TaxTMI 
TaxTMI 
2023 (9) TMI 407
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....RATHNA, J. These appeals have been filed assailing the final Orders of the High Court of Himachal Pradesh dated 11 December, 2008 and 06 May, 2009, whereby the vires of the Himachal Pradesh Passengers and Goods Taxation Act, 1955 (hereinafter referred to as the "Act of 1955" for the sake of brevity) as amended from time to time, particularly by the Himachal Pradesh Passengers and Goods (Amendment and Validation), Act, 1997 (hereinafter referred to as the "Amendment and Validation Act of 1997" for the sake of brevity) has been upheld and the writ petitions filed by the appellants herein, i.e., Civil Writ Petition Nos. 725 of 1998, 422 of 1998, 401 of 2001, 464-467 of 2001 and 79 of 2007, have been dismissed. Bird's eye view of the controversy: 2. The controversy in these cases revolves around the question whether, by enacting the Amendment and Validation Act of 1997, the Himachal Pradesh State Legislature has validly removed the basis of the judgment of the Division Bench of the High Court dated 27 March, 1997. In the said judgment, the Act of 1955 had been held not to include within its scope, the activity of the appellants in providing gratis transport facilities for thei....
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.... said transport facilities. The buses utilized for such purpose were owned and operated by the appellant-NHPC Ltd. 3.3. The Assessing Authority under the Act of 1955, Respondent No. 3 herein, assessed the liability of the appellant-NHPC Ltd. to pay passenger tax under the Act for the years 1984-1985 to 1986-1987 and 1987-1988 to 1990-1991 in respect of the activity of providing transport facilities to its employees and their children. Assessment Orders were passed on 01 October, 1992 stipulating the liability of the appellant, NHPC Ltd. to pay passenger tax under the Act of 1955, on the premise that its employees and their children were passengers under the Act and therefore, the appellant was liable to pay passenger tax for providing them with transport facilities as described hereinabove. It is to be stated at this juncture that the Assessment Orders were passed on the assumption that every bus of the appellant, NHPC Ltd. was plying on every day of the relevant years; a passenger travelled on every seat of every bus; and every employee travelled the full distance shown in the logbook. 3.4. The appellant filed Revision Application before the Commissioner, Excise and Taxation....
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....vision Bench of the High Court allowed Civil Writ Petition No.1733 of 1995 filed by the appellant and directed the Respondents to refund the tax collected under the provisions of the Act of 1955. The pertinent findings of the Division Bench of the High Court are culled out hereinunder: i. That the scheme of the Act of 1955 was to levy a tax on passengers of certain motor vehicles only. Intention of the legislature could be gathered from the various definitions contained in Section 2 of the Act, and the same was to make the Act applicable only to persons who carried on the business of transport. The definition of 'owner' would fortify such finding, as 'owner' was defined to mean a person holding a permit under the Motor Vehicles Act. ii. That the liability of the assessee was to be determined for the years 1984-1985 to 1986-1987 and 1987-1988 to 1990-1991. Prior to 31 May, 1988, 'motor vehicle' was defined to mean "a public service vehicle or public carrier, or private carrier or a trailer attached to any such vehicle." Further, the definition of 'passenger' excluded from its scope the driver, conductor and employee of the owner of the motor vehicle. Therefore, the....
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....ing into account the fare payable in the adjoining areas, in calculating the 'normal rate.' vii. That the charging provision could not be given effect to unless the terms 'route' and 'normal rate' had been expressly and unambiguously defined. 3.7. A Special Leave Petition filed by the Respondents before this Court, assailing the judgment of the High Court dated 27 March, 1997 was dismissed by an Order dated 28 July, 1997. 3.8. In that background, on 13 August, 1997, the Himachal Pradesh Passengers and Goods (Amendment & Validation) Ordinance was promulgated. The Himachal Pradesh Legislative Assembly passed the Amendment and Validation Act of 1997 on 27 September, 1997 with a view to remove the basis of the judgment of the Division Bench of the High Court dated 27 March, 1997. By virtue of the Amendment and Validation Act of 1997, definitions of the terms 'business', 'fare', 'freight' and 'passenger' were amended. Further, definitions of terms such as 'Private Service Vehicle', 'road', 'Transport Vehicle', came to be introduced. Explanation (1) to Section 3 (1) of the Act of 1955, which was the charging provision in the said Act, was omitted and Sub-section (1A) was i....
