Taxing measure must match the charging section; compulsory lump sum passenger tax and prospective validation were held impermissible.

A taxing provision must stay within the measure fixed by the charging section: the compulsory lump sum assessment of passenger tax based on vehicle capacity and distance, rather than actual fares, was held to travel beyond the Act and was invalid, and the connected rule fell with it. Once invalidity was found, the High Court could not limit that declaration prospectively, because prospective overruling is not available to a High Court; collections under the void provisions could not be preserved by confining the ruling to a future date.

---

---

Issues: (i) Whether the proviso to Section 4 of the Himachal Pradesh Passengers and Goods Taxation Act, 1955 and the related rule authorising compulsory lump sum assessment of passenger tax were valid. (ii) Whether the High Court could apply the declaration of invalidity prospectively and confine its effect to a future date.

Issue (i): Whether the proviso to Section 4 of the Himachal Pradesh Passengers and Goods Taxation Act, 1955 and the related rule authorising compulsory lump sum assessment of passenger tax were valid.

Analysis: The charging provision levied tax on all fares in respect of passengers carried. The challenged proviso, however, directed assessment of lump sum tax only with reference to the registered capacity of the vehicle and the distance travelled or to be travelled, without regard to actual fares. It also made the lump sum method obligatory. A tax measure cannot generalise the levy beyond the statutory charging basis, nor can it proceed on hypothetical assumptions divorced from the statutory measure of tax. Since the proviso travelled beyond the scope of the charging section, it was invalid; the connected rule did not survive independently.

Conclusion: The compulsory lump sum assessment mechanism was invalid and contrary to the Act.

Issue (ii): Whether the High Court could apply the declaration of invalidity prospectively and confine its effect to a future date.

Analysis: Once the High Court had reached the conclusion that the impugned provisions were invalid, it was bound to declare them so for the entire period of operation. The doctrine of prospective overruling is not available to a High Court. Consequently, collections made under the invalid provisions could not be preserved by limiting the declaration to a future date.

Conclusion: The prospective operation directed by the High Court was impermissible and was set aside.

Final Conclusion: The challenge to compulsory lump sum assessment succeeded, and the attempted prospective validation of the invalid levy also failed, leaving the parties to be governed by the charging provision as it stood.

Ratio Decidendi: A taxing provision must operate within the measure fixed by the charging section, and a High Court cannot employ prospective overruling to sustain collections under a provision it has held invalid.

---