JUDGMENT M.S. Menon, J.
1. Section 3 of the Travancore-Cochin Vehicles Taxation Act, 1950, reads as follows:
"(1) Government may by notification in the Gazette from time to time direct that a tax shall be levied on every vehicle using any public road in the State.
(2) The notification issued under Sub-section (1) shall specify the rates at which, and the year, half-year, or the quarter for which the tax shall he levied:
Provided that the rate shall not exceed the maxima specified in Schedule I in the case of motor vehicles and the maxima specified in Schedule III in the case of vehicles other than motor vehicles."
Entry 4 of Schedule I deals with ''motor vehicles plying for hire and used for the transport of passengers and in respect of which permits have been issued under the law relating to motor vehicles for the time being in force." The maximum quarterly tax specified in that entry for such vehicles fitted with pneumatic tyres and permitted to carry more than five persons is as follows:
(a) For every seated passenger (other than the driver and the conductor) which the vehicle is permitted to carry ..... .. .... ..... Rs. 30/-
(b) For every passenger (other than a seated passenger, the driver and the conductor) which the vehicle is permitted to carry .......... Rs. 10/-.
2 In exercise of the powers conferred by Section 3(1) of the Act, the Government of Travancore-Cochin directed that the tax shall be levied at Rs. 30/- for every seated passenger (other than the driver and the conductor) which the vehicle is permitted to, carry, and at Rs. 10/- for every passenger (other than a seated passenger, the driver and the conductor) which the vehicle is permitted to carry, The notification in that behalf is dated 20-7-1950. By a notification dated 25-6-1954, the rate of Rs. 10/- was reduced to Rs. 7-8-0. By a subsequent notification dated 15-4-1955, the rates were reduced from Rs. 30/-to Rs. 25/- and from Rs. 7-8-0 to Rs. 6-4-0.
3. Section 18(1) of the Travancore-Cochin Vehicles Taxation Act, 1950, reads as follows:
"Government may, by noti0cation in the Gazette, amend, alter, add to or cancel part or the whole of Schedule I, II or III appended to this Act."
In exercise of the powers conferred by the Sub-section, the Government raised the maximum quarterly tax of Rs. 30/- specified in Schedule I for every seated passenger (other than the driver and the conductor) of Rs. 40/-. The notification in that behalf is Ext. P. 1 dated 24-9-1957. By another notification on the same date Ext. P 3 the Government also amended the notification of 20-7-1950 by raising the tax for every seated passenger (other than the driver and the conductor) which the vehicle is permitted to carry from Rs. 25/- to Rs 37.50 and for every passenger (other than a seated passenger, the driver and the conductor) which the vehicle is permitted to carry from Rs. 6-4-0 to Rs. 10/. Both the notifications were published in the Kerala Gazette dated 1-10-1957, Part I, page 2152.
4. The validity of Section 18(1) and the notification issued thereunder were successfully challenged in Damodaran v. State, 1959 Ker. LJ 651: (AIR 1960 Kerala 58). The court said:
"We quash the notification impugned as ultra vires the powers of Government; we also declare, that the delegation of power under Section 18(1) of the Act, to the extent that it authorises Government to fix rates in excess of the maxima prescribed in Schedules I and III of the Act as passed by the legislature, is bad in law, and is void and ineffectual."
The decision was rendered on 16-6-1959.
5. On 9-7-1959 the Governor of Kerala promulgated the Travancore-Cochin Vehicles Taxation (Amendment and Validation) Ordinance, 1959, The Ordinance amended Schedule I to the Act and raised the maximum quarterly tax for every seated passenger (other than the driver and the conductor) which the vehicle is permitted to carry from Rs. 30/- to Rs. 40/-. The Ordinance has since been replaced by the Travaneore-Cochin Vehicles-Taxation (Amendment and Validation) Act, 1959. The provisions of the Ordinance and the Act are identical in all essential particulars. Section 3(1) of the Act provides:
"Notification II, No. TB. 2-14667/57/PW., dated the 24th September, 1957, issued under Sub-section (1) of Section 3 of the principal Act (Ext.. P. 2), enhancing the rates of tax on certain vehicles, shall be deemed to have been issued under the principal Act, as amended by this Act, and to have come into force on the 1st day of October,. 1957."
