under Entry 57 of List-II under which the State has right to make its own legislation to compensate for the losses, benefits and facilities provided by it. The plea that CEVs use the roads for a negligible extent is irrelevant. Under Entry 57 tax is leviable by the State Legislatures on all vehicles “suitable for use on roads” which are kept in the State. The words ‘suitable for use’ signify the kind of vehicles meaning thereby that the vehicles should be of such a type which are normally capable of running on the road. The entry does not indicate in any manner that tax would be leviable only for the period when the vehicle is actually using the road, and not otherwise. The tax has no correlation with the actual period of use of the road. Whether the CEVs use the road or not, the State has to maintain the roads and keep them in proper condition and, therefore, the actual use or non-use of public roads cannot be a ground for escaping liability. The Andhra Pradesh Motor Vehicles Taxation Act, 1963 The enacting history may be necessary for appreciating the controversy in these cases. The motor vehicles were taxed under the Madras Motor Vehicles Taxation Act, 1931 which extended to the entire composite State of Madras including the Andhra Area in the State of Andhra Pradesh. Under the Madras Motor Vehicles Taxation on Passengers and Goods Act, 1952, tax was levied on passengers, luggage and goods carried by stage carriers as well as goods transported by public carrier vehicles. It was also applied to the Andhra Area. The State of Hyderabad enacted the Hyderabad Motor Vehicles Taxation Act, 1955. Consequent on the creation of the State of Andhra Pradesh, so as to consolidate these enactments, the State Legislature enacted the Taxation Act. Under Section 3(1) of the Taxation Act (charging Section), all motor vehicles are taxed at the rates and for the periods specified in the First Schedule read with Section 3(2) of the Taxation Act. Section 4(4) is an exception to Section 3(1) of the Taxation Act which enabled the issue of temporary licence for a period not exceeding thirty days at a time on payment of tax at the rate specified in the Second Schedule. By A.P. Act 15 of 1987, the second proviso and the Third Schedule were introduced prescribing life tax for non-transport vehicles to be paid in lump sum at or about the time of registration of the motor vehicle. Broadly, the vehicles were categorized as two wheelers and four wheelers. The four wheelers were classified into three categories on the basis of unladden weight exceeding 2286 Kg. They are to be taxed at the rates in the First Schedule and not as per the rates in the Third Schedule. It may be noted that levy of life tax as per the Third Schedule was unsuccessfully challenged in Narsing v State of Andhra Pradesh[1]. The Third Schedule was amended by A.P. Act 11 of 1992 with effect from 15.4.1992, and life tax was prescribed for four wheelers on the basis of unladden weight. It is either lump sum or 5% of the value of the vehicle whichever is higher. In 1995, by the Amendment Act 23 of 1995, levy and collection of tax on four wheelers was enhanced from 5 to 7%. The challenge to the same was repelled by this Court in A.Aruna v State of Andhra Pradesh[2]. In 1997 and 2006, by A.P. Act 1 of 1997 and A.P. Act 33 of 2006, minor changes were made in the Second Schedule and the First Schedule respectively. The A.P. Act No.11 of 2010 A.P. Act 11 of 2010 substituted the existing second proviso to Section 3(2) of the Taxation Act by a new proviso, the effect of which is that, in the case of motor cycles, tax shall be levied at the rates specified in the Third Schedule. The existing fourth proviso was deleted and two provisos were substituted. The third proviso was also substituted and, as per the amended proviso, “in the case of construction equipment vehicles including road rollers the rate of tax shall be levied at the rates specified in the Fourth Schedule.” Section 12 of the Taxation Act which provided for appeal was amended by a new Section with which we are not concerned. The Fourth Schedule, which was amended, prescribed the rates of tax on CEVs depending upon their age. It is at the rate of 7.5% of the cost of the vehicle at the time of registration of the new vehicle. If the vehicle is already registered, and its age from the month of registration is less than three years, the rate of tax on CEVs is 6.5%, and if the age of the vehicle is more than three years and less than six years; and if the age of the vehicle is more than six years, the rate of tax shall be at 5% and 4% of the cost of the vehicle respectively. For ready reference, we quote Section 3 of the Taxation Act. 3. Levy of tax on motor vehicles: - (1) The Government may, by notification, from time to time, direct that a tax shall be levied on every motor vehicle used or kept for use, in a public place in the State. (2) The notification issued under sub-section (1) shall specify the class of motor vehicles on which, the rates for the periods at which, and the date from which, the tax shall be levied: Provided that the rates of tax shall not exceed the maximum specified in column (2) of the First Schedule in respect of the classes of motor vehicles fitted with pneumatic tyres specified in the corresponding entry in column (1) thereof; and one and a half times the said maximum in respect of such classes of motor vehicles as are fitted with non-pneumatic tyres: Provided further that in the case of motor cycles (with or without attachment), invalid carriages, the tax shall be levied at the rates specified in the Third Schedule. Provided also that in the case of Construction Equipment Vehicles including Road Rollers, the rate of tax shall be levied at the rates specified in the Fourth Schedule. Provided also that in the case of three or four wheeler motor vehicles including Motor Cars coming under non-transport category, omni buses upto a seating capacity of (10) ten persons in all, new Motor Cabs and the Motor Cabs of other States that are entering into the rolls of this State by way of change of address or transfer of ownership, the tax shall be levied at the rates specified in the Sixth Schedule. Provided also that Non-Transport Vehicles meant for carrying persons, owned by Companies/ Institutions/Societies/Organisations upto a seating capacity of (10) ten in all and second or more personalized vehicles upto a seating capacity of (10) in all owned by an individual, the tax shall be levied at the rates specified in the Seventh Schedule. Provided also that in respect of motor vehicles operated with battery / compressed natural gas / solar energy, no tax shall be levied for a period of five years from the date to be notified. On an analysis of the above provision, the following position would emerge. Section 3(1) of the Taxation Act is the charging Section empowering the Government by notification to levy tax on other motor vehicles “used or kept for use in a public place in the State of Andhra Pradesh”. The classification of the objects of tax, and the measure of tax, is taken care of by Section 3(2) and the Schedules. The power of the Government to issue notification directing the levy of tax is not an absolute power. As per Section 3(2) of the Taxation Act, the notification shall specify the “class of motor vehicles on which, the rates for the periods at which, and the date from which the tax shall be levied”. Thus the Legislature itself has taken care of (i) the class of motor vehicles; (ii) rates of tax; (iii) the periods at which tax shall be levied; (iv) the Schedule containing/prescribing the maximum rate of tax; and (v) the class of motor vehicles on which no tax shall be levied. It may also be mentioned that Section 4(1) mandates that the tax shall be paid in advance in the manner specified in Section 11 i.e., by a demand draft obtained from any scheduled bank to the value for which the payment is required to be made. Sub-section (4) thereof enables the Government to direct the issue of temporary licence for a period not exceeding 30 days on payment of tax not exceeding the maximum specified in the Second Schedule. For better understanding, Section 3(2) and its provisos are indicated in the following table. Sl. No. Proviso Schedule Class of motor vehicles Nature of tax Rate of tax 1 First First (1) Motor vehicles including motors, scooters and cycles not exceeding 406 Kg unladen weight; (2) Invalid carriages (3) Goods carriages (4) Motor vehicles plying for hire (5) Motor vehicles used for (6) Fire engines/ fire tenders/ r o a d water sprinklers (7) Omnibuses, and Other motor vehicles not described in the First Schedule Quarterly Depends on t h e laden weight/ number of persons carried other than the driver 2 Second Third Motor cycles/ tricycles/ motor scooters Life tax Life tax at the time of registration of new vehicle at 9% of the cost or progressively reduced rates depending on the age of the vehicle. 3 Third Fourth CEVs Life tax 7.5% of the c o s t of the vehicle at the time of levying or at reduced rates depending on the age of the vehicle 4 Fourth Sixth Three or four wheeler motor vehicles and motor cars coming under Non-transport c a t e g o r y , omni buses, new motor cabs and the motor cabs of other States entering into the rolls of the Andhra Pradesh by way of change of address Life tax 12% if the value is less than Rs.10.00 lakhs, and 14% if the value of the vehicle is more than Rs.10.00 lakhs. The rate of tax g e t s reduced depending on the age if the vehicle is already registered. 5 Fifth Seventh Non-transport vehicles owned by companies/ institutions/ societies/ organizations Life tax 14% of the cost of the vehicle or at reduced rates depending on the age if the vehicle is already registered. N.B. The Second Schedule describes the classes of motor vehicles fitted with pneumatic tyres and maximum rate of tax for a period not exceeding seven days or not exceeding thirty days. The rate of tax varies depending on the class of the vehicle and the laden weight if it is a goods vehicle. The Fifth Schedule contains the rates of additional tax called green tax under Section 3B of the Taxation Act. From the above table it is clear that, except in respect of the motor vehicles covered by the first proviso to Section 3(2) of the Taxation Act and the First Schedule, in respect of other motor vehicles covered by the second, third, fourth and fifth provisos, the Legislature specified life tax at the rates mentioned in the Schedules. Quarterly tax levied is only in respect of those classes of motor vehicles with pneumatic tyres mentioned in the First Schedule. Of course the levy of tax, for the issue of temporary licence under Section 4(4) of the Taxation Act either for a period of 7 days or for a period exceeding thirty days, is altogether on a different footing. We have ventured to explain the dynamics of Section 3 of the Taxation Act with its provisos in some detail because, in most of the writ petitions, all the petitioners obtained registration under the MV Act and/or were paying quarterly tax at the rates specified in the First Schedule read with the first proviso to Section 3(2) of the Taxation Act. The grievance is only with regard to the demand for payment of life tax as per the Fourth Schedule. Submissions & issues The submissions made by the Counsel are common to all the cases. Wherever additional submissions are made with reference to the peculiar facts of a particular case, we propose to notice them at the appropriate place. The summary of the contentions falling under two broad areas is as follows. I. (1) The CEV is not a motor vehicle within the meaning of Section 2(28) of the MV Act. It is a carrier for the construction equipment mounted on the vehicle. The competence of the State to enact the law under Entry 57 of the State List is only with regard to vehicles and not with regard to equipment carried by the vehicle. The suitability and adaptability for being used on the road should be with reference to the mobility as a locomotive, and not with reference to the object attached to it. The State, thus, has no legislative competence to enact the impugned third proviso to Section 3(2) of the Taxation Act and the Fourth Schedule. (2) The State Legislature can tax under Entry 57 of the State List only “motor vehicles” as defined in Section 2(28) of the MV Act. When CEV is not defined in the Taxation Act or the MV Act, the levy amounts to tax on the goods or machinery carried by the vehicles. This renders the impugned legislation incompetent especially when the vehicles owned by the petitioners are not adapted for use in a public place. The main function of the CEVs is “off highway” operation and, therefore, levy of tax is ultra vires. (3) The Taxation Act is regulatory and it levies compensatory tax. The State has failed to demonstrate the nexus between the use of the roads and the actual use to which the CEVs are put to. In the absence of any indication on quantifiable data and the benefit which is measurable, the levy of life tax on the CEVs is unsustainable. (4) The impugned amendment creates impediment on the inter- State and intra-State trade and commerce and impinges Article 301 of the Constitution. (5) The impugned amended proviso is inconsistent and repugnant to the enacting and charging provision and, therefore, it is unconstitutional. II. (1) The CEV is not defined in the MV Act. By reason of Section 2(j) of the Taxation Act, the definitions in the MV Act alone are to be adapted. As CEV is not defined under the MV Act, they do not fall within the definition of “motor vehicle” under Section 2(28) of the MV Act and hence the levy of tax on the CEV is illegal and violative of Article 265 of the Constitution. (2) The meaning of CEV as defined in Rule 2(ca) of the Central Rules cannot be imported into the Taxation Act. When the Taxation Act has not defined entities like CEVs without there being a definition either in the MV Act or the Taxation Act, collection of life tax is constitutionally impermissible. (3) The CEVs move from other States to Andhra Pradesh and vice versa. These have already suffered home State tax. When they are brought to Andhra Pradesh temporarily on a contract basis they are required to pay life tax at the rates specified in the Fourth Schedule. There is no mechanism in the Taxation Act for refund of the tax when the vehicle goes back to the home State. Therefore the levy under the impugned legislation is arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India. The Advocate General for the State made the following submissions. 1) The impugned proviso does not suffer from legislative incompetence. The levy of tax under Section 3(1) of the Taxation Act is on the motor vehicles and not on the goods carried by the motor vehicle. Even otherwise in view of legislative Entries 56 and 57, levy of tax on the CEVs is not beyond legislative competence. 2) Section 2(j) of the Taxation Act defines ‘motor vehicle’ by referring to the definition in Section 2(28) of the MV Act. The Rules made under the MV Act form part of the parent Act and as a necessary corollary the CEV as defined in Rule 2(ca) of the Central Rules also form part of Section 2(28) of the MV Act and Section 2(j) of the Taxation Act. 3) Unless a vehicle comes under the exclusionary part of Section 2(28) of the MV Act, it shall be deemed to be a motor vehicle. If a vehicle moves on pneumatic/non-pneumatic tyres, it has defined characters of being motor vehicle. The expression “suitable for use on roads” in Entry 57 of List-II must receive wide meaning. 4) The plenary legislation, for the purpose of Article 265 of the Constitution for levying tax on vehicles, is the Taxation Act. For classification of the objects of tax if the Rules are to be taken into consideration, the same does not violate Constitutional norms. 5) In view of third proviso and the Fourth Schedule, the CEV as defined in Rule 2(ca) of the Central Rules is exigible to tax under the Taxation Act, and all such vehicles are taken care of by Section 2(j) of the Taxation Act read with Section 2(28) of the MV Act. As all the petitioners have already registered their vehicles either as LMVs or HMVs, no prejudice would be caused to them if life tax is levied as authorized by the impugned proviso. 6) The reason and rationale for bringing CEV within the ambit of life tax is sustainable. As it is difficult for non-transport vehicles to regularly comply with payment of quarterly tax and obtain fitness certificate due to constant migration from place to place the legislature, in its wisdom, decided to levy life tax which does not violate any provision of the Constitution nor it is arbitrary. 7) Even before insertion of Rule 2(ca) of the Central Rules which defined CEVs the Supreme Court, in a number of cases construed and held that CEVs are motor vehicles as defined in Section 2(28) of the MV Act. Both sides have relied on various judgments of the Supreme Court as well as this Court, to which a reference is made at the appropriate place. The issues that arise for consideration in view of the rival submissions are considered point-wise one after the other under convenient broad headings. I. CONSTITUTIONAL VIRES (a) Legislative competence The Taxation Act, as amended by A.P. Act 11 of 2010 indisputably comes under Entry 57 of List-II of the VII Schedule. Such legislation, as is envisaged in Entry 35 of Concurrent List, is subject to the principles on which taxes on vehicles can be levied by the State, on all vehicles which are suitable for use on roads if they are used or kept for use in a public place. Under Entry 52 the State can levy tax on entry of goods into a local area for consumption, use or sale. Under Entry 54, subject to provisions of Entry 92(a) of the Union List, levy of tax on the sale or purchase of goods is permissible. As noticed supra, the petitioners would contend that levy of tax under a law coming under Entry 57 should be only be on vehicles, and not on goods carried by vehicles. The petitioners contend that construction equipment is either fitted or carried on vehicles and, as it is the basis for levying life tax, it suffers from lack of competence. In the legislative distribution of powers (Article 246 and the Seventh Schedule to the Constitution), there is perceptible dichotomy with reference to legislative areas entrusted to Parliament and the State Legislatures. Within their respective spheres they are empowered to exercise plenary Constitutional jurisdiction. Therefore judicial review of the vires of a law, follows well evolved and established principles. As summed up in Gujarat Ambuja Cements Ltd v Union of India[3] these are looking at the substance of the Act impugned to find out whether, in pith and substance, the legislation is within a particular entry whatever be its ancillary effect, finding out whether it is a colourable piece of legislation in the sense the ostensible and ancillary encroachment is beyond legislative competence and testing the law with reference to Article 13. Further the challenge to a State Legislature is resolved by looking into the substance of the matter. If, in pith and substance, it is within the entries of the State List, the incidental embrace with any subject in the Union List is ignored. On examining the object of the law challenged, if it+ is found that it has substantial connection with the legislative entry, it is certainly legislation on the topic and scrutiny must end there (Delhi Cloth and General Mills Co. Ltd v Union of India[4] and All India Federation of Tax Practitioners v Union of India[5]). To know whether a State Law falls within the State List entries, the Court has to give a comprehensive, holistic and wide meaning to the entry. Article 246(3) of the Constitution confers powers on the State Legislature to make a law “with respect to any matters in the State List.” This means, with regard to the subject matter mentioned in the relevant entry and with regard to any or more number of things about the subject of the entry. The plenary legislative power does not admit narrow and restrictive rendering of a legislative entry. While giving widest meaning to the language used in one entry, every attempt should be made to harmonize its contents with those of some other entry operating in the same field so that the latter may not be robbed off its entire content and render nugatory (Calcutta Gas Company (Proprietary) Ltd. v State of W.B.