Judgment :- 1. The petitioners and respondent No. 2 are stage carriage operators in various routes in the Districts of Alleppey and Quilon as per permits issued under the Motor Vehicles Act, 1933. The petitioners are individuals, while the second respondent is a registered Co-operative Society governed by the Kerala Co-operative Societies Act, 1969. Petitioners 1,3, 5 and 7 have got six buses each, while petitioners 2, 4 and 8 have got three buses each and the 6th petitioner has got four buses. The second respondent has 20 buses. The routes operated by the petitioners and the second respondent overlap in some places; and all of them carry on their business under similar circumstances. 2. The Kerala Motor Vehicles Taxation Act, 1963 imposes a tax on all motor vehicles used or kept for use in the State at the rates fixed by the Government not exceeding the maximum rates specified in the First Schedule in the Act. Accordingly the tax fixed by the Government in the case of a stage carriage is Rs. 160/- per seat per year, and also an additional levy of Rs.40/- for every standing passenger. A special provision is contained in S.21 of this Act, which provides that a registered co-operative society which has got the characteristics specified in that section shall be liable only to 50% of the tax payable under the Act. The second respondent possesses all these characteristics, with the result the tax payable in respect of the twenty buses run by it is only at the rate of 50% of the tax payable by the petitioners. The petitioners seek a declaration that the said section is unconstitutional as violative of Art.14, 19 (1) (f) and 31 of the Constitution. 3. The objection taken on the basis of Art.19 (1) (f) and 31 are on somewhat remote grounds, and it was not rightly pressed at the bearing. It was the alleged violation of Art.14 that was seriously urged before me. 3. The objection taken on the basis of Art.19 (1) (f) and 31 are on somewhat remote grounds, and it was not rightly pressed at the bearing. It was the alleged violation of Art.14 that was seriously urged before me. This contention is based on the allegation that the petitioners and the second respondent do the same business in the same area under similar circumstances, that the second respondent is in a better position to carry on its business more economically and more efficiently than any one of the petitioners because of it special characteristics, and that the provision contained in S.21 is a baseless discrimination to the detriment of persons like the petitioners, with the result the second respondent gets an undue advantage over them in the matter of carrying on the business. It is also alleged that there is no co-operative society other than the second respondent satisfying all the requisites prescribed in S.21, and that the said provision amounts to singling out that society for a favourable treatment without any rational basis. 4. In order to deal with the above contentions, it is necessary to notice some of the relevant principles underlying Art.14 of the Constitution. Equality before the law or the equal protection of the laws guaranteed to every person within the territory of India in the said article means the right to equal treatment in similar circumstances both in the privileges conferred and in the liabilities imposed by the laws. No one shall be subjected to more burden or charges than such as one imposed upon all others under like circumstances. It follows that the principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances in the same position. The State which has to deal with diverse problems arising out of an infinite variety of human relations must of necessity have the power of making special laws to attain particular objects; and that for that purpose it must have large powers of selection or classification. Thus the entire problem of the equal protection clause is one of classification; but the classification must be made on reasonable basis. In Panda Ranga Rao v. Andhra Pradesh P.S. Commission AIR. 1963 SC. Thus the entire problem of the equal protection clause is one of classification; but the classification must be made on reasonable basis. In Panda Ranga Rao v. Andhra Pradesh P.S. Commission AIR. 1963 SC. 268, the Supreme Court stated: "It is well settled that though Art.14 forbids class legislation, it does not forbid reasonable classifications for the purposes of legislation. When any impugned rule or statutory provision is assailed on the ground that it contravenes Art.14, its validity can be sustained if two tests are satisfied. The first test is that the classification on which it is founded must be based on an intelligible differentia: which distinguishes persons or things grouped together from others left out of the group; and the second is that the differentia in question must have a reasonable relation to the object sought to be achieved by the rule or statutory provision in question." In this context, I shall also refer to the decision of the Supreme Court in Harichand v. Union of India, AIR. 1970 SC. 1453 wherein the following passage appears: "When a law h challenged as violative of Art.14 of the Constitution it is necessary in the first place to ascertain the policy underlying the statute and the object intended to be achieved by it. Having ascertained the policy and object of the Act the Court has to apply a dual test in examining its validity (1) whether the classification is rational and based upon an intelligible differentia which distinguishes persons or things that are grouped together from others that are left out of the group and (2) whether the basis of differentiation has any rational nexus or relation with its avowed policy and object." 