TaxTMI 
TaxTMI 
1973 (12) TMI 94
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....960 a letter was sent by the Deputy Secretary to the Government of Rajasthan to the Secretary to the Government of Uttar Pradesh in reply to an earlier letter received from the Transport Commission Uttar Pradesh conveying approval of the Rajasthan Government for the nationalisation of the undermentioned routes for the operation of services by the State transport undertakings of both States in accordance with the reciprocal arrangement arrived at between the two States: 1. Bharatpur-Agra 2. Bharatpur-Mathura 3. Alwar-Mathura 4. Mathura-Kama Kosi via Goverdhan 5. Agra-Dholpur We are in the present appeals concerned with four of the routes, i.e. the routes mentioned above other than Bharatpur-Mathura route. Appeal No. 1738 of 1972 relates to Dholpur-Agra route. It may be mentioned that Dholpur, Bharatpur, Alwar and Kama Kosi are situated in Rajasthan, while Agra and Mathura are situated in Uttar Pradesh. Notification dated December 4, 1961 was published in the U.P. Gazette dated December 9, 1961 by the Uttar Pradesh Government under Section 68C of the Act in respect of proposed scheme for providing State road transport passenger services on inter-State Agra-Dholpur route. Accordi....
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....d petitions under Articles 226 and 227 of the Constitution to challenge the validity of the above notifications. The learned single Judge who heard the writ petitions came to the conclusion that a State could not by taking unilateral action provide transport services for a territory outside the limits of its own territory. The learned Judge was of the view that in framing the scheme the State transport undertaking performed executive function of the State. View was expressed that one State could not cancel permits held by the bus operators of another State. Finding was also given that effective notice had not been given to the bus operators of Rajasthan as the notifications were published in the Gazette of Uttar Pradesh only. The writ petitions were accordingly allowed and the impugned notifications were quashed by the learned single Judge. 4. On appeal the Division Bench of the High Court held that when an undertaking proposes a scheme and the same is approved by the State Government, the undertaking and the State Government really perform the functions of the Central Government under Clause (2) of Article 258 of the Constitution. Regarding the cancellation of the permits, the Di....
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....aling with the contentions advanced, we may refer to the relevant provisions of the Act as they existed at the relevant time. Chapter IVA was inserted in the Act by the Motor Vehicles (Amendment) Act, 1956 (Act 100 of 1956). The said chapter came into force with effect from February 16, 1957 and consisted at the relevant time of Sections 68A to 68I. Section 68A contains definitions. According to Clause (b) of that section, "State transport undertaking" means any undertaking providing road transport service, where such undertaking is carried on by,- (i) the Central Government or a State Government; (ii) any Road Transport Corporation established under Section 3 of the Road Transport Corporations Act, 1950; (iii) the Delhi Road Transport Authority established under Section 3 of the Delhi Road Transport Authority Act, 1950; (iv) any municipality or any corporation or company owned or controlled by the State Government. Section 68B provides that the provisions of Chapter IVA and the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any....
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....w. Section 68C enables a State transport undertaking, as defined in Section 68A of the Act, to prepare a scheme for nationalisation of transport service, with the particulars mentioned in the section, in case the State transport undertaking is of the opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or in any particular class of such service should be run and operated by the State transport undertaking to the exclusion, complete or partial, of other persons or otherwise. It is also provided that such a scheme shall be published in the Official Gazette and also in such other manner as may be directed by the State Government. Section 68D enables the persons affected by the scheme to file objections within thirty days from the date of the publication of the proposed scheme in the Official Gazette before the State Government. The State Government has thereafter to consider the objections after giving an opportunity to the objector or his representatives and the representatives of the State transport undertaking to be heard in the mat....
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....State route can only be in respect of that portion of the route which is within its own territory and not in respect of the entire inter-State route. If the approval of the State Government was to be accorded in respect of that portion of inter-State route which was within its own territory, there would have been no necessity to obtain the prior approval of the Central Government. A State Government is competent to approve a scheme for nationalisation of transport service on a route within its own territory if it complies with the other necessary formalities prescribed by law. There is in such an event no necessity to obtain any approval of the Central Government. The necessity of obtaining prior approval of the Central Government arises because the scheme envisages nationalisation of transport service not only for that part of the inter-State route which is within the territorial limits of the State Government approving the scheme but also for the remaining part of the route which is outside the said territorial limits. Inter-State route would normally cover the entire route and not merely the portion of the route which is within the territorial limits of the State Government whic....
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....re is nothing in Article 298 to show that the trade or business carried on by a State must be restricted to the urea within its territorial limits. On the contrary, the article envisages the carrying on of the trade and business by a State without any territorial limitations. The only restriction on the executive power of the State in this respect is contained in Clause (b) of the proviso to that article. According to that clause, the executive power of the State shall, in so far as such trade or business is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament. Entry 35 in List III of Seventh Schedule to the Constitution relates to mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied. Under entry 21 in List III of the Seventh Schedule, the Parliament can make laws for commercial and industrial monopolies. The expression "commercial and industrial monopolies" as held by this Court in the case of H.C. Narayanappa and Ors. v. The State of Mysore and Ors, is wide enough to include grant or creation of commercial or industrial monopolies to the State and citizens as well....