[6]). Thus if an enactment substantially falls within the powers conferred by the Constitution upon the Legislature which enacted it, the same is not invalid even if it incidentally encroaches on matters assigned to another (Tansukh Rai Jain v Nilratan Prasad Shaw[7]). I n Synthetics and Chemicals Ltd. v. State of U.P.[8], the Constitution Bench ruled that, “widest amplitude should be given to the language of these entries, but some of the entries in different lists or in the same list may override and some times may appear to be in direct conflict with each other, and then comes the duty of the Court to find the true intent and purpose and to examine the particular legislation in question. Each general word should be held to extend to all ancillary and subsidiary matters, which can fairly and reasonably be comprehended in it”. In All India Federation of Tax Practitioners, the Supreme Court, while observing that taxing Entries (45 to 63 in State List) are distinct, held that, “the enactment of law by the Parliament with respect to the entry in the Union List does not prevent the State Legislature from making a tax law if the State is so prompted by any of the entries 45 to 63.” Therefore if a State law attracts the persons or things which are incidentally also the subject matter of any legislative entry, the question of vires does not arise. The object of tax may fall under two or more entries in the State List. There could be and there have been different types of taxes on goods with reference to different aspects of goods. The duty of excise is a tax on the manufacture of goods whereas tax on the sale of goods is a charge in respect of sale. There is also tax on carriage of goods in respect of carriage. Under Entry 52, tax is on entry of goods into a local area for consumption, sale or use. Under Entry 54, tax is on sale or purchase of goods. Motor vehicles are also goods within the meaning of the term “goods” in Entry 52 (M/s.Vijaya Traders v CTO[9]). Indeed there is no dispute that tax is levied on motor vehicles under Entry 52 by legislation under the Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996. Under Entry 54 value added tax is levied under the Andhra Pradesh Value Added Tax Act, 2005. Legislation under Entry 56 is in relation to tax on goods and passengers carried by road or water-ways. Under the Taxation Act, tax is levied on motor vehicles which are suitable for use on the road. Thus, motor vehicles as goods attract tax with reference to different aspects. Even if the tax under the Taxation Act is considered – which is doubtful – as a tax also on the goods fitted and carried by the CEV the same cannot be said to be beyond legislative competence. We may hasten to add that under Section 3(1) of the Taxation Act, tax is on motor vehicles “used or kept for use” in a public place in the State of Andhra Pradesh. It cannot be considered as a tax on the goods carried by the vehicle. For various purposes, the MV Act classifies the motor vehicles into different categories like goods carriage, public service vehicle, transport vehicle, maxi cab, motor cab, motor cycle etc. When these are dealt with under Section 3(1) of the Taxation Act read with the relevant Schedule thereunder, the rates of tax, the period of tax would also differ. If the tax is levied on motor vehicles plying for hire for transporting passengers (Entry 4 of the First Schedule) and tax is levied on goods carriages depending on the laden weight (Entry 3 of the First Schedule), the same does not mean that it is a tax as is referred to in Entry 56 of the State List. The tax is levied under Section 3(1) of the Taxation Act when the motor vehicles are either used or kept for use for carrying passengers or for carrying goods in the State. In State of T.N. v M.Krishnappan[10], the Supreme Court held that, “The mode of collection or the incidence of tax cannot be the conclusive test to decide the nature of the levy. Levy is a constitutional concept where as mode of collection of tax is a statutory concept. They stand on different footings. … … … When an economic activity is to be valued it is open to the lawmaker to take into account various factors including the paying capacity of the user, the value of the vehicle, the economic life of the vehicle, etc”. Therefore, even if the petitioners’ contention is accepted that construction equipment and CEVs are two separable things, the tax levied under Section 3(1) of the Taxation Act cannot be treated as tax on goods and it is indisputably tax on the motor vehicles suitable for use on roads which are kept for use or are used in the State of Andhra Pradesh. The submission of the Counsel, therefore, cannot receive our acceptance and is, accordingly, rejected. (b) Impingement of free trade right There is no denial of the fact that a very few or negligible number of business concerns engaged in construction industry have their own mechanized equipment. Most of the companies hire the construction equipment, depending on their need, for a given period. Such machinery is not always available at the place of work or construction activity. It moves from place to place. Some times from one State to another State, or from the place of the owner to the place of the hirer. As per the Scheme of the Taxation Act whenever the CEVs from other States are hired for work within the State of Andhra Pradesh, they have to be registered by paying life tax. After completion of the work they go back and again if they come to the State of Andhra Pradesh, they need to be registered and life tax paid again. The Counsel point out that this impedes the inter-State trade and commerce violating Article 301 of the Constitution. They would also point out that the Government notification vide G.O.Ms.No.411, dated 28.4.1997 enables refund of tax in respect of motor vehicles removed to any other State on transfer of ownership, or change of address, and it has no application to the CEVs who come and go for executing works. Part XIII of the Constitution is titled as ‘Trade, Commerce and Intercourse within the territory of India’. It is the source of “commerce clause” in the Indian Constitution. Article 301 of the Constitution guarantees free trade and commerce through the territory of India (subject to the provisions of Articles 302 to 307). It is an express Constitutional limitation on the legislative powers. But the freedom of trade is not absolute. The Parliament is competent to impose restrictions under Article 302 of the Constitution and a State, by law under Article 304(a), may impose non-discriminatory taxes on goods imported from other States, and under Article 304(b) impose reasonable restrictions on the freedom of trade and commerce. A State law imposing non-discriminatory tax on the goods imported from other States is thus saved. A State law with Presidential assent imposing reasonable restrictions on the freedom of trade is also immune from challenge. The law levying compensatory tax is also immune from the mischief of Article 301. But, the plea of impingement of commerce clause can only be with reference to a State law imposing tax on the imported goods or reasonable restrictions; it can never be a plea to sustain a challenge to a Taxation law coming under Entry 57 of the State List. I n Atiabari Tea Company Limited v State of Assam[11] a Constitution Bench of the Supreme Court considered the provisions of Part XIII of the Constitution. While observing that wherever it is held that Article 301 applies, the legislative competence of the legislature in question will have to be judged in the light of relevant Articles of Part XIII, the Apex Court ruled Let us now revert to Article 301 and ascertain the width and amplitude of its scope. On a careful examination of the relevant provisions of Part XIII as a whole as well as the principle of economic unity which it is intended to safeguard by making the said provisions, the conclusion appears to us to be inevitable that the content of freedom provided for by Article 301 ... certainly includes movement of trade which is of the very essence of all trade and is its integral part. If the transport or the movement of goods is taxed solely on the basis that the goods are thus carried or transported that, in our opinion, directly affects the freedom of trade as contemplated by Article 301. If the movement, transport or the carrying of goods is allowed to be impeded, obstructed or hampered by taxation without satisfying the requirements of Part XIII the freedom of trade on which so much emphasis is laid by Article 301 would turn to be illusory. When Article 301 provides that trade shall be free throughout the territory of India primarily it is the movement part of the trade that it has in mind and the movement or the transport part of trade must be free subject of course to the limitations and exceptions provided by the other Articles of Part XIII.... restrictions freedom from which is guaranteed by Article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. (emphasis supplied) In Automobile Transport Ltd v State of Rajasthan[12], in their challenge to the Rajasthan Motor Vehicles Taxation Act, 1951, the appellants were unsuccessful before the Rajasthan High Court. The Supreme Court affirmed the Judgment of the High Court holding that, “regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and such measures need not comply with the requirements of the proviso to Article 304(b) of the Constitution, ... (and) that the relevant articles in Part XIII apply only to legislation in respect of the entries relating to trade and commerce in any of the lists of the Seventh Schedule. But we must advert here to one exception which we have already indicated in an earlier part of this Judgment. Such regulatory measures as do not impede the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Article 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and intercourse but rather facilitate them”. Justice Koka Subba Rao (as he then was) in concurring opinion summarized the following seven principles: (1) Article 301 declares a right of free movement of trade without any obstructions by way of barriers, inter-State or intra-State, or other impediments operating as such barriers. (2) The said freedom is not impeded, but, on the other hand, promoted, by regulations creating conditions for the free movement of trade, such as, police regulations, provision for services, maintenance of roads, provision for aerodromes, wharfs etc., with or without compensation. (3) Parliament may by law impose restrictions on such freedom in the public interest; and the said law can be made by virtue of any entry with respect whereof Parliament has power to make a law.(4) The State also, in exercise of its legislative power, may impose similar restrictions, subject to the two conditions laid down in Article 304(b) and subject to the proviso mentioned therein. (5) Neither Parliament nor the State Legislature can make a law giving preference to one State over another or making discrimination between one State and another, by virtue of any entry in the Lists, infringing the said freedom. (6) This ban is lifted in the case of Parliament for the purpose of dealing with situations arising out of scarcity of goods in any part of the territory of India and also in the case of a State under Article 304(b), subject to the conditions mentioned therein; and (7) The State can impose a non-discriminatory tax on goods imported from other States or the Union territory to which similar goods manufactured or produced in that State are subject. Atiabari and Automobile Transport were subsequently followed in a number of cases[13]. I n Jindal Stainless Limited (2) v State of Haryana[14], the Supreme Court reiterated the law. It is beneficial to excerpt the following. Article 301 is binding upon the Union Legislature and the State Legislatures, but Parliament can get rid of the limitation imposed by Article 301 by enacting a law under Article 302. Similarly, a law made by the State Legislature in compliance with the conditions imposed by Article 304 shall not be hit by Article 301. Article 301 thus provides for freedom of inter-State as well as intra-State trade and commerce subject to other provisions of Part XIII and correspondingly it imposes a general limitation on the legislative powers, which limitation is relaxed under the following circumstances: (a) Limitation is relaxed in favour of Parliament under Article 302, in which case Parliament can impose restrictions in public interest. Although the fetter is limited enabling Parliament to impose by law restrictions on the freedom of trade in public interest under Article 302, nonetheless, it is clarified in clause (1) of Article 303 that notwithstanding anything contained in Article 302, Parliament is not authorised even in public interest, in the making of any law, to give preference to one State over another. However, the said clarification is subject to one exception and that too only in favour of Parliament, where discrimination or preference is admissible to Parliament in making of laws in case of scarcity. This is provided in clause (2) of Article 303. (b) As regards the State Legislatures, apart from the limitation imposed by Article 301, clause (1) of Article 303 imposes additional limitation, namely, that it must not give preference or make discrimination between one State or another in exercise of its powers relating to trade and commerce under Entry 26 of List II or List III. However, this limitation on the State Legislatures is lifted in two cases, namely, it may impose on goods imported from sister State(s) or Union Territories any tax to which similar goods manufactured in its own State are subjected but not so as to discriminate between the imported goods and the goods manufactured in the State [see clause (a) of Article 304]. In other words, clause (a) of Article 304 authorises a State Legislature to impose a non-discriminatory tax on goods imported from sister State(s), even though it interferes with the freedom of trade and commerce guaranteed by Article 301. Secondly, the ban under Article 303(1) shall stand lifted even if discriminatory restrictions are imposed by the State Legislature provided they fulfil the following three conditions, namely, that such restrictions shall be in public interest; they shall be reasonable; and lastly, they shall be subject to the procurement of prior sanction of the President before introduction of the Bill. The settled position is that, unless a State law directly and immediately restricts or impedes free flow and movement of trade, it does not impinge on free trade right. Taxes levied as such do not amount to restriction unless they operate as direct and immediate restriction free trade right. Even a State law is immune to challenge if such a law levies non-discriminatory taxes, imposes reasonable restrictions and taxes which are compensatory in nature. The burden is always on the caveator to demonstrate that a State directly and immediately restricts free trade. The existence and non-existence of restrictions impeding free flow of trade is then a matter of inference from the material presented for scrutiny. As was held in various decisions of the Supreme Court dealing with Articles 301 and 304 of the Constitution, only a law in relation to freedom of trade and commerce levying taxes on the goods imported from the State or a law imposing restrictions need to comply with the norms in Part XIII of the Constitution. Even a law levying entry tax under Article 304(a) of the Constitution alone may be defended by taking the plea of being a compensatory tax (Automobile Transport). Thus, ordinarily, it is not every law coming under Entries 51, 54, 56 and/or 57 that need to be tested with reference to the commerce clause. By a catena of decisions, it is well established that the tax imposed on motor vehicles is basically a tax for use of the roads within the State. Even though it is a compensatory tax, it facilitates trade, commerce and intercourse within the State by providing and managing roads in motorable condition. The mere fact that an individual for some reason or the other chooses not to enjoy the services provided cannot escape the tax liability on that score nor can the provision imposing the tax become invalid. “The levy is for keeping the motor vehicle for use on the public roads or which is capable of being used on public roads. The levy is compensatory but it does not violate the provisions of Article 301 of the Constitution” (Chief General Manager, Jagannath Area v State of Orissa[15]). The only point urged to show that the impugned proviso impedes free movement of CEVs is the lack of Rules and Regulations for refund of the money. In our considered opinion that itself cannot be a ground to invoke the commerce clause. We are not able to appreciate the petitioners’ contention, that by levying life tax on CEVs, freedom of trade is impinged. No evidence is placed before us in that connection. Furthermore, the hardship in getting refund when the CEVs leave the State and again make reentry now stands mitigated. The learned Advocate General on 13.7.2011 has filed an affidavit of the Principal Secretary of the State in Transport, Roads & Buildings department. The affidavit states that, “once lump sum tax is paid in respect of CEVs, no further tax is payable. However, when a CEV is removed to other State by way of change of address or transfer of ownership or when the vehicle is damaged within six year period beyond repairs, the refund of tax payable will be made through notification under Sections 9 and 19 of the Taxation Act ... ... Government would issue suitable notification under Section 9 read with 19 of the Taxation Act for refund of tax with respect to CEVs so as to ensure that owners of the CEVs do not face any hardship with respect to refund of tax”. In view of this, the plea raised by the petitioners does not merit consideration and deserves to be rejected. (c) Justification for compensatory tax As already noticed, the petitioner would contend that the tax on motor vehicles being compensatory tax, it should have nexus with the usage of roads; CEVs do not use the roads regularly and, therefore, any tax on the CEVs is unconstitutional. This submission, in our considered opinion, cannot be countenanced for various reasons which we have spelt out in detail infra while considering other issues. Therefore the consideration here is limited to two aspects, namely, whether the petitioners can raise such a plea, and whether the State has successfully met the allegations of absence of nexus. The distinction between “tax” and “fee” is well settled. A fee is the amount collected for rendering service. It has certain elements of quid pro quo between the service rendered and fee charged though arithmetical equivalence is not expected. The principle of equivalence which may justify fee is different from the principle of ability which is the basis for levy of tax. A ‘tax’ is a compulsory sovereign impost. When the tax is levied specific benefit may not be identifiable nor the benefit is capable of measurement. Incidentally if some benefit accrues from the State action it is not