6. The Act corresponding to the Travancore-Cochin Vehicles Taxation Act, 1950, in force in the Malabar area is the Madras Motor Vehicles Taxation Act, 1931. Entry 4 of Schedule II of that Act deals with "motor vehicles plying for hire and used for the transport of passengers and in respect of which permits have been issued under the Motor Vehicles Act, 1939." The maximum quarterly tax specified in that entry for such vehicles fitted, with pneumatic tyre and permitted to carry more than five persons and not plying exclusively in the City of Madras or in the Municipalities or oncertain routes with which we are not concerned is as follows;
(a) For every seated passenger (other than the driver and the conductor) which the vehicle is permitted to carry Rs. 30/-
(b) For every passenger (other than a seated passenger, the driver or the conductor) which the vehicle is permitted to carry Rs. 10/-
7. Section 4(1) of the Madras Motor Vehicles Taxation Act, 1931 correspond.? to Section 3(1) of the Travancore-Cochin Vehicles Taxation Act, 1950, In exercise of the powers conferred by Section 4(1), the Government of Madras directed that the tax shall be levied at Rs. 30/- for every seated passenger (other than the driver and the conductor) which the vehicle is permitted to carry and at Rs. 10/-for every passenger (other than a seated passenger, the driver or the conductor) which the vehicle is permitted to carry. The notifications in that behalf are dated 27-9-1947 and 24-6-1949. By Ext. P. 4 dated 24-9-1957, the Government of Kerala amended the two notifications and reduced the rate from Rs. 30/- to Rs. 25/- with effects from 1-10-1957.
8. The contention of the petitioner in respect of the current notifications is stated as follows in paragraph 9 of his affidavit dated 26-7-1959:
"The effect of these notifications is that while' vehicles permitted to carry more than 5 persons, operating mainly in the Travancore-Cochin area are chargeable with maximum tax of Rs. 40/- pet-seated passenger and are actually charged at Rs. 37-50nP per seated passenger, vehicles mainly operated in Malabar and are charged at Rs. 25/-per seated passenger. There is absolutely no justification in showing this difference in rates of tax between the bus operators in the erstwhile Travancore-Cochin area and in the Malbar area, as there is practically no difference between the-stage carriages plied and the services rendered in these two areas. There is no reasonable distinction between the bus operators in the said two areas. This is discriminatory. It denies the operators in the Travancore-Cochin area equality before the law and the equal protection of laws and offends Article 14 of the Constitution."
9. It has to be noted that the Madras Motor 'Vehicles Taxation Act, 1931, is not the only Act to the taken into account as far as the Malabar area is concerned. There is also the Madras Motor Vehicles (Taxation of Passengers and Goods) Act, 1952. Section 3 of that Act reads as follows:
"From and after the commencement of this Act, there shall be levied and paid to the Government, a tax on all passengers, luggage and goods carried by stage carriages, and on all goods transported by public carrier vehicles, at the rate of nine pies in the rupee on the fares and freights payable to the operators of such stage carriages and at the rate of six pies in the rupee on the freights payable to the operators of such public carrier vehicles:
Provided that the fare charged by an operator inclusive of the tax leviable under this section, shall not exceed the maximum fare prescribed by the Government under the Motor Vehicles Act, 1939, and in force at the commencement of this Act;
Provided further that no tax shall he levied on any passenger, luggage or goods carried in a stage carriage, the total permitted daily mileage ofwhich does not exceed fifty miles."
10. The validity of the first proviso to Section 3 was successfully challenged before the Madras High Court In Mathurai Pillai v. State of Madras, AIR 1954 Mad 569. The court accepted the contention that the said proviso was unconstitutional and invalid and issued a direction to the Government of Madras to forbear from enforcing the provision of that proviso. In view of the decision, there can be no doubt that the Malabar operators are in law entitled to pass on the tax to those who use their vehicles.
11. As a matter of fact, however, they do not seem to have done so, probably because the traffic will not bear the extra levy. Paragraph 5 of the affidavit of the second respondent dated 25-10-1959 states:
"Almost all the bus operators in the Malabar area were getting the tax payable by them under Act XVI of 1952, compounded in accordance with Section 4 of the Act and, paying on that account at the rate of Rs. 12-8-0 per seat per quarter; in few cases the compounding was done by paying Rs. 0-6-0 per seat, per year, per mile."