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....s and goods carried by road in motor vehicles. That simply for the reason that notices have been issued to the owners or assessment orders have been passed against the owners of the vehicles, it could not be said that the tax is levied on the motor vehicles. ii. That the Preamble of the Act of 1955 provided that the same was an Act to provide for levying tax on passengers and goods carried by road in 'certain' motor vehicles. The word 'certain' is omitted by the Amendment and Validation Act of 1997. That this change in no way suggests that the scope of the Act was amended to include taxation on vehicles, instead of on the passengers and goods carried therein. iii. That the defect in the Explanation to Section 3(1) of the Act of 1955, which was noted by the Division Bench of the High Court in passing the judgment dated 27 March, 1997, had also been removed by omitting the said Explanation and inserting Section 3(1A) in the Amendment and Validation Act of 1997, which seeks to bring nonfare paying passengers at par with fare paying passengers. Further, the Competent Authority as well as Schedule I to the Amendment and Validation Act of 1997 prescribe the fare and fre....
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....oresaid contention, learned senior counsel submitted that the Amendments made to the Act of 1955 do not take into consideration the fact that the buses and other motor vehicles of the appellants herein which are used to ferry their employees to work sites and children of their employees to schools are free of charge and without collecting any fare from the passengers. They travel gratis and therefore, in that sense, are not passengers at all. Nevertheless, the incidence of tax are on the appellants who are the owners of the buses and other vehicle who have been levied the tax despite the fact that they are not collecting any tax or any fare from their "passengers" who are none other than their employees and children of their employees. Therefore, the Act itself does not apply to the appellants and hence, they are not liable to pay any tax under the Act. iii. It was further submitted that the High Court has failed to understand the import of the amendments made to the Act of 1955 as the said amendments in no way can mulct any liability to pay tax on the appellants herein. That the true import of the Act of 1955, as amended by the Amendment and Validation Act of 1997 is to l....
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.... from such trade, commerce, manufacture, adventure or concern vide Section 2 (aa) (ii); and, b) any transaction in connection with or incidental or ancillary to such trade, commerce, manufacture, adventure or concern vide Section 2 (aa) (iii). That notwithstanding the fact that the scope of the term 'business' has been widened, sub-clauses (ii) and (iii) to Section 2 (aa) are to be read in harmony with sub-clause (i) thereof, which provides that 'business' includes the business of carrying passengers and goods by motor vehicles. That if 'business' is held to mean just any trade, commerce, manufacture, adventure or concern, sub-clause (i) of Section 2 (aa), which specifies the nature of business, would become redundant. vi. That if sub-clauses (ii) and (iii) to Section 2 (aa) are interpreted to include even businesses other than the business of carrying passengers, the said sub-clauses would be violative of Article 14 of the Constitution on two counts. First, a person or entity who/which does not carry the business of carrying passengers and goods by motor vehicles, would be treated at par with a person or entity who/which carries on such business. Second,....
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.... ancillary activities would also not amount to 'business' unless an independent intention to conduct business in these connected, incidental or ancillary activities is established by the revenue, vide State of Tamil Nadu vs. Board of Trustees of the Port of Madras, (1999) 4 SCC 630; Commissioner of Sales Tax vs. Sai Publication Fund, (2002) 4 SCC 57. That in the present case, there is no material to establish that the ancillary activity of providing transport facilities to their employees and their children is conducted with an independent intention to conduct business through such activity. Therefore, in the present case, neither the main activity of the appellants, nor the ancillary activity of providing transport facilities to their employees and their children, would amount to 'business' as defined under the Amendment and Validation Act of 1997. ii. Referring to the various amendments brought about by the Amendment and Validation Act of 1997 and contrasting them with the unamended provisions, it was contended that the said Act has not removed the basis of the judgment of the Division Bench of the High Court dated 27 March, 1997, nor has it cured the defects in the Act ....