the determining factor and, therefore, levy of tax assessed on elements of manufacture, purchase, sale, consumption, use, capital etc., need not result in any benefit to the tax payer (Secunderabad Hyderabad Hotel Owners Association v Hyderabad Municipal Corporation[16], Commr. & Secy. to Govt., C.T. & R.E. Deptt., v S.M.F. Corpn[17] and Jindal Stainless (2)). Compensatory tax is a sub-class of “a fee”. Unlike a tax it need not be progressive, but it has to be broadly proportional. As it is based on the principle of equivalence the value of quantifiable benefit is to be measured by the costs incurred for providing the facility/service which is the basis for reimbursement for recompense for the provider of the services/facilities. A compensatory tax is, therefore, charged for offering trading facilities by the Government and adds to the value of the trade and commerce. If the Government, by some positive action, confers upon the individuals some measurable advantage the community at large shall pay for it even if the benefits are intended to help the growth of trade. (Jindal Stainless (2)). The burden to establish nexus between the compensatory tax and the benefits conferred is always on the State. The State must prove that the compensatory tax levied satisfies the test in Automobile Transport viz., “the tax levied for providing certain facilities for the better conduct of business is not patently much more than what is required for providing the facilities”. It is well settled that the tax levied under legislation under Entry 57 of the State List is compensatory tax; it does not hamper freedom of trade so long as it remains reasonable. This tax does not in any way restrict the right to free trade nor impede it. A tax under the Taxation Act is both compensatory and regulatory. When the State Legislature is competent under Entry 57 of the State List to make a law for levying taxes on motor vehicles suitable for use on the roads, it only means that the Constitution itself permitted making of such law subject to any law made by the Parliament under Entry 35 of the Concurrent List. When such is the case, to require the State to prove with arithmetical precision the nexus between the tax and facilities provided is ignoring the interpretative rule that the entries must be given widest amplitude. Therefore, in our considered opinion, though the State may defend the law referable to Article 304 of the Constitution with reference to clauses (a) and (b) thereof as well as on the principle of compensatory tax, the State would not be required to discharge the burden when a law is made with reference to Entry 57 of the State List. The judicially evolved concept of compensatory tax and the burden to prove the nexus would be more severe in the case of a law which impinges the right under Article 301 of the Constitution. The burden would not be that heavy when the State defends a law which comes under Entry 57 of the State List. Therefore, it is doubtful whether the petitioners could raise such a plea in a challenge to the Taxation Act or any of its provisions. We have also considered the other aspect of the matter as to whether the State has met the allegations successfully. In paragraph 17 of the common counter in W.P.No.4537 of 2010 the Principal Secretary states as follows. Levy of Road Tax is compensatory in nature and the State has been authorized to levy and collect road tax from the Motor Vehicles. The State Government has been spending a lot of money on laying new roads, expanding the existing roads and maintaining and modernizing the road network and infrastructure. The following are the amounts that have been spent on the laying new roads, expanding the existing roads and maintaining and modernizing the road network and infrastructure. The following are the amounts that have been spent on the laying new roads, expanding the existing roads and maintaining and modernizing the road network and the amounts realized under the A.P.M.V.T Act. Sl. No. Year Amount allocated for development of roads (Rs. in Crores) Amount collected by way of taxes (Rs. in Crores) 1. 2008-09 Rs.3,009.65 Rs.1,476.03 2. 2009-10 Rs.3,616.59 Rs.1,579.58 3. 2010-11 Rs.3,517.02 (proposed) Rs.2,230.22 (estimates) It is submitted that the tax imposed on construction equipment vehicles is in the nature of compensatory and regulatory. Therefore, levy of tax would not be violative of Articles 14 and 301 of the Constitution of India. The legislature has the power to distribute tax burden in flexible manner. As held by the Supreme Court, the tax on motor vehicle is compensatory tax. It is for the use of the roads. It is not a tax on ownership or possession of the motor vehicles. The amendment under challenge was made to levy life tax on the CEVs after taking into consideration the representation made by the owners as well as various factors like the future projection spread over the economic life of the vehicle, fall in rupee value, inflation, rising cost of material etc., and, therefore, the tax is not a hindrance in the enjoyment of the right under Article 19(1)(g) of the Constitution. The counter averments remain uncontroverted and, therefore, we hold that the submission of the petitioners that there is no nexus with the use of the roads and imposition of tax is devoid of any merit. (d) Enacting provision and the third proviso This issue is intricately connected with the validity of collection of tax from the owners of CEVs. The petitioners would contend that the impugned third proviso is inconsistent with and repugnant to the charging provision i.e., Section 3(1) of the Taxation Act. According to them, tax is charged on motor vehicles used or kept for use in a public place; the CEVs are not motor vehicles; they are not used in public place and, therefore, impugned proviso is repugnant. The submission is misconception. There is no dispute that the charge is only on motor vehicles used or kept for use in public place and all the vehicles as defined under Section 2(28) of the MV Act, that is to say, mechanically propelled vehicles adapted for use upon the roads. When the CEVs are admittedly registered as LMVs/ HMVs, the question of repugnancy between the charging section and the impugned proviso does not arise at all, if both the provisions are construed harmoniously. In Justice G.P. Singh’s Principles of Statutory Interpretation (12th Edn., 2010), the learned author points out that a statute must be read as a whole and one provision of the Act should be construed with reference to the other provisions of the same Act so as to make it consistent. In considering the statute, the inconsistency or repugnancy either within a section or between a section and other parts of the statute, must be avoided. By applying the rule of harmonious construction effect should be given to both seemingly repugnant provisions. The same rule applies in regard to sub-sections of a section. If the two sections or two sub-sections cannot be harmoniously construed, as a last resort the Court must give effect to the last of the two sections or sub-sections, for, the last in the enactment speaks of the last intention of the law makers. The intention of a proviso is to narrow the effect of the preceding clause or to make a general statement a clear proposition. More often than not a proviso is an exception to enacting provision. A proviso is always construed as operating to qualify that which precedes it. The rule that an Act should be construed as a whole also applies to a proviso. Therefore a section containing a proviso has to be constructed as a whole (Section 242, Francis Bennion’s Treatise on Statutory Interpretation (5th Edn., Indian Reprint). In Sundaram Pillai v V.R. Pattabhiraman[18] the Supreme Court pointed out four purposes of a proviso. These are: (i) qualifying or excepting certain provisions from the main enactment; (ii) it may entirely change the very concept of intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (iii) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (iv) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision. These have been quoted with approval in Swedish Match AB v. Securities and Exchange Board, India[19] and Southern Petro Chemical Industry Co. Ltd v Electricity Inspector, ETIO[20]. If the language used is quite clear, and it is intended as an exception or clarificatory to the section, a proviso cannot be considered as substantive provision. In case the enacting clause and proviso throw up inconsistent situations, the Court must construe the section or enactment as a whole to reconcile the apparent conflict. Here again if there is inconsistency between the enacting provision and the proviso, there cannot be any hurdle to apply the rule that the last of the two provisions prevail over the other. Section 3(1) of the Taxation Act is a charging provision. Section 3(2) with its provisos is intended to check the Government power to issue notification levying different rates of tax for different periods on motor vehicles. Indeed even if Section 3(2) does not exist on the statute book still it is competent for the Government to prescribe the measure of tax. However the legislature thought it fit to regulate rates of tax to be collected by the Government by notification. The provisos under Section 3(2) of the Taxation Act therefore clarify rates of taxes for particular type of vehicles. None of the provisos is in any way repugnant to Section 3(1) of the Taxation Act. The whole operation of Section 3(2) and its provisos is only when the taxable event occurs. When a motor vehicle is used or kept for use in the State of Andhra Pradesh, the Government can levy tax as per the notification issued in accordance with Section 3(1) read with Section 3(2). In construing both the sub-sections as well as provisos, the question of inconsistency or repugnancy would not arise. Of course as rightly pointed out by the Counsel, unless the vehicles are motor vehicles and until they are used or kept for use in the State of Andhra Pradesh, taxable event does not occur attracting the levy. Merely because a dispute exists as to whether the vehicle is a motor vehicle, and/or such vehicle is used or kept for use in a public place in the State of Andhra Pradesh, the same does not lead to the inference that there is inconsistency or repugnancy between the third proviso and the enacting provision. The repugnancy, in our considered opinion, would arise only when a proviso is read as a substantive provision, cannot stand alone without deviating from the enacting provision. The Counsel relied on Commissioner of Commercial Taxes, Board of Revenue v Ramkishan Shrikishan Jhaver[21] in support of the contention that an inconsistency and repugnancy proviso must suffer invalidation. We have perused the judgment and do not find any support to the petitioners’ contention. We also hasten to add that in our view there is no inconsistency and repugnancy between the third proviso and charging section. The impugned proviso very well fits in the general scheme of the plenary legislation. We reject the contention as devoid of merit. (e) Whether the impugned proviso violates Articles 14 and 19(1)(g) All the Counsel for the petitioners contend that the levy of life tax on CEVs is arbitrary and unreasonable and being violative of Articles 14 and 19(1)(g). The Counsel would point out the following specific and focused aspects in support of their submission. First, levy of life tax on CEVs brought from outside the State repeatedly impinges the fundamental right under Article 19(1)(g) and unreasonable in the absence of proper mechanism for refund of the tax. Secondly, all the CEVs are not always suitable for use on roads. They are mainly meant for off-highway activity and some of them are carried on another vehicle from place to place. As the taxable event for the purpose of charging provision is the use of road in public place, the levy is arbitrary and unreasonable. Thirdly, most of the petitioners have registered their vehicles as non-transport vehicles under Rule 48 of the Central Rules. They have been paying quarterly tax under entry 8(1)(f) of the First Schedule. If they are now asked to pay the life tax without taking into consideration the depreciated value of the vehicles, it renders levy arbitrary and irrational. Fourthly, even in respect of CEVs exclusively used in mining which are exempted from the tax under Section 10(1) of the Taxation Act, the owners of such vehicles are compelled to pay the life tax on CEVs. Before considering the above submissions, we may mention that in a case of this nature where the challenge is based on Constitutional issues as well issues in the realm of administrative law, there is bound to be some overlapping in dealing with each of the point. The question whether CEVs are motor vehicles within the meaning of Section 2(28) of the MV Act read with Section 2(g) of the Taxation Act is dealt in a separate part infra. Therefore, avoiding any repetition here, first we would notice, in brief, the principles to be kept in mind while testing the legislative enactment on the ground of arbitrariness and unreasonableness. Many of the parameters of judicial review developed in the field of administrative law equally apply to the domain covered by the Constitutional Law (S.R. Bommai v. Union of India[22]). Judicial review is essentially governed by public law principles. But the tests often applied in the review of legislative action and the parameters applied for scrutiny of administrative action slightly differ with unavoidable overlapping. Illegality, irrationality (including arbitrariness), impropriety and proportionality are now well accepted grounds of judicial review (Tata Cellular v Union of India[23] and Om Kumar v Union of India[24]). The Court adapts dual review principles – either strict scrutiny as a primary review or intermediate/deferential secondary review. The nature of the power exercised by the public authority, the subject matter of decision and circumstances leading decision, are the deciding factors as to which review principle is to be adapted. The Court, on a proper challenge, can strike down the legislation on two grounds, namely, lack of legislative competence and violation of fundamental rights guaranteed under Part III of the Constitution or for violation of other constitutional provisions. In State of Andhra Pradesh v McDowell & Co.,[25] the Supreme Court observed as under. The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. There is no third ground. ... ... In other words, say, if an enactment is challenged as violative of Article 14, it can be struck down only if it is found that it is violative of the equality clause/ equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by Clauses (a) to (g) of Article 19(1), it can be struck down only if it is found not saved by any of the Clauses (2) to (6) of Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invaliding an Act. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The Court cannot sit in judgment over their wisdom.... It is one thing to say that a restriction imposed upon a fundamental right can be struck down if it is disproportionate, excessive or unreasonable and quite another thing to say that the Court can strike down enactment if it thinks it unreasonable, unnecessary or unwarranted. (emphasis supplied) Therefore, when a legislation is challenged on the ground that the State lacks competency, the Court has to insist upon strict scrutiny test. Any legislation by the Parliament or the State must be with reference to specific powers conferred in relation to legislative entries in VII Schedule to Constitution. If the source of power is not any entry in the three legislative lists or not traceable to any other constitutional provision (In Re Cauvery Water Disputes Tribunal[26]) and if the State fails to show a specific entry or specific provision within the parameters of well settled constitutional interpretation of legislative powers, such law must fail on strict scrutiny. A complaint of breach of fundamental rights or other constitutional provisions also call for primary review applying strict security. If a legislation is challenged as violating Article 14, 15 or 16 it is for the State to show that the classification satisfies the rationality test and nexus test (D.S. Nakara v Union of India[27]). If a legislation is assailed as violating Article 19 freedoms, it is for the State to justify the restrictions as reasonable. (Sagir Ahmed v State of Uttar Pradesh[28], Virajlal M. & Co., v State of Madhya Pradesh[29] and State of Gujarat v Mirzapur Moti Kureshi Kassab Jamat[30]). If any legislation or executive action is assailed as violating Article 21, heavy burden lies on State to sustain its action by showing 'life and liberty' are being affected in accordance with law which is not capricious and irrational (E.P. Royappa State of Tamil Nadu[31], Maneka Gandhi v Union of India[32], and Mithu v State of Punjab[33]). Asociated Provincial Picture Houses Limited v Wednesbury Corporation[34] laid down that every public authority must exercise statutory discretion reasonably; a person entrusted with the discretion must direct himself properly in law; he must call his attention to the matters which he is bound to consider; must exclude from his consideration matters which are irrelevant to the matter that he has to consider; must obey the applicable rules before arriving at a decision; the decision must be something that should not be absurd that “no sensible person could ever dream that it lay within the powers of the authority to arrive at such decision”. Immortalized as Wednesbury principle it is now equated to “rationality and unarbitrariness” in discharge of public functions (Tata Cellular and Om Kumar). In Om Kumar, the Supreme Court opined that Wednesbury principle applies when State action is questioned as arbitrary. When legislative action is challenged as being incompetent or violative of fundamental rights, the Court has to assume a primary role. In such primary judicial review, the standard is invariably is strict scrutiny test. As elucidated in Omkar, By \"proportionality\", we mean the question whether, while regulating exercise of fundamental rights, the appropriate or least- restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority \"maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve\". The legislature and the administrative authority are, however, given an area of discretion or a range of choices but as to whether the choice made infringes the rights excessively or not is for the court. That is what is meant by proportionality. There is an area where strict scrutiny is not required. When a decision maker is required to evaluate the facts and apply the principles of law, even if a second view is possible to the evaluation of facts, the Court would not interfere nor it is entitled to apply the law to the facts as assessed by it. If two factual views are possible, Court would not, ordinarily substitute its view to that of decision maker. When any State action is challenged as arbitrary or capricious which only means irrational, Wednesbury principle is applied in which case ordinarily the Court would consider the facts determined by the authority as final. In such a case, secondary review is called for forming deferential or intermediate standard of scrutiny. To sum up on this aspect, whenever there is a complaint of violation of Article 14 and 19 primary review applies which means the impugned action has to be subjected to strict scrutiny. When State action is challenged as arbitrary, irrational and unreasonable, secondary review following Wednesbury principle has to be applied. In Ajit Singh v. State of Punjab[35], the dual review principles are summarized as under. It is clear from the above discussion