GOPI PARSHAD Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS petition under Article 236 of the Constitution raises the question whether the imposition authorised by the Punjab Tobacco Vend Pees Act, 1964, constitutes a tax or a licence fee.

(2.) THE petitioner, who is carrying on business as a dealer in cigarettes and bidis in Sonepat, has been required to take on a distributing agent's licence on payment of a licence fee of Rs. 500/-under Rule 4 of the rules framed under the Tobacco Vend Fees Act, 1954. He declines to take out the licence in question and challenges the validity of the rule on various grounds, among others, being that the State Government is imposing a tax in the garb of a licence fee, that the licence fee is discriminatory and that it amounts to unreasonable restriction on trade and business.

(3.) A licence fee on the sale of tobacco was imposed for the first time by the Punjab Tobacco vend Pees Act, 1934, which was enacted with the object of regulating the sale of manufactured tobacco in municipal and certain other areas. Section 3 imposed a statutory obligation on all vendors of tobacco to take out a dealer's licence and Section 4 declared that every licence shall be granted on payment of such fees as may be prescribed by the State Government. The State Government prescribed an annual licence fee at the rate of Rs. 2/- in the year 1935 but increased it to Rs. 3/- in 1939, Rs. 5/- in 1941 and Rs. 20/- in 1950/ The Act of 1934 was repealed in the year 1952 but was re-enacted in substantially the same form in the year 1954. Rule 4 of the rules framed under the new Act authorises the issue of the following kinds of licences on the fees mentioned against each, namely- (1) Manufacturer's or distributing agent's licence. . . . . . . . . . . . . . Rs. 500/- per annum (2) Licence for a dealer who Has more than one assistant or employee. . . . . . . . . . . . . . Rs. 240/- per annum (3) Licence for a dealer who has only one assistant or employee. . . . . . . . . . . . . . "rs. 60/- per annum (4) Licence for a dealer or hawker who has no assistant or employee. . . . . . . . . . . . . . Rs. 30/- per annum.