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....oods are transported by a motor vehicle and no fare or freight, whether chargeable or not, has been charged or fare or freight has been charged at a concessional rate, the tax at the rates directed by a Notification by the Government under sub-section (1), shall be levied, charged and paid as if the passengers were carried or goods were transported, either on fares or freights fixed by the competent authority, under the MV Act, for different classes of roads and motor vehicles in the State, or on fares and freights specified in Schedule I to the Act for different classes of roads and motor vehicles, whichever is higher. That previously, under the Act of 1955, Explanation to Section 3(1), which provided that when passengers are carried and goods are transported by a motor vehicle and no fare or freight, whether chargeable or not, had been charged, the tax was levied and paid, as if such passengers were carried or goods transported, at the normal rate prevalent on the route. The ambiguity in the charging provision, i.e., Section 3 (1) of the Act of 1955 arose on account of the fact that the terms 'normal rate' and 'route' had not been defined under the said Act. Owing to such a defec....
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....les, it could not be said that the tax was being levied on the motor vehicles. The tax sought to be imposed was on the passengers and goods carried by road and the operators/owners of the motor vehicles were simply required to facilitate payment of tax by collecting the same from the passengers and depositing it with the Respondent Authorities. That the Act of 1955, as amended by the Amendment and Validation Act of 1997, was enacted on the strength of Entry 56 of List II of the Seventh Schedule of the Constitution of India, which pertains to "taxes on goods and passengers carried by road and inland water ways." With the aforesaid submissions, it was prayed that the present appeals be dismissed as being devoid of merit and the impugned orders of the High Court, be affirmed. Points for Consideration : 6. Having heard learned counsel for the respective parties and on perusal of the material on record, the following points would emerge for our consideration: i. Whether, by enacting the Amendment and Validation Act of 1997, the Himachal Pradesh State Legislature had validly removed the basis of the judgment of the Division Bench of the High Court dated 27 March, ....
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....shall be leviable and paid as if such passengers were carried or goods were transported at the normal rate prevalent on the route." 7.3. Section 2(c) provided an inclusive definition of the term 'fare' which would include sums payable for a season ticket or in respect of a contract carriage. 7.4. It was primarily the aforesaid provisions of the Act of 1955 that formed the subject of interpretation by the Division Bench of the High Court in Writ Petition No.1733 of 1995, which was allowed by the judgment dated 27 March, 1997 as per the reasons indicated above. 8. With a view to bring the employees of the appellants and their children, travelling in the buses of the appellants without payment of fare within the tax net under the Act of 1955 and also to validate the collection of tax already made thereunder, the Amendment and Validation Act of 1997 was enacted by the Himachal Pradesh Legislative Assembly. By way of the Amendment and Validation Act of 1997, amendments were brought about to the Preamble and various provisions of the Act of 1955 with retrospective effect, viz. date of enforcement of the Act of 1955. The amendments brought about, which are relevant for the purpos....
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....e, the tax at the rates directed by Notification issued by the Government under sub-section (1), shall be levied, charged and paid as if the passengers were carried or goods were transported, either on fares or freights fixed by the competent authority, under the MV Act, for different classes of roads and motor vehicles in the State; or on fares and freights specified in Schedule I to the Act for different classes of roads and motor vehicles, whichever is higher. vii. Section 9 has been inserted, which provides for validation of assessments made under the Act of 1955. viii. Schedule I has been added to the Act, which stipulates the fares on which tax would be leviable, for different categories of motor vehicles and class of roads. 9. For easy reference, as submitted by Sri Yashraj Singh Deora, learned counsel, a comparative table of the relevant provisions of the Act of 1955 and the amendments introduced to such provisions, by way of the Amendment and Validation Act of 1997, is provided hereinunder : Parameters The Himachal Pradesh Passengers and Goods Taxation Act, 1955 The Himachal Pradesh Passengers and Goods Taxation (Amendment an....