that in India where administrative action is challenged under Article 14 as being discriminatory, equals are treated unequally or unequals are treated equally, the question is for the Constitutional Courts as primary reviewing courts to consider correctness of the level of discrimination applied and whether it is excessive and whether it has a nexus with the objective intended to be achieved by the administrator. Here the court deals with the merits of the balancing action of the administrator and is, in essence, applying \"proportionality\" and is a primary reviewing authority.... But where an administrative action is challenged as \"arbitrary\" under Article 14 on the basis of Royappa (supra) (as in cases where punishments in disciplinary cases are challenged), the question will be whether the administrative order is \"rational\" or \"reasonable\" and the test then is the Wednesbury test. The courts would then be confined only to a secondary role and will only have to see whether the administrator has done well in his primary role, whether he has acted illegally or has omitted relevant factors from consideration or has taken irrelevant factors into consideration or whether his view is one which no reasonable person could have taken. If his action does not satisfy these rules, it is to be treated as arbitrary. The freedom to carry on any trade or business is not absolute. It is subject to any law imposing in the interests of general public, reasonable restrictions on the exercise of the right. “Restriction” means regulation and/or total prohibition. In Mirzapur Moti Kureshi a seven Judge Bench of the Supreme Court ruled that, “(i) “restriction” includes cases of “prohibition”; (ii) the standard for judging reasonability of restriction or restriction amounting to prohibition remains the same, excepting that a total prohibition must also satisfy the test that a lesser alternative would be inadequate; and (iii) whether a restriction in effect amounts to a total prohibition is a question of fact which shall have to be determined with regard to the facts and circumstances of each case, the ambit of the right and the effect of the restriction upon the exercise of that right”. The examination of reasonableness of restrictions is not on subjective standards nor is the general notion of reasonableness or hardship suitable. While leaning towards Constitutionality, the Court has to examine the object, purpose and the mischief an Act seeks to prevent, and view reasonableness in the context of issue faced by the legislature (State of Madras v V.G.Row[36], Dalmia Cement (Bharat) Limited v Union of India[37] and Virajlal). What is now reasonable restriction on the freedom of trade may prohibitively curtail the enjoyment of the right after lapse of some time. Therefore the need of the society and the constitutional requirement of ensuring the interests of the general public are relevant in deciding the reasonableness of restrictions imposed by law. “There must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will naturally arise” (M.R.F.Limited v Inspector of Kerala[38])”. The sweep of equality clause in taxation is well settled. A fiscal legislation is also subject to Article 14 of the Constitution. Absolute equality and justice is not attainable in tax laws. Legislature must be left to decide the State policy within Constitutional limitations (State of U.P. v M/s.Delhi Cloth Mills[39]) and a legislature in order to tax some, need not tax all. It can adopt reasonable classification of persons and things in imposing tax liabilities. The law cannot be termed discriminatory because different tax rates are prescribed for different items, provided the said items form a distinct and separate group and there is a reasonable nexus between the classifications and the object of prescribing differential rates. If the legislature adopts broad classification, the failure to mini-classify even if it is possible, does not infringe Article 14 of the Constitution (Murthy Match Works, M/s. v Asst. Collector of Central Excise[40]). The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidation (Malwa Bus Service (Pvt.) Ltd. v State of Punjab[41]). The power of the legislature to classify goods, things or persons is wide and flexible so as to enable it to adjust its system of taxation in all proper and reasonable ways (Mohandas N Hegde v State of Karnataka[42]). The Courts’ lean more readily in favour of upholding the constitutionality of 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 utilize the measures of taxation introduced by it for the purpose of achieving maximum social good and one has to trust the wisdom of the legislature in this regard (Malwa Bus Service). Unless a fiscal law is manifestly discriminatory, the Court should refrain from striking it down on the ground of Discrimination. (Khandige Sham Bhat v Agricultural Income-tax Officer, Kasaragod[43]). We may now consider the alleged unreasonable aspects of the levy as urged by the petitioners. (i) Repeated levy of life tax We have already considered this aspect supra. There is no denial of the fact that the CEVs which are brought from neighbouring States are now being registered as LMVs/ HMVs and they are paying the quarterly tax at the First Schedule rates. There is not much grievance made out with regard to repeated registrations as and when these CEVs enter the State of Andhra Pradesh for deployment. A CEV which is brought to Andhra Pradesh is required to be registered under Section 39 of the MV Act and pay life tax as per the third proviso and the Fourth Schedule depending on its age. After completing the work, it would naturally go to the place wherever it is required. If again it enters the State of Andhra Pradesh in connection with another construction activity, the CEV has to be registered and the life tax has to be paid. This repeated registration and payment of tax may look odd. The petitioners had no grievance to pay quarterly tax repeatedly as and when CEVs are put to work in Andhra Pradesh. Presumably for the reason that under entry 8(1)(f) of the First Schedule, quarterly tax is very negligible in comparison with the life tax payable at the rates specified in the Fourth Schedule. The hardship if any now stands mitigated in view of the additional counter affidavit filed by the Principal Secretary to the State Transport, Roads & Buildings department to which reference is already made. The petitioners who are required to pay life tax as and when their vehicles are brought to the State, can seek refund of the amount, and in so far as those cases are concerned the provision cannot be said to be unreasonable nor is it objectionable restrictive regulation. (ii) Levy of life tax on the CEVs in mining industry Some CEVs are designed for digging, carrying, loading/unloading, drilling with or without special modification for use in mining industry. Section 10 of the Taxation Act exempts such CEVs used solely in mining and agricultural purposes from payment of MV Tax. The Section makes it conditional that all these vehicles should also be registered under the MV Act. Indeed any class of motor vehicles cannot be permitted to be driven in a public place without being registered in accordance with Chapter IV of the MV Act. As per Section 41, an application for registration shall be accompanied by such documents as may be prescribed by the Central Government by the Rules. As per Rule 47 of the Central Rules, an application for registration shall be made in Form 20 to the Registering Authority. There is no dispute that at the time of registration, Rule 3 of the Andhra Pradesh Motor Vehicles Taxation Rules, 1963 (the A.P. Rules) requires the Registering Authority to make an entry regarding the amount of tax paid in the certificate of registration. Rule 6 of the A.P. Rules requires the owner to make the payment of tax at the time of registration of the vehicle. Therefore even when a motor vehicle is designed and used for mining purpose, first it has to obtain registration by paying tax so as to seek exemption under Section 10 of the Taxation Act. The grievance of the petitioners, though well founded, in view of the additional affidavit filed by the Principal Secretary the position is now clear that all those petitioners who use the CEVs for mining operations, can seek refund of the life tax after obtaining the exemption from the competent authority. (iii) Levy on the cost of vehicle In majority of these cases the CEVs are already registered as LMVs/HMVs. The quarterly tax is being paid under entry 8(1)(f) of the First Schedule. If the owners of these CEVs are required to pay the life tax, does it render the impugned proviso arbitrary and unreasonable? It is well settled that examination of reasonableness of restrictions must be on objective considerations. The general notion of hardship must have no bearing in considering the issue of unreasonableness. Keeping in view the object, the purpose and the mischief the proviso seeks to prevent, by no stretch of imagination one can say that the levy of life tax on those CEVs which have been already paying quarterly tax is unreasonable and prohibitively curtails the enjoyment of freedom of right to business and trade under Article 19(1)(g) of the Constitution. The only test to be satisfied is that there ought to be nexus between the restrictions and object of the Act, to draw presumption of constitutionality in favour of the impugned provision. Merely because the legislature does not provide for taking the depreciated value of the CEVs for the purpose of determining the life tax the presumption would not be wiped out. While analyzing we have pointed out that legislature has taken care to keep in place various rates of the life tax having regard to the age of the vehicle. If the vehicle is new the rate of tax is 7.5% of the cost of the vehicle; if the age of the vehicle is less than three years the rate of tax is 6.5% of the cost of the vehicle; if the age of the vehicle is more than three years and less than six years the rate of tax is 5% of the cost of the vehicle; and if the age of the vehicle is more than six years, the rate of tax is 4% of the cost of the vehicle. As pointed out by the State, the legislature has considered various factors like fall in the value of the rupee, inflation, rising cost of the material etc. As the age of the vehicle is one of the factors which has gone into legislative determination of rate of tax, petitioners cannot be allowed to say that such differential rates are tainted with unreasonableness. (iv) Life tax for off-highway activity The common ground urged with reference to the Constitutionality of the statute as well as the allegation that levy of tax on CEVs is ultra vires is that CEVs are basically meant for off- highway activity; they are not suitable for use on the roads; and most of the time they are moved from place to place by carrying on other motor vehicles. Therefore the petitioners contend that levy of life tax on CEVs meant for off-highway activity is itself unreasonable. We do not think that the levy of life tax on CEVs is unreasonable. This has something to do with the taxable event. The petitioners are right that though every motor vehicle is required to be registered under the MV Act, owner of such motor vehicle is not required to pay life tax or any tax under the Taxation Act unless such motor vehicle is “used or kept for use in a public place in the State of Andhra Pradesh”. We would consider this matter in detail with other points infra. Suffice to say here that two principles in this regard are well settled. These are: (i) if the motor vehicle is registered – though not always determinative; it is sure deemed that it is used or kept for use in the State (Travancore Tea Co. Ltd. v State of Kerala[44]); and (ii) the owner or person having control and possession over the motor vehicle is statutorily obliged to pay the tax in advance irrespective of the condition of the vehicle for use on the roads and the liability to pay the tax in advance is not dependent on the quantity of use or the period during which it was used on the road (State of Karnataka v K.Gopalakrishna Shenoy[45], CGM, Jagannath Area and State of Gujarat v Akhil Gujarat Pravasi V.S. Mahamandal[46]). The State has contended that the vehicles fitted with pneumatic or non-pneumatic or with combination of both are self-propelled adapted for use upon the roads; the power of propagation is transmitted through external and internal source and, therefore, they are registered as non-transport vehicles under the Central Rules. This is not seriously controverted. Indeed as pointed out earlier, all the petitioners have already registered their vehicles as motor vehicles and whether they use the roads for limited period irregularly or only for the purpose of moving from one workspot to another, they cannot be said to be unsuitable for use on the roads. For these reasons and for the reasons which we shall spell out latter, the levy of life tax on CEVs is not unreasonable especially when the amendment was introduced based on the representation of the owners as a regulatory measure in the collection of tax on the CEVs. Hence we hold that the plea of the petitioners that the impugned proviso is unreasonable is not well-founded and does not commend to this Court. II. WHETHER CEVs ARE MOTOR VEHICLES The submissions in this regard are varied. We would notice the submissions first and then deal with different aspects. The main submission is that the definition of “motor vehicle” as defined under Section 2(28) of the MV Act is incorporated in Section 2(j) of the Taxation Act; unless and until Section2(j) is amended defining “Construction Equipment Vehicle” any amendment to Section 2(28) of the MV Act cannot be read into the Taxation Act; the meaning of CEV as defined in Rule 2(ca) of the Central Rules does not form part of Section 2(28) of the MV Act; and when CEV is not defined in the MV Act, the meaning of motor vehicle in Section 2(28) of the MV Act alone would govern the situation. Here, it is relevant to quote Section 2(28) of the MV Act, Rule 2(ca) of the Central Rules and Section 2(j) of the Taxation Act. The Motor Vehicles Act, 1988 2. (28) “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty five cubic centimeters. The Central Motor Vehicles Rules, 1989 2. (ca) “Construction equipment vehicle” means rubber tyred, (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor, roller dumper, motor grader, mobile crane, dozer, fork lift truck, self-loading concrete mixer or any other construction equipment vehicle or combination there of designed for off highway operationsin mining, industrial undertaking, irrigation and general construction but modified and manufactured with “on or off” or “on and off” highway capabilities. Explanation.—A construction equipment vehicle shall be a non- transport vehicle the driving on the road of which is incidental to the main off highway function and for a short duration at a speed not exceeding 50 kms per hour, but such vehicle does not include other purely off highway construction equipment vehicle designed and adapted for use in any enclosed premises, factory or mine other than road network, not equipped to travel on public roads on their own power. The Andhra Pradesh Motor Vehicles Taxation Act, 1963 2. (j) words and expressions used but not defined in this Act, shall have the meanings assigned to them in the Motor Vehicles Act. Section 2(28) of the MV Act has a main part, an inclusive part and an exclusive part. As per the main part, any mechanically propelled vehicle adapted for use upon the road is a motor vehicle. This does not brook any doubt nor there is any vagueness. Any vehicle which is mechanically propelled and adapted for use upon the roads falls within the meaning of motor vehicle. Under the inclusive part, even a chassis to which body has not been attached or a trailer is a motor vehicle. A vehicle running upon fixed rails, a vehicle of a special type adapted for use only in a factory or any other enclosed premises and a vehicle with less than four wheels fitted with engine capacity of not exceeding 25 cubic centimeters are excluded from the definition of motor vehicle. The term motor vehicle is defined to “mean” and to “include”. Therefore definition is extensive. Unless any vehicle falls within the exclusive part of the definition, it is not possible to countenance any plea that a particular vehicle is not a motor vehicle. If it is shown that it is mechanically propelled and adapted for use upon the roads even for short duration or for limited purpose that would be sufficient to attract the definition of Section 2(28) of the MV Act. The dictionary clause of the MV Act also defines and describes various vehicles adapted or used for different purposes on the road. The contract carriage, educational institution bus, goods carriage, heavy goods vehicle, heavy passenger motor vehicle, invalid carriage, light motor vehicle, maxi cab, medium goods vehicle, medium passenger motor vehicle, motor cab, motor car, motor cycle, omni bus, private service vehicle, public service vehicle, stage carriage and transport vehicle have been defined and explained. Rule 2 of the Central Rules contain definitions of agricultural tractor, agricultural trailer, non-transport vehicle and battery operated vehicle. By the amendment vide GSR 642(E), dated 28.7.2000, the Central Government inserted the definition of CEV in Rule 2(ca) to the Central Rules which is quoted above. The Taxation Act does not contain the definition of motor vehicle or for that matter the definition of various categories and types of motor vehicles. Section 2(j) of the Taxation Act is to the effect that, “words and expressions used but not defined” in the Taxation Act, “shall have the meanings assigned to them in the Motor Vehicles Act”. Therefore, unless and until CEVs come with the ambit of Section 2(28) of the MV Act, they cannot be treated as motor vehicles used or kept for use in the public place within the expression used in Section 3(1) of the plenary legislation i.e., the Taxation Act. As rightly contended by the State, the tax levied on motor vehicles under Section 3(1) of the Taxation Act does not violate Article 265 of the Constitution and if the object of tax is classified by reference to another provision in the Central Act, the same does not violate any Constitutional norm. The submissions of the petitioners and the State in this regard can be conveniently dealt with under three sub-headings: (i) Interpretation of Section 2(28) of the MV Act; (ii) Effect of Rule 2(ca) of the Central Rules; and (iii) Interpretation of Section 2(j) of the Taxation Act. (i) Interpretation of Section 2(28) of the MV Act The analysis of Section 2(28) of the MV Act as above receives support from the decisions of the Supreme Court. We propose to examine, with reference to the decided cases, the tests to be applied to know whether a vehicle is a motor vehicle as defined under Section 2(28) of the MV Act. Precedents and Principles It is crucial that a mechanically propelled vehicle must have been adapted for use on the roads. Bolani Ores Limited v State of Orissa[47] is a case dealing with dumpers, rockers and tractors. The question was whether these are motor vehicles within the meaning of Bihar and Orissa Motor Vehicles Taxation Act, 1930. Section 2(c) therein incorporated the definition of motor vehicle as defined in Section 2(18) of the MV Act, 1939. The definition is in pari materia with Section 2(28) (except for a minor part of the definition dealing with vehicles with an engine capacity of 25 cubic centimeters). While construing the same, the Supreme Court held that the dumpers and rockers are registerable under the MV Act but are not taxable under Taxation Act as long as they are working within the enclosed premises of the owner. The relevant observations are as follows. The question would then arise, are dumpers, rockers and tractors suitable or fit for use on roads? It is not denied that these vehicles are on pneumatic wheels and can be moved about from place to place with mechanical power. The word “vehicle” itself connotes that it is a contrivance which moves. A vehicle which merely moves from one place to another need not necessarily be a motor vehicle within the meaning of Section 2(18) of the Act. It may move on iron flats made into a chain such as a caterpillar vehicle or a military tank. Both move from one place to another but are not suitable for use on roads. It is not that they cannot move on the roads but that they are not adapted, made fit or suitable for use on roads. They would, if used, dig and damage the roads. ... ... Where a vehicle is adapted for use upon roads and though it is not driven on the public roads or in a public place even then if it carries goods or passengers which may not be for hire or reward or the passengers may be friends or relatives of the owner or the goods may belong to the owner and plying in a place to which the public has, as a matter of right, no access, it nonetheless cannot be driven without its being registered or without the driver holding a licence to drive such a vehicle. (emphasis supplied) I n State of Mysore v Sundaram Motors Private Limited[48], a question arose whether vehicles passing through the State of Mysore, were exigible to tax under Section 3 of the Mysore Motor Vehicles Taxation Act, 1957. When the transport authorities had demanded tax, the dealer of the motor vehicles was successful in the challenge before the High Court. In the State’s appeal before the Apex Court, the plea was that the vehicles were exigible to tax as they were suitable for use on roads and substantially used the roads in the State by traversing a distance of 400 miles. The plea was rejected and the appeal was dismissed observing as below. The word “kept” has not been defined in the Taxation Act. We have, therefore, to interpret it in its ordinary popular sense, consistently with the context. The word “kept” has been repeatedly used in the section. In sub-section (1), it occurs in association with the phrase “for use on roads”. In that context, the ordinary dictionary meaning of the word ‘keep in’ is to retain’, ‘to maintain’ or ‘cause to stay or remain in a place’,‘ to detain’, to stay or continue in a specified condition, position, etc.’