5. The guarantee of equal protection applies also to taxation law. But that does not mean that every person should be taxed equally; but persons under the same circumstances or property of the same character should be taxed on the same standard. The power of the State to classify for purposes of taxation is of wide range and flexibility. Thus it may exempt certain classes of property from taxation, or it may impose different specific taxes upon different trades and professions. In Moopil Nair v. State of Kerala AIR. 1361 SC. 552, the Supreme Court stated: "The guarantee of equal protection of the taws must extend even to taxing statutes It has not been contended otherwise. Thus it may exempt certain classes of property from taxation, or it may impose different specific taxes upon different trades and professions. In Moopil Nair v. State of Kerala AIR. 1361 SC. 552, the Supreme Court stated: "The guarantee of equal protection of the taws must extend even to taxing statutes It has not been contended otherwise. It does not mean that every person should be taxed equally. But it does mean that if property of the same character has to be taxed, the taxation must be by the same standard, so that the burden of taxation may fall equally on all persons holding that kind and extent of property. If the taxation, generally speaking, imposes a similar burden on every one with reference to that particular kind and extent of property, on the same basis of taxation, the law shall not be open to attack on the ground of inequality, even though the result of the taxation may be that the tots 1 burden on different persons may be unequal. Hence, if the Legislature has classified persons of properties into different categories, which are subjected to different rates of taxation with reference to income or properly, such a classification would not be open to the attack of inequality on the ground that the total burden resulting from such a classification is unequal. Similarly, different kinds of property may be subjected to different rates of taxation, but so long as there is a rational basis for the classification. Art.14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality; the law may bo struck down as creating an inequality amongst holders of the same kind of property." The same principle has been re-stated by the Supreme Court in Twyford Tea Co. Ltd, v. State of Kerala 1970 KLT.181. 6. I shall examine the constitutional validity of S.21 of the Kerala Motor Vehicles Taxation Act, 1963 in the light of the aforesaid principles. S.21 reads: "21. Reduction of tax in cases of certain motor vehicles. Ltd, v. State of Kerala 1970 KLT.181. 6. I shall examine the constitutional validity of S.21 of the Kerala Motor Vehicles Taxation Act, 1963 in the light of the aforesaid principles. S.21 reads: "21. Reduction of tax in cases of certain motor vehicles. Where the registered owner of a motor vehicle used or kept for use in the State Is a co-operative society registered or deemed to be registered under any law relating to cooperative societies for the time being in force, the tax payable in respect of that motor vehicle shall be one half of the rates specified in Schedule I, if the taxation officer is satisfied, after such enquiry as be deems fit, that, (i) the co-operative society is solely engaged in the business of transport of goods or passengers or both from one place to another in motor vehicles; (ii) at least seventy five per cent of the members of the co-operative society are its employees; (iii) at least fifty percent of the members of the co-operative society are not related to each other; (iv) at least ninety percent of the employees of the society are its members; and (v) the motor vehicle is used or kept for use exclusively for the purpose of the co-operative society. Explanation. For the purposes of this section a member shall be deemed to be related to any other member if that member is the husband, wife, brother or sister or any lineal ascendant or descendant of that other member." It is alleged by the Petitioners that there is no co-operative society satisfying the requirements of the above statutory provision except the second respondent, and that the said provision was enacted only for the purpose of giving a partial treatment and an undue advantage to the said respondent to the detriment of the petitioners and persons similarly placed like them. The respondents have not filed any counter affidavit denying the above allegation. Therefore, I am constrained to consider the question of the alleged violation of Art.14 of the Constitution on the assumption that S.21 of the Act was made for the sole benefit of the second respondent. But that by itself may not offend Art.14, if the second respondent would fall into a class by itself distinct from others, and such a classification has a reasonable basis. But that by itself may not offend Art.14, if the second respondent would fall into a class by itself distinct from others, and such a classification has a reasonable basis. On the other band picking op a person or a number of persons having certain common characteristics, which have no relevancy to the object of the law for a more beneficial treatment than meted out to other persons cannot amount to a valid classification. It would be singling out persons on irrational grounds for a discriminantory treatment and such a law would clearly offend Art.14 of the Constitution. So even assuming that there are a number of co-operative societies which satisfy all the requirements of S.21 of the Act, the question would arise whether the classification attempted to be made by the said section is rational. The fact the co-operative societies have certain characteristics distinct from individuals or incorporated companies cannot by itself entitle such societies for favourable legislative treatment, unless the classification has a reasonable basis. 7. In Ramanlal Nagardas v. M. S. Palnitkar AIR. 1961 Gujarat 38 the action of the State Government in entrusting wholesale distribution of sugar, which is an essential commodity under the Essential Commodities Act, 1955 only to co-operative societies to the exclusion of other dealers was attacked as violative of Art.14 of the Constitution before a Division Bench of the Gujarat High Court. In support of the impugned government action, it was contended that co-operative societies formed a separate class by themselves, and that the issue of licences to such societies to the exclusion of others was valid. The contention was rejected; and in doing so, Bhagwati, J. who delivered the judgment of the court stated: "Classification in itself is not enough for the simple reason that anything can be classified and every discriminatory action must necessarily fall into some category of classification, for classification is nothing more than dividing off one group of things from another. It is only when a difference or distinction is made in a given case that the question regarding the application of Art.14 can arise. Now if the State is permitted to make classification in any manner it likes, it would invest the State with an arbitrary power to discriminate as it pleases and that would completely destroy the guarantee contained in Art.14. Now if the State is permitted to make classification in any manner it likes, it would invest the State with an arbitrary power to discriminate as it pleases and that would completely destroy the guarantee contained in Art.14. A rule has, therefore, been evolved which permits the State to make classification for the purpose of achieving particular legislative objects but requires that the classification must satisfy two conditions namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the legislation." After examining the facts of the case in the light of the above principles the learned judge added "The classification of license holders into those who are co operative societies and those who are not for the purpose of wholesale distribution of sugar in those circumstances is totally unrelated to the policy or object of the said Act. There is absolutely no nexus between the basis of classification and the policy or object of the Act." The above decision has been referred to with approval by the Supreme Court in Mannalal Jain v. State of Assam AIR. 1962 SC. 386. 