12. According to the petitioner, the levy tinder the Madras Motor Vehicles (Taxation of Passengers and Goods) Act, 1952, should not be considered as a liability of the Malabar operators, in view of the decision in AIR 1954 Mad 569. Even then, the question will still remain as to whether the differential treatment spells a discrimination opposed to Article 14 of the Constitution. As pointed out by the Supreme Court in Moti Das v. S. P. Sahi, AIR 1959 SC 942, it is mow well settled that the said Article does not forbid reasonable classification for legislative purposes based on intelligible differentia rationally related to the object of the statute.
13. The affidavit of the second respondent dated 25-10-1959 gives the reasons for the differential treatment. Two of them are stated as follows in paragraph 3 of that affidavit:
(a) The density of traffic is higher in Travancore-Cochin area than in the Malabar area;
(b) The road conditions generally in Travancore-Cochin area are superior to those in the Malabar area; which among other things have a bearing on the costs of running the vehicles."
If these and other reasons mentioned in the affidavit are true -- the materials placed before us by the petitioner, even if admissible in their entirety, are certainly insufficient to say that they are not--it is impossible to hold that the differential treatment is unjustified and amounts to a discrimination opposed to Article 14 of the Constitution.
14. It was contended before us that the affidavit of 25-10-1959 should not be considered for the reason that it is belated. It was agreed that this and many similar petitions should be heard together and in some of them the State had not had time to file any affidavit at all. For this reason and because of the importance of the questions involved, we have considered it necessary that all the relevant facts should be available to us, and that the affidavit should be received in evidence.
15. The further contention urged on behalf of the petitioner is based on Article 19(1) (f) and (g) of the Constitution. It is submitted that the fare permitted to be collected was hardly adequate even before the increased taxation to meet the high rates of wages and operational costs, and that the increase, if permitted, will prove to be the last straw which breaks his back and drives him out of business. The camel back of the taxpayer -- to use the words of Lord Morris -- very often Sustains with ease many such last straws, and on the materials before us it is not possible to say that the increased rate will produce the disastrous result suggested by the petitioner.
16. In Ananthakrishnan v. State of Madras, AIR 1952 Mad 395, Rajamannar, C. J., dealt with the problem of reconciling the fundamental rights guaranteed under Article 19 and the power of taxation conferred by the Constitution as, follows:
"The question then is: how to reconcile the fundamental rights guaranteed under Article 19 and the power to tax contained in several provisions of the Constitution? One way is to hold that a tax otherwise valid does not become invalid merely because it abridged any of the fundamental rights. This way is really not a way of reconciliation; it practically makes the fundamental rights entirely subject to the power of taxation. The other way is to hold any taxation of the exercise of the fundamental right which aims at unduly abridging or destroying such right is unconstitutional (vide Grosgean v. American Press Co., (1936) 297 U. S. 233). But if the taxation is only for legitimate revenue purpose, then, it is not invalid merely because it may adversely affect any of the fundamental rights. This way of reconciling would leave room for judicial review in exceptional cases and a power in the Court to declare a particular instance of taxation as unconstitutional;"
and in T. K. Abraham v. State of Travancore-Cochin, 1957 Ker LT 1184: 1957 Ker LJ 1146: (AIR 1958 Kerala 129), a Full Bench of this Court quoted this passage with approval. Judged in the light of the above passage and of the materials "before us it is impossible to say that there has been any violation of Article 19(1) (f) and (g) of the Constitution.
17. In the light of what is stated above, this petition has to be dismissed, and we do so. In the circumstances of the case, however, there will be no order as to costs.
18. Before leaving this case, we would like to make it clear that nothing we have stated in this judgment should preclude a thorough and if possible immediate enquiry into the condition under which the operators in the Malabar and Travancore-Cochin areas of the State carry on their business, and action on the basis of that enquiry in respect of the levy impugned before us. As a matter of fact the submissions made before us would Indicate that such an enquiry is imminently desirable, and that it should be undertaken with the least possible delay.