. In association with the use of the vehicle, therefore, the word “kept” has an element of stationariness. It is something different from a mere state of transit or a course of journey through the State. It is something more than a mere stoppage or halt for rest, food or refreshment, etc., in the course of transit through the territory of the State. In Travancore Tea Estates Co. Ltd., v State of Kerala[49] the appellant questioned the tax liability on tractors, trailors and lorries on the ground that they were not used or kept for use on the roads in Kerala State. The learned Single Judge as well as the Division Bench denied the relief. Before the Supreme Court the question was whether the tax can be levied, when the motor vehicles are used within the estate, and not used on public roads. A three Judge Bench answered the issue in the negative holding that, “the tax is only exigible on vehicles used or kept for use on public roads … (and) if the requirement contemplated under the Act is not satisfied the registered owner or person in possession or control of the vehicle would not be entitled to claim any exemption from payment of tax”. In case of dispute whether the motor vehicles are “used or kept for use” in the State how does the “relevant fact in issue” need to be proved? The Supreme Court indicated the burden and requirement of proof in the following passage. If the words “used or kept for use in the State” are construed as used or kept for use on the public roads of the State, the Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II. If the vehicles are suitable for use on public roads they are liable to be taxed. In order to levy a tax on vehicles used or kept for use on public roads of the State and at the same time to avoid evasion of tax the legislature has prescribed the procedure. Sub-section (2) of Section 3 provides that the registered owner or any person having possession of or control of a motor vehicle of which a certificate of registration is current shall for the purpose of this Act be deemed to use or keep such vehicles for use in the State except during any period for which the Regional Transport Authority has certified in the prescribed manner that the motor vehicle has not been used or kept for use. Under this sub-section there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State. This provision safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State. At the same time the interest of the bona fide owner is safeguarded by enabling him to claim and obtain a certificate of non-user from the prescribed authority. (emphasis supplied) International Tourist Corp. v State of Haryana[50] deals with the vires of Section 3(3) of Punjab Passengers and Goods Taxation Act, 1952. The said provision taxed the passengers and goods carried by a motor vehicle on a joint route. The owners of the vehicles operated contract carriages between Delhi and Jammu. In the course of the journey, the vehicles traveled through the State of Haryana on NH-1, and the State levied tax which was challenged. The Supreme Court dismissed the writ petitions observing as under. In the Motor Vehicles Taxation Acts of several States the charging section generally runs as follows: “There shall be levied and collected on all motor vehicles used or kept for use in the State a lax at the rate fixed by the State Governments....” In these cases the taxable event is “keeping for use” and alternately user within the State. Once the motor vehicle is used within the State the taxable event occurs and the tax is attracted. The decision in State of Mysore v. T.V. Sundaram Iyengar & Sons (P) Ltd., AIR 1980 SC 148 : ((1980) 1 SCC 66, has no application to such cases. … … In some States, the Motor Vehicles Taxation Acts provide for payment of tax in the event only of vehicles being “kept for use in the State” and provide for no other alternative taxable event. In such cases the principle of our decision in State of Mysore v T.V. Sundaram Iyengar & Sons (P) Ltd., may be attracted. In State of Karnataka v K.Gopalakrishna Shenoy[51] a question arose whether the owner of a motor vehicle is liable to pay tax when it is under repair, without fitness certificate. The Supreme Court ruled that the charging section in the Taxation Act has to be construed on its own force and not with reference to Section 38 of the MV Act, 1939, (Section 56 in MV Act, 1988), which makes it mandatory for every transport vehicle to carry a certificate of fitness issued by the prescribed authority. In other words, an owner of the motor vehicle cannot escape liability to tax even if the vehicle is under repair without a certificate of fitness unless the owner claims refund of tax under the relevant provision on the ground that the vehicle has not been used for any period, not being less than a month. It was further held that, when once the certificate of registration under the MV Act is current, it shall be deemed that the vehicle is suitable for use on the road. It was observed as follows. It, therefore, follows that the same meaning should be given to those words occurring in Section 3(1) and the Explanation also. The resultant position that emerges is that Section 3(1) confers a right upon the State to levy a tax on all motor vehicles which are suitably designed for use on roads at prescribed rates without reference to the roadworthy condition of the vehicle or otherwise. Section 4 enjoins every registered owner or person having possession or control of the motor vehicle to pay the tax in advance. The Explanation to Section 3(1) contains a deeming provision and its effect is that as long as the Certificate of Registration of a motor vehicle is current, it must be deemed to be a vehicle suitable for use on the roads. The inevitable consequence of the Explanation would be that the owner or a person having control or possession of a motor vehicle is statutorily obliged to pay the tax in advance for the motor vehicle as long as the Certificate of Registration is current irrespective of the condition of the vehicle for use on the roads and irrespective of whether the vehicle had a certificate of fitness with concurrent validity or not. (emphasis supplied) Central Coal Fields v State of Orissa[52], further clarifies the legal position as below (specifically with reference to dumpers and rockers). ... which indicate prominently one factor that these Dumpers run on tyres, in marked contrast to chain plates like caterpillars or military tanks. By the use of rubber tyres it is evident that they have been adapted for use on roads, which means they are suitable for being used on public roads. The mere fact that they are required at places to run at a particular speed is not to detract from the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles make it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the Dumpers or Rockers as suggested are heavy and cannot move on the roads without damaging them is not to say that they are not suitable for use on roads. The word ‘adapted’ in the provision was read as ‘suitable’ in Bolani Ores case by interpretation on the strength of the language in Entry 57, List II of the Constitution. (emphasis supplied) I n State of Kerala v Aravind Ramakant Modawdakar[53], the increase of the quarterly tax on inter-state contract carriage vehicles was successfully assailed in the High Court as discriminatory when there is no such increase of tax on intra-State vehicles. The Supreme Court allowed the appeals of the State observing as follows. It is also an admitted fact that under sub-section (1) of Section 3 of the Act, the State has power to levy tax on every motor vehicle used or kept for use in the State at the rates specified for such motor vehicles in the Schedule to the Act. … … It is also a settled position in law that the actual user of the road by the vehicles which are covered by the requisite permits is not always a relevant factor since the taxable event under Section 3(1) of the Act occurs when the vehicle is used or is kept for use in the State. Therefore, once the vehicle becomes liable for payment of tax the extent and quantity of use by the vehicle is not a decisive factor for the purpose of levy of tax as could be seen from the judgment of this Court in the case of International Tourist Corpn. v State of Haryana, (1981) 2 SCC 318 : AIR 1981 SC 774. (emphasis supplied) I n Biju Joseph v State of Kerala[54], the question was whether excavators and road rollers are motor vehicles under Section 2(28) of the MV Act, exigible to tax under the Kerala Taxation on Entry of Motor Vehicles into Local Areas Act. The Division Bench of Kerala High Court followed Bolani Ores and Central Coal Fields and held that the words ‘adapted for use upon roads’ have to be interpreted as “suitable or fit for use on the roads”. In view of the fact that the excavators and road rollers are fitted with rubber tyres and move from one place to another, it was held that they are suitable for being used on the roads. It is apt to extract the following passage the Judgment. The excavator loader mounted on four wheels is mobile digging and loading machines. It is suitable to move from one place to another. This vehicle is fitted with four rubber tyres. It is capable of being driven at a speed of 30 Kms., per hour. It is provided with brakes and parking brakes as in the case of any other vehicles. It has a steering system, road lights, direction indicators, rear view mirror, front screen viper, horns etc. The above provisions make it suitable for being used on the roads. Any reasonable person looking at these vehicles could think that the plying of the vehicles on the road would be one of the normal uses of the vehicles. Therefore, accepting the decision of the Division Bench we find that the excavator is a motor vehicle. Hence, we repel the said argument of the counsel for the appellants. ... Regarding road rollers also, the Court held that they are motor vehicles on the following reasons. Ext.P.4 certificate of road worthiness has been issued in Form No.22 under the Rules 47(g) and 127, which would go to show that the vehicle compiles with the provisions of the MV Act. Road roller is used for crushing and smoothing road surface which is part of the excavation of the works contract. It is admitted that road rollers are to be registered under the MV Act. There is nothing to show that road rollers are of a special type adapted for use only in factory or enclosed premises. (emphasis supplied) I n Bose Abraham v State of Kerala[55] (appeal against Biju Joseph), the Supreme Court held as follows. We hold that the excavators and roadrollers are motor vehicles for the purpose of the Motor Vehicles Act and they are registered under that Act. The High Court has noticed the admission of the appellants that the excavators and roadrollers are suitable for use on roads. However, the contention put forth now is that they are intended for use in the enclosed premises. Merely because a motor vehicle is put to a specific use such as being confined to enclosed premises, will not render the same to be a different kind of vehicle. Hence, in our view, the High Court has correctly decided the matter and the impugned order does not call for any interference by us. However, the question whether any motor vehicle has entered into a local area to attract tax under the Entry Tax Act or any concession given under the local Sales Tax Act will have to be dealt with in the course of assessment arising under the Entry Tax Act. (emphasis supplied) The State of Gujarat inserted Section 3A in the Bombay Motor Vehicles Tax Act for levy and collection of tax on contract carriages used or kept for use in the State. The High Court restrained the State authorities from recovering any tax from the owners of contract carriages, which were kept, but were not being used. Allowing State appeal in State of Gujarat v Akhil Gujarat Pravasi V.S. Mahamandal[56], the Apex Court ruled that, “if a vehicle is “used” or is “kept for use” in the State, it becomes liable for payment of tax and “the actual use or quantum of use is not material”, the provision for refund of tax does not mean that the legislature can only make a provision for levy of tax which is limited for the period of actual use and that there is no warrant to hold that tax cannot be levied during the period the vehicle is not put to use in the State. In M/s.Vijaya Traders, this Bench, after referring some of the above precedents, summarized the following general tests to be applied to decide whether a vehicle is a motor vehicle within the meaning of Section 2(28) of the MV Act. (i) Every vehicle adapted for use upon roads is motor vehicle; (ii) If any vehicle is registered under Chapter VI of the MV Act, and is required to obtain approvals and fitness certificates thereunder, it would lead to an inference that it is a motor vehicle; (iii) When a vehicle is adapted for use upon roads even though it is not driven on the public roads or in a public place and it cannot be driven without obtaining licence – it is certainly a motor vehicle; (iv) The word ‘adapted’ in Section 2(28) of the MV Act has to be read as ‘suitable for use on the roads’. The mere fact that they are such which do not move on the roads by reason of their weight or slow movement, does not mean that they are not suitable for use on roads. Whether or not it moves on the roads if it is suitable to move on the roads, it is a motor vehicle; and (v) Merely because a motor vehicle is put to a specific use, such as being confined to enclosed premises will not render the same to be a different kind of vehicle. The steering system, rear lights, direction indicators, rear view mirror, front screen viper, horns, brakes, parking brakes etc are some of the factors which may have to be considered before drawing appropriate inferences. (ii) Effect of Rule 2(ca) of the Central Rules The dictionary clause in MV Act does not define CEV. But various types of vehicles are defined as to mean motor vehicles with reference to specific description, use and purpose. All the types of vehicles defined or described in the Act are certainly motor vehicles within the meaning of Section 2(28) of the MV Act and legislature definition cannot be faulted for the legislature has power to define a word even artificially (Feroz N.Dhotiwala v P.M.Wadhwani[57]). In ‘Construction Planning, Equipment, and Methods’ by Robert L. Peurifoy and Clifford J.Schexnayder (Mc Graw Hill, 6th edn., 2002), authors classified Construction Equipment Vehicle into various categories, namely, (i) Dozers; (ii) Scrapers; (iii) Excavators (including Front Shovels, Hoes, Loaders, Drainage Machines, Backhoe-Loaders, Vac Excavators); (iv) Finishing Equipment; (v) Hauling Equipment (Trucks); (vi) Compressed Air Equipment; (vii) Drilling Equipment; (viii) Blasting Equipment; (ix) Aggregate Production Equipment; (x) Asphait Mix Equipment; (xi) Concrete Equipment; and (xii) Cranes. This equipment is not self-propelled. The motion is supplied by the hydraulic system drawing hydraulic pressure from a compressor, which derives dynamic force to run, from the engine fitted to the chassis of a motor vehicle. The equipment is so heavy that it cannot be, without difficulty, moved often from place to place. So as to facilitate its free movement and provide accessibility to the areas of work, the construction equipment is always fitted in a specially designed motor vehicle which basically contains a chassis, the wheels and the engine to move the vehicle and the equipment integrated into the vehicle. There could be possibility where the equipment used in the construction like handheld drillers and vibrators, detachable compressors, mini concrete mixtures etc., do not require an LMV/HMV for moving. They can even be carried in detached mode on small vehicles from place to place. In such event such equipment itself cannot be a “motor vehicle”. As per Section 2(ca) of the Central Rules, all rubber tyred (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled vehicles designed for off-highway operations in mining, industrial undertaking, irrigation and general construction but modified and manufactured with “on or off” or “on and off” highway capabilities are CEVs. The explanation to Rule 2(ca) of the Central Rules further clarifies that CEVs are non-transport vehicles with a speed not exceeding 50 kms per hour the driving on the road of which is incidental to the main off-highway function. But, the vehicles designed and adapted for use in the enclosed premises, factory or mine other than road network, not equipped to travel on public roads on their own power are not CEVs. Descriptively; certainly not exhaustively – Rule 2(ca) of the Central Rules refers to eleven categories of CEVs namely, excavator, loader, backhoe, compactor roller, dumper, motor grader, mobile crane, dozer, fork lift truck and self-loading concrete mixer. The Rule itself makes a distinction between the two types of CEVs as rubber tyred, rubber padded or steel drum wheel mounted and self-propelled designed for off-highway operations in four categories of activity but modified and manufactured with highway capabilities. The second type of CEVs are those which are not equipped to travel on public roads on their own power and designed and adapted