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....urce, or a trailer when attached to any such vehicle and includes- (i) A motor vehicle used for carriage of passengers or goods or both for hire or reward in contravention of the provisions of the Motor Vehicles Act; and (ii) A maxi cab, which is constructed or adapted to carry more than six passengers, but not more than twelve passengers;] (ea) Motor Vehicles Act" means the Motor Vehicle Act, 1939 (4 of 1939) and the Motor Vehicles Act, 1988 (59 of 1988), as the case may be:] Definition of the term 'owner' 2(f) "owner" means the owner of the motor vehicle in respect of which a permit has been granted or countersigned under the provisions of the Motor Vehicles Act, 1939 (4 of 1939) and includes (a) the holder of a permit in respect of such vehicle, (b) any person for the time being in 2(f) "owner means" the owner of the motor vehicle used for carrying passengers or transporting goods in or through the territory of the State of Himachal Pradesh, and includes, - (a) The de-facto and ....
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....g more than two paise as five paise.] • On all fares in respect of all passengers carried by motor vehicles at such rates not exceeding fifty percent of the value of freight, and on all freights in respect of all goods transported by motor vehicles at such rates not exceeding five percent of the value of freight, Explanation:- When passengers are carried and goods are transported by a motor vehicle and no fare or freight, whether chargeable or not has been charged the tax shall be levied and paid as if such passengers were carried or good transported at the normal rate prevalent on the route. (2) Where any fare or freight charged is a lump sum paid by a person on account of a season ticket or as subscription or contribution for any privilege, right or facility which is combined with the right of such person being carried or his goods transported by a motor vehicle, without any further payment or at a reduced charge, the tax shall be levied on the amount of such lump sum or on such amount as appears to the prescribed authority to be fair and equitable having As the Government m....
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.... Where any fare or freight charged is a lump sum paid by a person on account of a season ticket or as subscription or contribution for any privilege, right or facility which is combined with the right of such person being carried or his goods transported by a motor vehicle, without any further payment or at a reduced charge, the tax shall be levied on the amount of such lump sum Parameters The Himachal Pradesh Passengers and Goods Taxation Act, 1955 The Himachal Pradesh Passengers and Goods Taxation (Amendment and Validation) Act, 1997 or on such amount as appears to the prescribed authority to be fair and equitable having regard to the fare or freight fixed by a competent authority under the Motor Vehicles Act, 4 [1988]. (2-A). Where a motor vehicle plies for hire or reward in contravention of the provisions of the Motor Vehicles Act, 1988 the owner of such vehicle shall, without, prejudice to any action which is or may be taken under that Act, be liable to pay tax at the rate specified in sub-section (1) or such amount of fares and freights as may be determine....
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....mencement of the Himachal Pradesh Passengers and Goods Taxation (Amendment and Validation) Act, 1997 (hereinafter referred to as this 'Act'), shall be deemed to be a valid action or thing had been made, taken or done under the provisions of the said Act as amended by this Act and accordingly i) the aforesaid tax assessed, levied, charged, paid or collected or purporting to have been assessed, levied, charged, paid or collected under the provisions of the said Act, before the commencement of this Act shall be deemed to be and always be deemed to have been validly assessed, levied, charged, paid or collected in accordance with law: (ii) no suit or other proceeding shall be maintained or continued in any court or before any authority for the refund of, and no enforcement shall be made by any court or authority of any decree or order directing the refund of any such aforesaid tax, which has been collected; (iii) recoveries, if any, shall be made in accordance with the provision of the said act of all amounts which would have been collected thereunder as such aforesaid tax if this Act had been in force at all material times; and (iv) anything ....
