RAJAN Vs. STATE OF KERALA

JUDGEMENT

(1.) ALL these Original Petitions are filed to declare that s. 3 of the Kerala Tax on Entry of Motor Vehicles into Local Areas Act, 1994 (Act 15 of 1994) thereinafter mentioned as 'entry Tax Act') and Rule 4 of the rules framed there under are ultra vires and violative of the Constitution. The act received the assent of the Governor on 9-6-1994 and was published in the kerala Gazette Extra-ordinary No. 550 dated 10-6-1994. The contention of the petitioners is that levy of tax under S. 3 of the Entry Tax Act is opposed to art. 301 and 304 of the Constitution as it hampers free flow of trade throughout the territory of India . In some of the petitions it is contended that even if it is assumed that the State can impose certain restrictions on the free How of trade, commerce and intercourse such legislation ought to have been moved in the legislature only with the previous sanction of the President as contemplated under Art. 304 (b) of the constitution.

(2.) YET another contention raised is that there is no legislative competence to pass the impugned Act and the entry 52 of List 11 of the Seventh Schedule is made exclusively to pass any legislation to augment the income for the local authorities and by the definition of the 'local authority' given under S. 2 (i) of the Act the entire State is brought under its purview and, hence, it is a colourable exercise of the contention is that the legislative power given under entry 52 of List II of the Seventh Schedule could have been made exclusively for raising income of the local authority.

(3.) SECTION 3 of the Act says that tax shall be levied on the entry of any motor vehicle into the local area for use or sale therein which is liable for registration in the State under the Motor Vehicles Act, 1988. The first, proviso to S. 3 gives exemption to the vehicles registered in any Unio n Territor y or any other State prior to a period of 15 months or more and the vehicles owned by the Central Government or any vehicles exclusively used for purposes relating to defence of India .