for use in enclosed premises, factory or mine other than road network. The highway capability of a CEV for use on road network is a prominent feature to distinguish between CEVs which are motor vehicles and CEVs which are not. The definition of CEV, therefore, is not vague nor lacks in detail as submitted by some of the Counsel. Further the vehicles which carry equipment for operations in mining, irrigation, industry or general construction are CEVs because they carry construction equipment. For execution of works in different operations they have to move on the road network and are modified or manufactured with “on or off” or “on and off” highway capabilities for use of road network and carrying various construction equipment of the description given or any other construction equipment and which moves on rubber tyred including pneumatic tyred, rubber padded or steel drum wheel mounted or self-propelled capacity are CEVs. Therefore, one has to first decide whether a vehicle is motor vehicle or not. In the next step, it should be decided with reference to the requirement in Rule 2(ca) of the Central Rules to be called a CEV. (iii) Status of Delegated Legislation Whether Rule 2(ca) of the Central Rules has to be read as forming part of the MV Act? The answer must be in the affirmative. The precedents are galore and they do not admit any doubt that the Rules made by way of a delegated legislation form part of the parent Act; they have to be read as integral to the parent Act and the same Rules of interpretation would apply to the Rules as well. In the very well structured State Governance, the division of functions among the three organs of the State, whether or not there is strict separation of powers, is well recognized. It is the function of the legislature to make law. Why then the legislature finds it necessary to delegate the power to make law. The reasons for delegating legislative power are summarized in Section 50 of Francis Bennion. It is apt to quote the same. a) Modern legislation requires far more detail than Parliament itself has time or inclination for. For example detailed forms may be needed. b) To bring a complex legislative scheme into full working operation, consultation with affected interests is required. This can best be done after Parliament has passed the outline legislation, since it is then known that the new law is indeed to take effect and what its main features are. c) Some details of the overall legislative scheme may need to be tentative or experimental. Delegated legislation affords an easy means of adjusting the scheme without the need for further recourse to Parliament. d) Within the field of a regulatory Act new developments will from time to time arise. By the use of delegated legislation the scheme can be easily altered to allow for these. e) If a sudden emergency arises it may be essential to give the executive wide and flexible legislative powers to deal with it whether or not Parliament is sitting. The following observations of the Supreme Court in Sukhdev Singh v Bhagatram Sardar Singh Raghuvanshi[58] are also to the same effect. The justification for delegated legislation is three fold. First, there is pressure on parliamentary time. Second, the technicality of subject-matter necessitates prior consultation and expert advice on interests concerned. Third, the need for flexibility is established because it is not possible to foresee every administrative difficulty that may be called for after the statute has begun to operate. Delegated legislation fills those needs. It is not necessary to list the permissible and impermissible delegable legislative areas. Suffice to mention that delegated legislation must comply with statutory essentials. It ought to be intra vires the plenary legislation. The delegated legislation by way of Rules, Regulations and sometimes byelaws is made for carrying out the purpose of the Act and, therefore, any deviation from the parent Act would be ultra vires (Indian Express Newspapers Bombay (P) Ltd., v. Union of India[59], Kunj Behari Lal Butail v State of Bihar[60] Global Energy Ltd v Central Electricity Regulatory Commission[61]). What would be stature and status of the delegated legislation validly made? Do they have separate existence or integral to the main Act? The Rules made by the delegated authority have force of law. They are indeed an important source of law. The effect of delegated legislation is the same as if it were enacted in main Act. This principle has its origin in the Court of Appeal Judgment of Lord Chief Justice Coleridge In re Reverend Thomas Pelham Dale[62] where it was held that, “so far as the rules and orders, including the forms, form to the statute and are not inconsistent with it, the rules, orders and forms have Parliamentary authority”. It is not rare that some times the legislative enactment itself contains a clause that the rules made by the delegated authority shall have the same effect as if they are enacted in the Act. Even in the absence of such explicit legislative prescription the rules made in exercise of the power by the executive or any other agency are considered as forming part of the main Act. The Indian leading case on this principle is the Constitution Bench decision of the Supreme Court in State of U.P. v Baburam Upadhya[63]. I n Sukhdev Singh v Bhagatram Sardar Singh[64], State of Tamil Nadu v Hind Stone[65], General Officer Commanding-in-Chief v Subhash Chandra[66], and National Insurance Co. Ltd v Swaran Singh[67], the Supreme Court reiterated the same principle. We may briefly refer to these authorities. Baburam Upadhya, a Sub-Inspector of Police in Uttar Pradesh, was charged by the Superintendent of Police for misappropriation. The S.P. imposed the punishment of reduction to the lowest grade. The Deputy Inspector General of Police modified the order into one of dismissal. The delinquent officer’s appeal and revision failed but Allahabad High Court quashed the order of dismissal for non- observance of Para 486 of the Police Regulations. The said regulation provided that every information received by the Police relating to the commission of a cognizable offence by a Police officer shall be dealt with in the first place under Chapter XIV of Criminal Procedure Code, 1973. This was not followed before dismissing Baburam. Before the Supreme Court, the State contended that the Regulations made by the Government in exercise of the power conferred under the U.P. Police Act are administrative directions for the exercise of pleasure by the concerned authorities and that any breach of those Regulations cannot possibly confer any right or give a cause of action to the aggrieved. This was not accepted. The Apex Court held that the non-compliance with Para 486 (1) of the Regulations would vitiate the order of dismissal. The rule from Maxwell on Interpretation of Statutes was quoted with approval, which reads, thus, “the Rules made under a Statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act and are to be judicially noticed for all the purposes of construction or obligation”. In Hind Stone the Government granted leases under the Tamil Nadu Minor Mineral Concession Rules, 1959 for quarrying black granite. When they were about to expire all the lessees applied for renewal. In the meanwhile the Government inserted Rule 8C to the Rules whereunder grant of lease for quarrying black granite in favour of private persons was banned creating monopoly in favour of State owned Corporation. The challenge to Rule 8C succeeded in Madras High Court. The Government’s appeal was allowed by the Supreme Court. Inter alia it was contended that Rule 8C contravened Articles 301 and 303 of the Constitution. Repelling the contention, the Apex Court held that the Rule 8C forms part of the Mines and Minerals (Regulation and Development) Act and, therefore, regulatory law within the meaning of Article 302 of the Constitution. The relevant observations are as follows. The Mines and Minerals (Regulation and Development) Act is a law enacted by Parliament and declared by Parliament to be expedient in the public interest. Rule 8C has been made by the State Government by notification in the official Gazette, pursuant to the power conferred upon it by Section 15 of the Act. A statutory rule, while ever subordinate to the parent statute, is, otherwise, to be treated as part of the statute and as effective. … … So, statutory rules made pursuant to the power entrusted by Parliament are law made by Parliament within the meaning of Article 302 of the Constitution. To hold otherwise would be to ignore the complex demands made upon modern legislation which necessitate the plenary legislating body to discharge its legislative function by laying down broad guidelines and standards, to lead and guide as it were, leaving it to the subordinate legislating body to fill up the details by making necessary rules and to amend the rules from time to time to meet unforeseen and unpredictable situations, all within the frame work of the power entrusted to it by the plenary legislating body. (emphasis supplied) In Sukhdev Singh the Constitution Bench reiterated the legal position in the following passage. Subordinate legislation has, if validly made, the full force and effect of a statute. That is so whether or not the statute under which it is made provides expressly that it is to have effect as if enacted therein. If an instrument made in the exercise of delegated powers directs or forbids the doing of a particular thing the result of a breach thereof is, in the absence of provision to the contrary, the same as if the command or prohibition had been contained in the enabling statute itself. (emphasis supplied) In Subhash Chandra, the respondent was appointed as a Doctor in Cantonment General Hospital, Lucknow. As per the relevant service conditions, his services were not transferable. By notification dated 16.12.1972, in exercise of powers under Section 280 of the Cantonment Act, 1924, the Central Government inserted Rule 5-C of the Cantonment Funds Servant Rules, 1937 empowering Commanding-in-Chief or other designated authorities to transfer employees from one post in one Board to another post in another Board. By order dated 27.10.1986 the respondent was transferred from Lucknow to Cantonment Hospital, Varanasi. He assailed Rule 5- C and the transfer order. The Allahabad High Court struck down Rule 5-C holding that it is beyond the rule making power of the Central Government as contained in Section 280(2)(c) before its amendment in 1983 which did not confer the power to frame Rules regarding conditions of service which necessarily include transfer of employees. It was also held that even under the amended Rule, the Central Government will not be entitled to frame Rules to transfer employees from one Cantonment Board to another Cantonment Board within the State. The Central Government urged that Rule 5-C became part of the statute and accordingly the question of its being contrary to the provisions of the Cantonment Act does not arise. The Apex Court did not accept this plea observing thus. It is well settled that rules framed under the provisions of a statute form part of the statute. In other words, rules have statutory force. But before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely (1) it must conform to the provisions of the statute under which it is framed; and (2) it must also come within the scope and purview of the rule making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void. In Swaran Singh, the Supreme Court considered the extent and scope of Section 149(2)(a)(ii) of the MV Act. As per the said provision, an insurer of a motor vehicle shall be entitled to defend any action for compensation inter alia on the ground that there has been breach of a condition excluding driving by a named person or persons or any person who is not “duly licensed”, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. Section 3 of the MV Act prohibited any person from driving a motor vehicle in public place unless he holds “an effective driving licence” whereas Section 149(2)(a)(ii) of the MV Act was differently worded i.e., “duly licensed”. The Supreme Court considered the issues whether a person can be said to have been “duly licensed” when (i) the driver did not obtain any licence to drive a motor vehicle; (ii) the person has been granted licence for one type of vehicle but was driving another type of vehicle; (iii) the licence is found to be fake; and (iv) the person driving the vehicle was only having a learner’s licence. In that connection, while holding that a person holding a learner’s licence is also entitled to drive the vehicle and he would not be a person who is not “duly licensed”, the Supreme Court observed as under. The provisions contained in the said Act provide also for grant of driving licence which is otherwise a learner's licence. Section 3(2) and 6 of the Act provides for the restriction in the matter of grant of driving licence. Section 7 deals with such restrictions on granting of learner's licence. Section 8 and 9 provide for the manner and conditions for grant of driving licence. Section 15 provides for renewal of driving licence. Learner's licences are granted under the rules framed by the Central Government or the State Governments in exercise of their rule making power. Conditions are attached to the learner's licences granted in terms of the statute. A person holding learner's licence would, thus, also come within the purview of \"duly licensed\" as such a licence is also granted in terms of the provisions of the Act and the rules framed thereunder. It is now a well-settled principle of law that rules validly framed become part of the statute. Such rules are, therefore, required to be read as a part of main enactment. It is also well-settled principle of law that for the interpretation of statute an attempt must be made to give effect to all provisions under the rule. No provision should be considered as surplusage. (emphasis supplied) The Rules made in conformity with the provisions of the parent statute shall form part of the statute and have to be interpreted as the provisions of the statute. Rule 2(ca) of the Central Rules defining CEV, thus, is to be treated as part of the MV Act as Section 2(j) of the Taxation Act for the purpose of the definitions of words and expressions used therein adopts the meaning assigned to them in the MV Act. Therefore, Rule 2(ca) of the Central Rules defining CEV shall have to be read into Section 2(j) of the Taxation Act. The submission of the petitioners that the absence of definition of CEV in the MV Act does not permit reading of the definition of CEV in Section 2(j) of the Taxation Act cannot be accepted. Chapter V of the Central Rules regulates construction, equipment and maintenance of motor vehicles. Rule 92 of the Central Rules prohibits a person from using or causing or allowing to be used in any public place any motor vehicle which does not comply with the provisions of Chapter V. The Rules provide for dimensions of the vehicles, condition of tyres, design and structure of efficient breaking systems, steering, safety glasses, capability for moving forward and backward, wind screen wipers, signalling system, fitment of reflectors, deflection of lights, top lights and red light etc. So to say the design and operation of various systems in the motor vehicle are regulated by the Central Rules. Rules 93 (1A), 96A, 98A, 100 (3A), 101 (2A), 105 (3A), 105 (8A), 107A, 108A and 115A of the Central Rules specifically deal with various technical aspects of CEVs. Thus, the Central Rules for all purposes treat the self-propelled, rubber tyred, rubber padded, steel drum wheel mounted, excavators, loaders etc., as motor vehicles for the purpose of regulating their construction and maintenance. The maintenance standards may differ but by and large the CEVs and other motor vehicles are subjected to the same regulatory measures under the Central Rules. This would conclusively indicate that CEVs are motor vehicles within the meaning of Section 2(28) of the MV Act read with Section 2(j) of the Taxation Act. (iv) Interpretation of Section 2(j) of the Taxation Act As per Section 2(j) of the Taxation Act, words and expressions used but not defined therein shall have the meanings assigned to them in the MV Act. The term ‘motor vehicle’ is not defined in the Taxation Act. In addition, though the Schedules I, II and III prescribe different rates of quarterly tax/life tax in respect of various categories of vehicles, they are not defined. One has to necessarily look to the dictionary clause in the MV Act. The petitioners would contend that various definitions in the definition clause of the MV Act are incorporated by reason of Section 2(j) of the Taxation Act, the same meaning should be adopted as defined in the MV Act, 1988 ignoring any amendments. Sri B.Siva Rama Krishnaiah, the Counsel for the petitioner in W.P.No.9883 of 2011 does not dispute that Section 2(j) of the Taxation Act refers to the MV Act, 1988 only. He, however, contends that any subsequent amendments made to the MV Act cannot be read into Section 2(j) of the Taxation Act. According to him, Section 2(j) of the Taxation Act is ‘legislation by incorporation’. Learned Advocate General contends that Section 2(j) of the Taxation Act is ‘legislation by reference’ in which case all the amendments made to the MV Act would have to be read into Section 2(j) of the Taxation Act. Black’s Law Dictionary (sixth edition) describes “reference statutes” as “those which refer to other statutes and make them applicable to the subject of legislation. Their object is to incorporate into the Act of which they are part the provisions of other statutes by reference and adaption”. “Incorporation by reference” is described as “the method of making one documents of any kind become a part of another separate document by referring to the former in the latter, and declaring that the former shall be taken and considered as a part of the latter the same as if it were fully set out therein. If the one document is copied in length in the order it is called “actual incorporation”. In legislative drafting, it is a common device to incorporate earlier statute by reference rather than setting out similar provisions in full. (Francis Bennion, page 758). It is also common that some times an enactment incorporates into the Act a whole body of law as existed earlier. In legislation by reference, the law makers only refer to earlier statute declaring that the provisions of a legislation incorporated by reference shall be read as part of the statute. In legislation by incorporation, it is not only mere reference to earlier statute but all the provisions in verbatim are reproduced in the latter Act. In either case the provisions incorporated (either by reference or by verbatim reproduction) become part and parcel of the latter Act as if they had been transported into it. This fundamental difference between legislation by reference and legislation by incorporation has considerable bearing in the construction and interpretation of the subsequent Act. What is the effect of repeal or amendment of the earlier Act which is incorporated by reference or actual incorporation? When a statute is incorporated, by reference, into the second statute the repeal of the first statute by a third does not affect the second but where certain provisions from an existing Act have been incorporated by verbatim reproduction into subsequent Act, no addition to the former Act which is not expressly made applicable to the subsequent Act can be read into it. In such cases, the provisions so incorporated shall have to be construed ignoring any subsequent amendment to the Act the provisions from which are incorporated in the latter Act. In this regard, it is apt to quote the following elucidation from G.P. Singh (pp.326–327). A distinction has also been drawn between a mere reference or citation of one statute into another and incorporation. In the former case a modification, repeal or re-enactment of the statute that is referred will also have effect for the statute in which it is referred; but in the latter case any change in the incorporated statute by way of amendment or repeal has no repercussion on the incorporating statute. It is a question of construction whether a particular former statute is merely referred to or cited in a later statute or is wholly or partially incorporated therein. “The distinction between incorporation by reference and adaption of provisions by mere reference or citation is not too easy to highlight. The distinction is one of difference in degree and is often blurred. It is not necessary to burden this judgment by extracts from the precedents which are galore. It is, however, beneficial to quote the following from the latest judgment of the Constitution Bench of Supreme Court in Girnar Traders (3) v State of Maharashtra[68] One of the earliest instances, where the Privy Council, then responsible for the Indian judicial system, accepted the plea of “legislation by incorporation” and interpreted the statute accordingly, is in Secy. of State for India in Council v Hindusthan Coop. Insurance Society Ltd.