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.... ii. In Hindustan Gum and Chemicals Ltd. vs. State of Haryana, (1985) 4 SCC 124, this Court held that it is permissible for a competent legislature to overcome the effect of a decision of a court setting aside the imposition of a tax by passing a suitable Legislation, by amending the relevant provisions of the statute concerned with retrospective effect, thus taking away the basis on which the decision of the court has been rendered and by enacting an appropriate provision validating the levy and collection of tax made before the decision in question was rendered. In that decision, reliance was placed on Shri Prithvi Cotton Mills Ltd. vs. Broach Borough Municipality, A.I.R 1970 SC 192, a Constitution Bench decision of this Court, which has laid down the requirements which a validating law should satisfy in order to validate the levy and collection of a tax which has been declared earlier by a court as illegal. The relevant portion of the said judgment reads as under: "When a Legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validati....
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....dian Aluminium Company Co. vs. State of Kerala, A.I.R 1996 SC 1431, the principles regarding the abrogation of a judgment of a court of law by a subsequent legislation were culled out in the following words: "56. From a resume of the above decisions the following salient principles would emerge: (1) The adjudication of the rights of the parties is the essential judicial function. Legislature has to lay down the norms of conduct or rules which will govern the parties and the transaction and require the court to give effect to them; (2) The Constitution has delineated delicate balance in the exercise of the sovereign power by the Legislature, Executive and Judiciary; (3) In a democracy governed by rule of law, the Legislature exercises the power under Articles 245 and 246 and other companion Articles read with the entries in the respective Lists in the Seventh Schedule to make the law which includes power to amend the law. (4) The Court, therefore, need to carefully scan the law to find out: (a) whether the vice pointed out by the Court and invalidity suffered by previous law is cured complying with the legal and constitutional requirement....
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....to enact laws including the power to retrospectively amend laws and thereby remove causes of ineffectiveness or invalidity. When a law is enacted with retrospective effect, it is not considered as an encroachment upon judicial power when the legislature does not directly overrule or reverse a judicial dictum. The legislature cannot, by way of an enactment, declare a decision of the court as erroneous or a nullity, but can amend the statute or the provision so as to make it applicable to the past. The legislature has the power to rectify, through an amendment, a defect in law noticed in the enactment and even highlighted in the decision of the court. This plenary power to bring the statute in conformity with the legislative intent and correct the flaw pointed out by the court can have a curative and neutralizing effect. When such a correction is made, the purpose behind the same is not to overrule the decision of the court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded. This does not amount to statutory overruling by the legislatu....
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....of ineffectiveness or invalidity of laws. Further, when such correction is made, the purpose behind the same is not to overrule the decision of the court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded. The order of the High Court, inter alia, holding that the amended provisions did not usurp the judicial power was upheld. vii. In Madras Bar Association vs. Union of India, (2022) 12 SCC 455, L. Nageswara Rao J., speaking for the majority (2:1) laid down the following principles, as regards the permissibility of abrogation, to remove the basis of a judgment: "43. The permissibility of a legislative override in this country should be in accordance with the principles laid down by this Court in the aforementioned as well as other judgments, which have been culled out as under: a) The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violat....
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....efect is removed. This Court has, however, clearly held that nullification of mandamus by an enactment would be impermissible legislative exercise. This Court has further held that transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India." 11. What follows from the aforesaid judicial precedent is, a legislature cannot directly set aside a judicial decision. However, when a competent legislature retrospectively removes the substratum or foundation of a judgment to make the decision ineffective, the same is a valid legislative exercise provided it does not transgress on any other constitutional limitation. Such a legislative device which removes the vice in the previous legislation which has been declared unconstitutional is not considered to be an encroachment on judicial power but an instance of abrogation recognised under the Constitution of India. The decisions referred to above, manifestly show that it is open to the legislature to alter the law retrospectively, provided the alteration is made in such a manner that i....