(1930-31) 58 IA 259 : AIR 1931 PC 149, This judicial pronouncement was followed in different subsequent judgments and these doctrines were analysed in greater depth for bringing out the distinction between them. The judgment of the Privy Council was referred with approval by this Court in different judgments including Municipal Commissioners of Howrah v. Shalimar Wood Products (P) Ltd., AIR 1962 SC 1691, Bolani Ores Ltd. v. State of Orissa (1974) 2 SCC 777, Mahindra & Mahindra Ltd. v. Union of India, (1979) 2 SCC 529, Ujagar Prints (2) v. Union of India, (1989) 3 SCC 488, U.P. Avas Evam Vikas Parishad v. Jainul Islam, (1998) 2 SCC 467, Nagpur Improvement Trust v. Vasantrao, (2002) 7 SCC 657 and Maharashtra SRTC v. State of Maharashtra, (2003) 4 SCC 200. The principle that was enunciated by the Privy Council in Hindusthan Coop. Insurance Society Ltd (supra) stated: (IA p.267) “… where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition.” In Gauri Shankar Gaur v. State of U.P, (1994) 1 SCC 92, one member of the Bench of this Court, relied upon the principle stated in Hindusthan Coop. Insurance Society Ltd., (supra) and held that in a case of legislation by incorporation, subsequent amendment or repeal of the provisions of an earlier Act adapted cannot be deemed to have been incorporated in the adapting Act which may be true in the case of legislation by reference. This judgment was relied upon by another Bench of this Court in State of Maharashtra v. Sant Joginder Singh Kishan Singh., 1995 Supp.(2) SCC 475 . In the case of legislation by incorporation (i.e., verbatim reproduction of earlier statute), the subsequent amendment which repealed all the provisions of the earlier Act adapted, cannot be deemed to have been incorporated in the latter Act. But, if the earlier Act is only referred as applicable to latter Act, any amendment thereto would automatically become part of the Act which incorporated it by reference. Here, we may beneficially quote from P.C.Agarwala v Payment of Wages Inspector[69]. Legislation by referable incorporation falls into two categories. That is (i) where a statute by specific reference incorporates the provisions of another statute as at the time of adaption, and (ii) where a statute incorporates by general reference. The law concerning a particular subject has a genus. In the former case the subsequent amendments made in the referred statute cannot automatically be read into the adapting statute. But in the second category it may be presumed that the legislative intent was to include all the subsequent amendments also made from time to time in the generic law on the subject adapted by the general reference. Whether Section 2(j) of the Taxation Act is legislation by incorporation as contended by the petitioners’ counsel? There is no dispute that except stating that the words and expressions used in the Taxation Act shall have the same meanings assigned to them in the MV Act, none of the provisions of the MV Act, 1939 or the MV Act, 1988 much less the dictionary clause therein has been verbatim reproduced in the Taxation Act. As we have already mentioned earlier not only that a motor vehicle is not defined but the Taxation Act for the purpose of measure of tax mentions in its Schedules, various types of motor vehicles depending on their utility, design etc., under different heads. Therefore, we have no manner of doubt to hold that the provisions of the MV Act have been incorporated by reference. Any amendment made to the MV Act, 1939 or the MV Act, 1988 would have to be read as part of the Taxation Act by reason of Section 2(j) thereof. In New Central Jute Mills Co. Ltd v Assistant Collector of Central Excise[70], one of the questions considered by the Supreme Court was whether Section 12 of the Central Excise and Salt Act, 1944 incorporates provisions of the Sea Customs Act, 1878 or only makes reference to it? Section 12 of the Central Excise Act empowered the Central Government, by notification to make applicable, the provisions of the Sea Customs Act relating to the levy and exemption from customs duty, draw-back of duty, warehousing offences and penalties, confiscation etc., with such modifications and alterations as they may consider necessary. After repeal of the Sea Customs Act, it was contended by the appellants therein that it was not open to the Central Government to examine such power to apply Section 105(1) of the Customs Act, 1962. The Supreme Court negatived the contention and held that, Section 12 incorporated by reference only certain provisions of the Sea Customs Act. The relevant observations are as follows. Section 12 of the Act did not bodily lift, as it were, certain provisions of the Sea Customs Act, 1878, and incorporate them as an integral part of the Act. It only empowered the Central Government to apply the provisions of the Sea Customs Act, 1878, with such modifications and alterations as might be considered necessary or desirable by the Central Government for the purpose of implementation and enforcement of Section 3 of the Act. … … It is unnecessary to mention the other provisions because a comparison of the recognised formulae with the text of Section 12 of the Act shows that the provisions of the Sea Customs Act, 1878, were not meant to be incorporated in the Act and were only to be applicable to the extent notified by the Central Government for the purpose of the duty leviable under Section 3. In Bolani Ores Limited, the Supreme Court was concerned with the interpretation of Section 2(c) of the Bihar & Orissa Motor Vehicles Taxation Act, 1930 (BOMV Taxation Act) read with Section 2(18) of the MV Act, 1939. Section 2(3) of the BOMV Taxation Act defined ‘motor vehicle’ by adapting its meaning in Section 2(18) of the MV Act, 1939. The latter was amended by the Central Act 100 of 1956 but there was no corresponding amendment to Section 2(c) of the BOMV Taxation Act. The question arose as to whether CEVs like dumper, rockers, tractors, showels, drill masters, caterpillars etc., are motor vehicles for the purpose of the BOMV Taxation Act. When the BOMV Taxation Act adapted definition in the MV Act, 1939 there was no amendment thereto. The definition was enlarged and “vehicles, special type adapted for use only in factory or enclosed premises were added to the excluded category of motor vehicles”. The appellant’s contention was that the amended Section 2(18) of the MV Act, 1939 is inapplicable to the BOMV Taxation Act and that it is only the definition of motor vehicle, it existed prior to the Central Act 100 of 1956. The Supreme Court on construing Section 2(c) of the BOMV Taxation Act held that it is a piece of legislation by incorporation and, therefore, any amendment to Section 2(18) of the MV Act, 1939 would have no effect. The relevant observations are as follows. If this be the purpose and object of the Taxation Act, when the motor vehicle is defined under Section 2(c) of the Taxation Act as having the same meaning as in the Motor Vehicles Act, 1939, then the intention of the Legislature could not have been anything but to incorporate only the definition in the Motor Vehicles Act as then existing, namely, in 1943, as if that definition was bodily written into Section 2(c) of the Taxation Act. If the subsequent Orissa Motor Vehicles Taxation (Amendment) Act, 1943, incorporating the definition of ‘motor vehicle’ referred to the definition of ‘motor vehicle’ under the Act as then existing, the effect of this legislative method would, in our view, amount to an incorporation by reference of the provisions of Section 2(18) of the Act in Section 2(c) of the Taxation Act. Any subsequent amendment in the Act or a total repeal of the Act under a fresh legislation on that topic would not affect the definition of ‘motor vehicle’ in Section 2(c) of the Taxation Act. In Bharath Coop. Bank (Mumbai) Ltd v Coop. Employees Union[71], the employees union initiated action under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 alleging victimization in transferring eleven employees. The appellant raised an objection and the Industrial Court returned the complaint holding that the appropriate Government would be the Central Government. The employees union was, however, successful before the Division Bench of the High Court. Before the Supreme Court, a plea was taken by the Bank that the expression ‘Banking Company’ must be read in conjunction with the Section 5 of the Banking Regulation Act, 1949 (the BR Act) as amended in 1965. The employees’ contention was that as the definition of Banking Company in the Industrial Disputes Act, 1947 (the ID Act) had been bodily lifted from the BR Act, it cannot be treated as forming part of Section 2(bb) of the ID Act. The Supreme Court came to the conclusion that Section 2(bb) of the ID Act was legislation by incorporation and not legislation by reference to Section 5 and, therefore, the definition of Banking Company as it existed in the BR Act prior to the amendment in 1965 has to be applied. In that context, after referring to the English decisions in Wood’s Estate, ex parte Works and Buildings Commrs., In re[72], Secy. of State v Hindustan Coop. Insurance Society Ltd.[73], Clarke v Bradlaugh[74], and of the Supreme Court in Bolani Ores Ltd., Mahindra & Mahindra Ltd., v Union of India[75], U.P. Avas Evam Vikas Parishad v Jainul Islam[76], and P.C. Agarwala, the law was reiterated thus. ... ... if there is a mere reference to a provision of one statute in another without incorporation, then, unless a different intention clearly appears, the reference would be construed as a reference to the provision as may be in force from time to time in the former statute. But if a provision of one statute is incorporated in another, any subsequent amendment in the former statute or even its total repeal would not affect the provision as incorporated in the latter statute. Applying the principles as above, it has to be held that Section 2(j) of the Taxation Act does not bodily lift and incorporate the dictionary clause or the definition of motor vehicle as in the MV Act. It only makes a reference indisputably to the MV Act, 1939. By reason of Section 18 of the Andhra Pradesh General Clauses Act, 1891, the repeal of the MV Act, 1939 does not affect Section 2(j) of the Taxation Act and it has to be construed as referring to the MV Act, 1988. We, therefore, reject the submission of the learned Counsel in this regard and conclude that Section 2(j) of the Taxation Act defines ‘motor vehicle’ by reference and all relevant amendments to the MV Act, 1988 shall have to be made applicable to the Taxation Act. (v) Whether the tunnel drilling machines are CEVs? This issue is pertinent to W.P.Nos.9883, 9907, 9908, 9909, 10402, 10405, 11332 and 11398 of 2011 filed by M/s.UANMAS Infra Ltd as well as W.P.No.1690 of 2001 filed by M/s.PMP Engineering Limited, who are owners of Rocket Boomer L2Ds. They contend that the rocket boomer is exclusively utilized for the purpose of tunneling work and is operated electrically drilling work and often called Electro Hydraulic Rocket Boomer. It is described as machine permanently fixed on a chassis and the engine only provides mobility within the specified area or job site when drilling operation is started. The machine moves forward and backward and, therefore, the engine is fitted to the chassis along with tyres for free movement. The machine is carried from one place to another on a trailer to avoid vibrations on the vital parts of the machine. As its length is about 50 feet it cannot access the public roads freely and, therefore, it is not suitable and adapted for use on public roads and cannot be termed as CEV nor it falls within the definition of motor vehicle, as in Section 2(28) of the MV Act. These machines do not have registration nor insurance. They did not pay any tax. When the machines were seized by the Transport authorities after conducting check, they filed the writ petitions seeking declaration that rocket boomer machine is not a motor vehicle. In W.P.No.9883 of 2010, the Transport Commissioner has filed separate counter. Besides taking the pleas which are common to all the writ petitions, it is submitted that Drill Jumbo or Electro Hydraulic Drill Jumbo is a motor vehicle under Section 2(28) of the MV Act; the Drill Jumbo is mechanically propelled vehicle adapted for use upon roads and it falls within the meaning of CEV as defined in Rule 2(ca) of the Central Rules. The very fact that the engine is fitted on the chassis for free movement of the vehicle on the surface, which makes it a motor vehicle and CEV. The allegation of the petitioners that the tyres are fitted to enable the Drill Jumbo/Rock Booker to move freely forward and backward at the work site and the allegation that it is shifted from place to place on a trailer are not specifically denied. M/s.Raghunandan and Siva Rama Krishnaiah, the Counsel appearing for the petitioners in these matters would submit that Rocket Boomer moved perpendicular to the vehicle for digging a tunnel and it is always carried on trailers by dismantling into convenient units and, therefore, it is not a CEV. Alternatively they would contend that even if they are fitted with tyres and presumed to be suitable for use on the roads, as they are of special type adapted for use only in a specified area they fall within the exclusive part of the definition in Section 2(28) of the MV Act. In W.P.No.21442 of 2010 the owner is aggrieved by the proposal to levy life tax on a semi-trailer. The Counsel submits that semi-trailer is not a motor vehicle and it is always attached to a prime mover for carrying, in this case, a stone crusher. Therefore, it cannot be considered as a motor vehicle. “Semi-trailer” means a vehicle not mechanically propelled, which is intended to be connected to a motor vehicle and which is so constructed that a portion of it is superimposed on and a part of whose weight is borne by that motor vehicle (Section 2(j)). It is certainly a vehicle and it gains propulsion externally by reason of being attached to a prime mover. When a chassis and a trailer are included within the definition of a motor vehicle, we are unable to accept the plea that a semi-trailer is not a motor vehicle. At which stage of levy and collection of tax the question whether the vehicle is a motor vehicle or not should be decided? In Bose Ahraham, the Supreme Court ruled such a question has to be decided by the assessing authority in the course of the assessment under the Taxation Act. In doing so, the Rules in Chapter V of the Central Rules, various definitions in the MV Act and other Rules furnish sufficient guidance. In case of any doubt, it is still open to the assessing authority – be it Regional Transport Authority (RTA) or Transport Commissioner; to obtain the opinion of the manufacturers and experts in motor vehicle design. In this connection, the Circular Memo No.3943/E1/2010, dated 17.5.2010 issued by the Transport Commissioner clarifies that only chain mounted vehicles, which need not be registered, are not covered under the definition of motor vehicle and that all the other CEVs as defined under the Central Rules are required to be registered as non-transport vehicles on which life tax is to be levied. However, the trailers fitted with the equipment like rig or generator are liable to be registered as non-transport vehicles liable to pay quarterly tax on the basis of unladden weight. As per this Circular, all other vehicles are liable for life tax. The use to which a vehicle is kept in the State is also a relevant factor because, as held by the Supreme Court in Bolani Ores Ltd., even if vehicles are motor vehicles for the purpose of the MV Act, they cannot be taxed under the Taxation Act if they are specially adapted for use only in a factory or in any other enclosed premises. Mere exclusive use of a motor vehicle within a factory or enclosed premises would not by itself exclude such vehicles from the levy of tax. It is only when such vehicles are specially adapted and specially designed those vehicles go out of the purview of the Taxation Act. Generally even the vehicles which are of “off highway” capabilities, if they are fitted with rubber tyres or pneumatic tyres or rubber padded would be motor vehicles liable to tax. However, in case of any doubt like Rocket Boomers what we have held above with regard to the power of the RTA/Transport Commissioner to determine the question would hold good. (vi) Levy of life tax on Cranes, dumpers, excavators, road rollers, rockers In Central Coal Fields Ltd, CGM, Jagannath Area and Union of India v Chowgule and Co. (P) Ltd[77], the Supreme Court held that Dumpers and Rockers are CEVs. Therefore, the question raised in W.P.Nos.7331, 7353, 7507, 7682, 7755, 22394, 24503, 24551, 24570, 26100, 26194, 26596, 26597, 26614, 26626, 26651, 28276, 28282, 28704, 28705, 28707, 28712, 28713, 32275 and 32276 of 2010; and W.P.Nos.10782, 10957 and 11266 of 2011 is no more res integra. The plea of the petitioners that the dumpers are not CEVs must, therefore, fail. In M/s.Crane Owners Association v Union of India[78] cranes are held to be CEVs. In W.P.Nos.6264, 6405, 7148, 7235, 7240, 7314, 7315, 7638, 7732, 7829, 7981, 8059, 8061, 8236, 8354, 8928, 8996, 9126, 9171, 9182, 9271, 9394, 9493, 9541, 9582, 9755, 10001, 10034, 10049, 10286, 11304, 14011, 19833, 19837, 19844, 19894, 26082 and 32351 of 2010; and W.P.Nos.1113, 4823, 5330 and 14339 of 2011, the petitioners are owners of the cranes disputing that they are CEVs. In view of the decision of the Gujarat High Court, we are not inclined to accept the submission of the petitioners. Following the reasoning of the Gujarat High Court, we hold that cranes are CEVs. In Bose Abraham and Government of Andhra Pradesh v Road Rollers Owners Welfare Association[79], the Supreme Court held that excavators and road rollers are CEVs and are liable to charge under the Taxation Act. The petitioners, in W.P.Nos.6752, 6919, 7209, 7238 (3DX Excavator), 9087, 9182, 9252, 9313, 10216, 10243, 10312 (Drumpen Excavator), 10346 and 26753 (Road Roller) of 2010, challenge that their vehicles are not CEVs. In view of the above two decisions, the petitioners’ plea must fail. Therefore, we hold that Road Rollers and Excavators are CEVs and are liable to tax under the third proviso to Section 3(2) of the Taxation Act. In W.P.Nos.5984, 6057, 6082, 6094, 6214, 6232, 6251, 6270, 6290, 6439, 6575, 6593, 6725, 6731, 6780, 6800, 6810, 6845, 6906, 6918, 7041, 7078, 7088, 7094, 7121, 7134, 7138, 7183, 7194, 7199, 7221, 7222, 7223, 7231, 7239, 7328, 7351, 7393, 7404, 7414, 7459, 7467, 7475, 7483, 7519, 7542, 7543, 7544, 7550, 7562, 7595, 7633, 7635, 7643, 7645, 7646, 7648, 7649, 7676, 7682, 7709, 7713, 7715, 7721, 7775, 7856, 7875, 7892, 7897, 7959, 8036, 8094, 8125, 8136, 8192, 8307, 8312, 8315, 8378, 8421, 8425, 8427, 8481, 8504, 8735, 8737, 8787, 8803, 8870, 8893, 8895, 8976, 9147, 9177, 9221, 9268, 9272, 9275, 9292, 9300, 9313, 9330, 9331, 9455, 9776, 9813, 9905, 10014, 10056, 10089, 10331, 10334, 10415, 10418, 10435, 10547, 10719, 10724, 10788, 10853, 10868, 11147, 11151, 11452, 11955, 12113, 12151, 12274, 12992, 13978, 15046, 15078, 15434, 15478, 15484, 15650, 16091, 16312, 16758, 16772, 16775, 17890, 17892, 17986, 18196, 19719, 20095, 20863, 20896, 20899, 21177, 21463, 22076, 22160, 24148, 24481, 24513, 25274, 25747, 26317, 26655, 26775 and 28735 of 2010; and W.P.Nos.50, 83, 1437, 1939, 2950, 3512, 4852, 5629, 8848, 11332, 12991 and 14154 of 2011, it is contended that JCBs, Dumpers and Loaders are not CEVs. The JCB and Poclain are the names often used to describe a CEV with multiple capabilities, either as Excavator or Loader or Driller. They are capable of performing multi-fold functions depending on the requirements. All of them are fitted with tyres. From place to place they move by using self-propulsion supplied by the engine fitted on the chassis. They have wind wipers, headlights, backlights, indicators, breaking system, gears besides combustion to operate the pneumatic system which enables the excavator loading or drilling parts attached to the JCB to function. They are in our considered opinion certainly motor vehicles and fall within the definition of CEV under Rule 2(ca) of the Central Rules. If any of the petitioners challenge the decision of the Taxing authority, it is always open to them to produce necessary material to show that the equipment they own either not a motor vehicle or even if it is a motor vehicle, it is specially adapted for being used in a factory or in an enclosed premises. Of course if any of the CEVs are designed for use solely in mining industry or for agricultural operations, they have to necessarily pay life tax and seek exemption under Section 10 of the Taxation Act. In those cases, the owners of vehicles which are designed and are being used solely in mining and agricultural operations are entitled for refund after obtaining exemption as admitted by the State. After obtaining such exemption, it is always open to them to seek refund. In those cases, the owners of vehicles which are designed and are being used solely in agricultural and mining operations are entitled for refund before obtaining exemption is admitted by the State. Summary of findings On an analysis of the facts and principles of law as above, we may sum up our conclusion. (a) If an enactment substantially falls within the powers conferred by the Constitution upon the Legislature which enacted it, the same is not invalid even if it incidentally encroaches on matters assigned to another (Tansukh Rai Jain). (b) The object of tax may fall under two or more entries in the State List. If a State law attracts persons or things, which are incidentally also the subject matter of any other legislative entry, the question of vires does not arise. (c) “Motor vehicles” as goods attract tax with reference to different aspects. Even if the tax under the Taxation Act is considered – which is doubtful – as a tax also on the goods, fitted and carried by the Construction Equipment Vehicle (CEV), the same cannot be said to be beyond legislative competence. (d) Even if the construction equipment and the CEVs are presumed to be two separate things, the tax levied under Section 3(1) of the Taxation Act cannot be treated as tax on goods. It is a tax on “motor vehicles” suitable for use on roads which are kept for use or are used in the State of Andhra Pradesh. (e) A plea of impingement of the commerce clause can never be made to sustain a challenge to a Taxation law coming under Entry 57 of the State List. (f) Unless a State law directly and immediately restricts or impedes free flow and movement of trade, it does not impinge free trade right. The taxes levied do not amount to restriction unless they operate as a direct and immediate restriction on the free trade right. Even a State law is immune to challenge if such a law levies non- discriminatory taxes or taxes which are compensatory in nature. (g) The burden is always on the caveator to demonstrate that a State directly and immediately restricts free trade. The existence and non-existence of restrictions impeding free flow of trade is then a matter of inference from the material presented for scrutiny. (h) Compensatory tax is a sub-class of “a fee”. Unlike a tax it need not be progressive, but it has to be broadly proportional. As it is based on the principle of equivalence the value of quantifiable benefit is to be measured by the costs incurred for providing the facility/service which is the basis for reimbursement for recompense for the provider of the services/facilities. If the Government, by some positive action, confers upon individuals some measurable advantage, the community at large shall pay for it even if the benefits are intended to help the growth of trade. (Jindal Stainless (2)). (i) The burden to establish nexus between the compensatory tax and the benefits conferred is always on the State. (j) A tax, under the Taxation Act, is both compensatory and regulatory. When the State Legislature is competent under Entry 57 of the State List to make a law for levying taxes on “motor vehicles” suitable for use on the roads, it only means that the Constitution itself permitted making of such a law subject to any law made by the Parliament under Entry 35 of the Concurrent List. (k) Though the State may defend the law referable to Article 304 of the Constitution with reference to clauses (a) and (b) thereof, as well as on the principle of compensatory tax, the State would not be required to discharge the burden when a law is made with reference to Entry 57 of the State List. (l) The judicially evolved concept of compensatory tax, and the burden to prove the nexus, would be more severe in the case of a law which impinges the right under Article 301 of the Constitution. The burden would not be that heavy when the State defends a law which comes under Entry 57 of the State List. (m) Even though it is a compensatory tax, tax on motor vehicles facilitates trade, commerce and intercourse within the State by providing and managing roads in motorable condition. The levy is compensatory but it does not violate the provisions of Article 301 of the Constitution. (CGM, Jagannath Area). (n) There is no inconsistency or repugnancy between the third proviso and Section 3(1) of the Taxation Act. The third proviso to Section 3(2) fits into the general scheme of the plenary legislation. (o) The Court adopts dual review principles – either strict scrutiny as a primary review or intermediate/deferential secondary review. The nature of the power exercised by the public authority, the subject matter of the decision and the circumstances leading to the decision, are the deciding factors as to which review principle is to be adapted. (p) When a legislation is challenged on the ground that the State lacks competency, the Court has to insist upon the strict scrutiny test. A complaint of breach of fundamental rights or other constitutional provisions also call for primary review applying strict security. (q) A fiscal legislation is also subject to Article 14 of the Constitution. Absolute equality and justice is not attainable in tax laws and 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. (r) The Taxation law cannot be termed discriminatory because different tax rates are prescribed for different items, provided the said items form a distinct and separate group and there is a reasonable nexus between the classifications and the object of prescribing differential rates. (s) If the legislature adopts a broad classification, failure to mini- classify even if it is possible, does not infringe Article 14 of the Constitution. (Murthy Match Works). The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidation. (Malwa Bus Service). (t) 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 utilize the measures of taxation introduced by it for the purpose of achieving maximum social good. One has to trust the wisdom of the legislature in this regard. (Malwa Bus Service). (u) Unless a fiscal law is manifestly discriminatory, the Court should refrain from striking it down on the ground of discrimination. (Khandige Sham Bhat). (v) As the age of the vehicle is one of the factors which has gone into legislative determination of the rate of tax, it cannot be said that such differential rates are tainted with unreasonableness. (w) Persons, who are required to pay life tax a second time, when their vehicles are brought into the State again, can seek refund of the amount. All those who use the CEVs for mining operations can also seek refund of the life tax after obtaining exemption from the competent authority. (x) The two principles, to decide whether a motor vehicle is “used or kept for use in a public place in the State of Andhra Pradesh”, are: (i) if the motor vehicle is registered – though not always determinative - it is sure deemed that it is used or kept for use in the State (Travancore Tea Co. Ltd.); and (ii) the owner or person having control and possession over the motor vehicle is statutorily obliged to pay the tax in advance irrespective of the condition of the vehicle for use on the roads, and the liability to pay the tax in advance is not dependent on the quantity of use or the period during which it was used on the road. (K.Gopalakrishna Shenoy, CGM, Jagannath Area and Akhil Gujarat Pravasi V.S. Mahamandal). (y) The following general tests may be applied to decide whether a vehicle is a “motor vehicle” within the meaning of Section 2(28) of the MV Act. (M/s. Vijaya Traders). (i) Every vehicle adapted for use upon roads is a motor vehicle; (ii) If any vehicle is registered under Chapter VI of the MV Act, and is required to obtain approvals and fitness certificates thereunder, it would lead to an inference that it is a motor vehicle; (iii) When a vehicle is adapted for use upon roads even though it is not driven on the public roads or in a public place and it cannot be driven without obtaining licence – it is certainly a motor vehicle; (iv) The word ‘adapted’ in Section 2(28) of the MV Act has to be read as ‘suitable for use on the roads’. The mere fact that they are such which do not move on the roads by reason of their weight or slow movement, does not mean that they are not suitable for use on roads. Whether or not it moves on the roads, if it is suitable to move on the roads, it is a motor vehicle; and (v) Merely because a motor vehicle is put to a specific use, such as being confined to enclosed premises will not render the same to be a different kind of vehicle. The steering system, rear lights, direction indicators, rear view mirror, front screen viper, horns, brakes, parking brakes etc are some of the factors which may have to be considered before drawing appropriate inferences. (z) Rules, made in conformity with the provisions of the parent statute, form part of the statute and have to be interpreted as the provisions of the statute. Rule 2(ca) of the Central Rules defining “CEV” is to be treated as part of the MV Act. (za) As Section 2(j) of the Taxation Act, for the purpose of the definitions of words and expressions used therein, adopts the meaning assigned to them in the M.V. Act, Rule 2(ca) of the Central Rules defining “CEV” shall have to be read into Section 2(j) of the Taxation Act. “CEVs” are “motor vehicles” within the meaning of Section 2(28) of the MV Act read with Section 2(j) of the Taxation Act. (zb) The provisions of the MV Act have been incorporated by reference. Any amendment made to the MV Act, 1939 or the MV Act, 1988 would have to be read as part of the Taxation Act by reason of Section 2(j) thereof. (zc) Section 2(j) of the Taxation Act does not bodily lift and incorporate the dictionary clause or the definition of motor vehicle as in the MV Act. It only makes a reference indisputably to the MV Act, 1939. By reason of Section 18 of the Andhra Pradesh General Clauses Act, 1891, the repeal of the MV Act, 1939 does not affect Section 2(j) of the Taxation Act and it has to be construed as referring to the MV Act, 1988. Section 2(j) of the Taxation Act defines ‘motor vehicle’ by reference, and all relevant amendments to the MV Act, 1988 shall have to be made applicable to the Taxation Act. (zd) Mere exclusive use of a motor vehicle within a factory or enclosed premises would not, by itself, exclude such vehicles from the levy of tax. It is only when such vehicles are specially adapted and specially designed, do those vehicles go out of the purview of the Taxation Act. Even if these vehicles are of “off highway” capabilities, as they are fitted with rubber tyres or pneumatic tyres or rubber padded, they are, “motor vehicles” liable to tax. In case of any doubt the RTA/Transport Commissioner has the power to determine this question. (ze) “Dumpers”, “Cranes”, “Road Rollers”, “Excavators”, “Rockers”, “JCBs” and “Poclains” are CEVs and are liable to tax under the third proviso to Section 3(2) of the Taxation Act. (zf) “JCB” and “Poclain” are names often used to describe a CEV with multiple capabilities, either as “Excavator” or “Loader” or “Driller”. They are capable of performing multi-fold functions depending on the requirements. All of them are fitted with tyres, and are “Motor vehicles” and fall within the definition of “CEV” under Rule 2(ca) of the Central Rules. (zg) If any of the CEVs are designed for use solely in mining industry, or for agricultural operations, they have to pay life tax, and seek exemption under Section 10 of the Taxation Act. The owners of the vehicles, which are designed and are being used solely in mining and agricultural operations, are entitled for refund after obtaining exemption. Conclusion In the result, for the above reasons, we pass the following orders which would cover all the cases. The writ petitions being W.P.Nos.1690, 9883, 9907, 9908, 9909, 10402, 10405, 11332 and 11398 of 2011 filed by the owners of Rocket Boomer L2Ds (electro hydraulic drilling machines) are disposed of, with liberty to them to approach the jurisdictional Regional Transport Authority for determination of the question whether or not the Rocket Boomers used for tunneling and drilling works are motor vehicles. On such application being made, the RTA shall, if necessary, consult the manufacturers of those vehicles or experts in the field of construction equipment and determine the question as to whether the owners of those vehicles are liable to pay life tax after getting their vehicles registered under the MV Act. All the other writ petitions, subject to the observations made in this common order, shall stand dismissed. There shall be no order as to costs. ________________ (V.V.S. RAO, J) _______________________________ (RAMESH RANGANATHAN, J) September , 2011 NOTE: L.R. Copy be marked. (By order) YS THE HON'BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.173 OF 2010 AND BATCH ORDER OF THE COURT: Immediately after pronouncement, the counsel for the petitioners made an oral application seeking leave to appeal to the Supreme Court. We have given due consideration to the request. While determining the question whether the construction equipment vehicles are “motor vehicles”, we have applied ratio of various decisions of the Supreme Court. Even while upholding third proviso to sub-section (2) of Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963, as amended by Andhra Pradesh Motor Vehicles Taxation (Amendment) Act, 2010, we have followed the law laid down by the Supreme Court on various issues which have been considered. We are, therefore, of considered opinion that there is no substantial question of law as to interpretation of the Constitution or a substantial question of general importance involved in these cases. The oral application for a Certificate for Appeal to the Supreme Court is therefore rejected. _______________ (V.V.S. RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 28.09.2011 Ys/pln [1] Unreported judgment dated 27.9.1988 in W.P.No.3114 of 1987 and batch [2] 2002(6) ALD 548 (DB) : 2003(2) ALT 770 (DB) [3] (2005) 4 SCC 214 : AIR 2005 SC 3020 [4] (1983) 4 SCC 166 : AIR 1983 SC 937 [5] (2007) 7 SCC 527 : AIR 2007 SC 2990 [6] AIR 1962 SC 1044 [7] AIR 1966 SC 1780 [8] AIR 1990 SC 1927 [9] W.P.No.12455 of 2005 and batch, dated 22.6.2011 [10] (2005) 4 SCC 53 [11] AIR 1961 SC 232 [12] AIR 1962 SC 1406 [13] (a) Salonah Tea Company Limited v Superintendent of Taxes (1988) 1 SCC 401; (b) B.R.Enterprises v State of U.P., (1999) 9 SCC 700; (c) Jindal Stripe Limited v State of Haryana, (2003) 8 SCC 60; (d) State of H.P., v Yashpal Garg, (2003) 9 SCC 92; (e) Geo Miller & Co., (P) Limited v State of M.P., (2004) 5 SCC 209; (f) State of Punjab v Devans Modern Breweries Limited, (2004) 11 SCC 26; (g) Godfrey Phillips India Limited v State of U.P., (2005) 2 SCC 515; (g) Jindal Stainless Limited (2) v State of Haryana, (2006) 7 SCC 241 : (2006) 145 STC 544; and (h) Jaiprakash Associates Limited v State of M.P., (2009) 7 SCC 339. [14] (2006) 7 SCC 241 : (2006) 145 STC 544 [15] (1996) 10 SCC 676 [16] AIR 1999 SC 635 [17] AIR 1992 SC 1383 [18] (1985) 1 SCC 591 : AIR 1985 SC 582 [19] (2004) 11 SCC 641 : AIR 2004 SC 4219 [20] (2007) 5 SCC 447 : AIR 2007 SC 1984 [21] AIR 1968 SC 59 : (1967) 66 ITR 664 (SC) [22] (1994) 3 SCC 1 = AIR 1994 SC 1918 [23] (1994) 6 SCC 651 : AIR 1994 SC 11 [24] (2001) 2 SCC 386 : AIR 2000 SC 3689 [25] (1996) 3 SCC 709 : AIR 1996 SC 1627 (Para 43) [26] (1993) Suppl. 1 SCC 96 : AIR1992SC522 [27] (1983) 1 SCC 305 : AIR 1983 SC 130 Para 10 [28] AIR 1954 SC 728 [29] (1969) 2 SCC 248 : AIR 1970 SC 129 [30] (2005) 8 SCC 534 [31] (1974) 4 SCC 3 : AIR 1974 SC 555 [32] (1978) 1 SCC 248 : AIR 1978 SC 597 [33] (1983) 2 SCC 277 = AIR 1983 SC 473 [34] (1947) 2 All ER 680 (CA) [35] (1997) 7 SCC 209 (paras 66 and 67) [36] AIR 1952 SC 196 [37] (1996) 10 SCC 104 [38] (1998) 8 SCC 227 [39] AIR 1991 SC 735 [40] (1974) 4 SCC 428 : AIR 1974 SC 497 [41] (1983) 3 SCC 237 : AIR 1983 SC 634 [42] (2005) 4 SCC 64 : AIR 2005 SC 2178 [43] AIR 1963 SC 591 : (1963) 48 ITR 21 (SC) [44] (1980) 3 SCC 619 : AIR 1980 SC 1547 [45] (1987) 3 SCC 655 : AIR 1987 SC 1911 [46] (2004) 5 SCC 155) : AIR 2004 SC 3894 [47] (1974) 2 SCC 777 : AIR 1975 SC 17 [48] (1980) 1 SCC 66 : AIR 1980 SC 148 (para 8) [49] AIR 1980 SC 1547 : (1980) 3 SCC 619 [50] AIR 1981 SC 774 : (1981) 2 SCC 318 [51] AIR 1987 SC 1911 : (1987) 3 SCC 655 [52] AIR 1992 SC 1371 [53] AIR 1999 SC 2970 : (1999) 7 SCC 400 [54] (1998) 6 KTR 2 (Ker) [55] (2001) 3 SCC 157 [56] AIR 2004 SC 3894 : (2004) 5 SCC 155 [57] (2003) 1 SCC 433 (Para 13) [58] (1975) 1 SCC 421 : AIR 1975 SC 1331 [59] (1985) 1 SCC 641 : AIR 1986 SC 515 [60] (2000) 3 SCC 40 : AIR 2000 SC 1069 [61] (2009) 15 SCC 570 : AIR 2009 SC 3194 [62] (1881) 6 QBD 376 [63] AIR 1961 SC 751 [64] (1975) 1 SCC 421 : AIR 1975 SC 1331 [65] (1981) 2 SCC 205 : AIR 1981 SC 711 [66] (1988) 2 SCC 351 : AIR 1988 SC 876 [67] (2004) 3 SCC 297 : AIR 2004 SC 1531 [68] (2011) 3 SCC 1 [69] (2005) 8 SCC 104 [70] (1970) 2 SCC 820 : AIR 1971 SC 454 [71] (2007) 4 SCC 685 : AIR 2007 SC 2320 [72] (1886) 31 Ch D 607 : 55 LJ Ch 488 (CA) [73] AIR 1931 PC 149 [74] (1881) 8 QBD 63 : (1881-5) All ER Rep 1002 : 51 LJ QB 1 (CA) [75] (1979) 2 SCC 529 [76] (1998) 2 SCC 467 [77] 1992 Supp (3) SCC 141 [78] (2001) 2 GLR 1189 [79] (2004) 6 SCC 210 "