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....forming the power of judicial review. In that context, we observe that while it may be open to the legislature to alter the law retrospectively, so as to remove the basis of a judgment declaring such law to be invalid, it is essential that the alteration is made only so as to bring the law in line with the decision of the Court. The defects in the legislation, as it stood before the Amendment and Validation Act of 1997 was enacted, must be cured by way of the amendments introduced retrospectively. Simply setting at naught a decision of a court without removing the defects pointed out in the said decision, would sound the death knell for the rule of law. The rule of law would cease to have any meaning if the legislature is at liberty to defy a judgment of a court by simply passing a validating legislation, without removing the defects forming the substratum of the judgment by use of a non-obstante clause as a technique to do so. 14. The legislative device of abrogation by enacting retrospective amendments to a legislation, as a means to remove the basis of a judgment and validate the legislation set aside or declared inoperative by a Court, must be employed only with a view to br....
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.... Act of 1997: 16. We shall now proceed to consider the issue as to validity of the Act of 1955 as amended by the Amendment and Validation Act of 1997, in light of the principles and case law discussed hereinabove. For the purpose of carrying out such an exercise, it is necessary to first, identify the defects pointed out by the High Court in its judgment dated 27 March, 1997, whereby the Act of 1955 had been held not to include within its scope the activity of the appellants of providing transport facilities for their employees and their children, as the charging provision contained therein, i.e., Section 3 (1) and the Explanation thereto was crouched in ambiguous terms. 16.1. The defects identified by the High Court in its judgment dated 27 March, 1997 are as under: i. The High Court observed that the levy of tax on passengers was only on certain motor vehicles and the provisions of the Act were not applicable to entities, such as, appellants herein. This was on a reading of a definition of 'motor vehicle' and 'owner' as found in the Act of 1955. Further, the definitions of 'motor vehicle' as well as the definition of 'passenger' were restricted as a result, the bus....
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....r such basis has been removed by curing the defects listed hereinabove, by introducing the Amendment and Validation Act of 1997. For this purpose, a tabular representation of the defects pointed out by the High Court and details of the corresponding provision(s) enacted/amendment introduced to remove the defects, is as hereinunder: Sl. No. Defects identified in the Act of 1955 by the Division Bench of the High Court in the judgment dated 27 March, 1997. Details of the corresponding provision(s) enacted/amendment introduced by the Amendment and Validation Act to remove the defects. 1. The term 'business' was defined in a narrow manner in the Act of 1955 and meant the business of carriage of passengers and goods. The definition of 'business' has been enlarged by way of the Amendment and Validation Act and it now includes, besides the business of carrying passengers and goods by motor vehicles, any trade, commerce or manufacture, or any adventure or concern whether Sl. No. Defects identified in the Act of 1955 by the Division Bench of the High Court in the judgment dated 27 March, 1997. Details of the corresponding provision(s) enacted/amendment introduced b....
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.... the Explanation thereto, in the absence of definitions in the Act of 1955. i. Explanation to Section 3(1) has been deleted and Section 3 (1A) has been inserted, prescribing two alternate methods to notionally determine fares or freights, when the same has not been charged, i.e. by taking into account: (a) fares or freights fixed by the competent authority, under the MV Act, or (b) fares and freights specified in Schedule I to the Act for different classes of roads and Sl. No. Defects identified in the Act of 1955 by the Division Bench of the High Court in the judgment dated 27 March, 1997. Details of the corresponding provision(s) enacted/amendment introduced by the Amendment and Validation Act to remove the defects. motor vehicles. The higher of the two fares is to be adopted in every case. ii. Schedule I to the Amendment and Validation Act prescribes the fare and freight for different categories of motor vehicles, for different roads. iii. Section (2gc) defining the term 'road' has been introduced. 16.3. It is evident from the table presented hereinabove that the defects identified by the Division Bench of the High Court in the judgmen....
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....ugged by way of the Amendment and Validation Act of 1997, inasmuch as the definition of 'business' has been enlarged and it now includes, besides the business of carrying passengers and goods by motor vehicles, any trade, commerce or manufacture, or any adventure or concern whether or not the same is carried on with a profit motive; and any transaction in connection with, incidental or ancillary to such trade, commerce or manufacture. 'Business' now means any business, carried on with or without a profit motive, or any ancillary transactions in connection with such business. iii. The High Court had further held that the intention of the State legislature was to make the Act of 1955 applicable only to persons who carried on the business of transport. That the definition of 'owner' would fortify such finding, as 'owner' was defined to be a person holding a permit under the Motor Vehicles Act. However, the scope of term 'owner' has been enlarged by way of the Amendment and Validation Act of 1997, to mean the owner of the motor vehicle used for carrying passengers or transporting goods in or through the territory of the State of Himachal Pradesh. Therefore, this defect has als....
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....the business of carrying passengers and goods. That is the very purpose of the amendment. The definition of 'business' as amended has the widest amplitude and includes any trade, commerce, manufacture, adventure or concern. 19. Learned counsel for the appellants have contended that definitions of 'passenger', 'business', 'fare' and 'road' are artificial and unnatural, as also contrary to the purpose and object of the Act and hence, ultra-vires. However, no reasons have been cited to demonstrate how the said definitions are artificial. Therefore, we find no merit in the said contention. 20. It is also submitted, with respect to the term 'passenger' that fundamentally, 'passenger' means a person who travels by paying a fare to the owner or operator of the vehicle, vide M/s Tata Engineering and Locomotive Co. (supra). Therefore, a non-fare paying employee of the operator, or a school going child of such employee, is not a passenger. The said submission would also not come to the aid of the appellants. The meaning of the term 'passenger' would have to be gathered in every case, having regard to the definition of the said term in the relevant statute. The decision of this Court in....
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.... 22. The import of the Act of 1955, as amended by the Amendment and Validation Act of 1997, could be gathered from the Preamble which provides that it has been enacted to provide for levying a tax on passengers and goods carried by road in motor vehicles. It is therefore clear that tax is sought to be imposed on passengers and goods, carried by road in motor vehicles. It is a no brainer that such a tax falls within the legislative field governed by Entry 56 of List II of the Seventh Schedule of the Constitution, which pertains to "taxes on goods and passengers carried by road and inland water ways." Simply for the reason that notices have been issued to the owners or assessment orders have been passed against the owners of the vehicles, it cannot be said that the tax is levied on the motor vehicles. If the persons carried happen to be employees of the owners of the buses, such employees should pay the tax. When the employer, i.e., the owner of the vehicle, does not collect the tax from such employees, he should himself pay it, in discharge of the employer's statutory duty as an agent of the State to collect tax on the basis of the amended provision. Whether to collect the tax pay....
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....) of the Amendment and Validation Act of 1997. 24. The next question is with regard to the liability of the appellants to pay the tax under the Act of 1955 as amended by the Amendment and Validation Act of 1997. The Act of 1955 was assailed in W.P.(C)No.1733 of 1995 by the appellants herein. The High Court of Himachal Pradesh by judgment dated 27.03.1997 struck down certain provisions of the Act and held that the Act did not apply to the appellants herein. The Special Leave Petition filed against the said judgment was also dismissed by this Court on 28th July, 1997. Thereafter, the Amendment and Validation Act of 1997 was enacted by the legislature of the State of Himachal Pradesh. The amendments were unsuccessfully challenged by the appellants herein by filing writ petitions before the High Court. The impugned orders of the High Court of Himachal Pradesh were passed in December 2008 and July, 2009. The Special Leave Petitions filed before this Court were converted to Civil Appeals as leave was granted in them. This Court has now upheld the Amendments made to the Act of 1955 by virtue of the Amendment and Validation Act of 1997 and affirmed the judgment of the High Court of Hima....