8. The Kerala Motor Vehicles Taxation Act, 1963 was enacted, as its preamble states, to unify and amend the laws relating to levy of tax on motor vehicles in the State of Kerala. Before that enactment, the Travancore-Cochin Vehicles Taxation Act, 1950 applied to the Travancore-Cochin area and the Madras Motor Vehicles Taxation Act, 1931 applied to the Malabar District. The Travancore-Cochin Act was passed to unify the corresponding statutes in Travancore and Cochin. The preamble of these two statutes as well as the statement of object and reasons of the Madras Act would show that the object of a levy of a tax on motor vehicles was to abolish the existing system of tolls and to raise a general revenue for the construction, maintenance and improvement of roads. As already pointed out, classification is necessary in the matter of taxation also. Persons similarly situate should be subject to the same rate of tax, while unequals should not be taxed at the same rate. It is also open for the State to totally exempt from the tax persons who deserve such an exemption in the interest of the public. As already pointed out, classification is necessary in the matter of taxation also. Persons similarly situate should be subject to the same rate of tax, while unequals should not be taxed at the same rate. It is also open for the State to totally exempt from the tax persons who deserve such an exemption in the interest of the public. All these would be valid classifications. Now on examining the provisions in S.21 of the Kerala Motor Vehicles Taxation Act, 1963, I am unable to find any reasonable basis to justify the partial exemption from tax allowed to the second respondent or other co-operative societies, if there be any, which would satisfy the requirements of the said section. Under that section, the exemption is given to a society, seventy-five per cent of whose members are at least its employees and ninety per cent of its employees are at least its members. Such a society would be able to manage its business far more efficiently, economically and profitably than an individual, or company or other co-operativs society, who may have to employ strangers for the management of his or its business. While persons are at liberty to form a co-operative society and carry on a business subject to the conditions mentioned in the said section and manage the business more efficiently and economically, I do not find any valid reason to give any tax exemption to such persons or such a society, the effect of which would obviously be to give undue and undeserved benefit to them, to create an unhealthy competition to the detriment of others, and oust them from the field of the business. A law making such a classification and giving that class such an exemption would be clearly violative of the guarantee of equal protection incorporated in Art.14 of the Constitution. 9. The guarantee of equal protection can be violated either by creating an unreasonable patronage in favour of a class or by subjecting a class to hostile treatment. Then the question arises how is equality before the law to be maintained; is it by extending the same patronage to all who are similarly situated, or subjecting all such persons to same hostile treatment. In other words, which is the provision to be struck down as discriminatory. Then the question arises how is equality before the law to be maintained; is it by extending the same patronage to all who are similarly situated, or subjecting all such persons to same hostile treatment. In other words, which is the provision to be struck down as discriminatory. There is some indication of the answer to this question in the decision of the Supreme Court in Income - tax Officer v. Lawrence Singh AIR. 1968 SC. 658. In that case, the provision contained in clause (xxi) of S.4 (3) of the Indian Income-tax Act, 1922 and the corresponding provision contained in S.10 (26) of the Income-tax Act, 1961, to the effect that every member of a Scheduled Tribe residing in any of the areas mentioned therein, except persons in the service of the Government, shall be exempt from Income-tax, were attacked as violative of Art.14 of the Constitution on the ground that persons in Government service were subjected to a hostile treatment without any reasonable basis. In dealing with the question, the Supreme Court stated: "It is not in dispute that taxation laws must also pass the test of Art.14. That has been laid down by this Court in Moopil Nair v. State of Kerala, 19613 SRC. 77: (AIR. 1961 SC. 552), But as observed by this Court in East India Tobacco Co. v. State of Andhra Pradesh, 1963 1 SCR 404 at p. 409= (AIR. 1962 SC. 1733 at p. 1735) in deciding whether a taxation law is discriminatory or not it is necessary to bear in mind that the State has a wide discretion in selecting persons or objects it will tax, and that a statute is not open to attack on the ground that it taxes some persons or objects and not others; it is only when within the range of its selection, the law operates unequally, and that cannot be justified on the basis of any valid classification, that it would be violative of Art.14. It is well settled that a State does not have to tax everything in order to tax something. It is well settled that a State does not have to tax everything in order to tax something. It is allowed to pick and choose districts objects, persons, methods and even rates for taxation if it does so reasonably." After referring to the above general principles, the court dealt with the particular statutory provision under attack and stated, "The exemption in question was not given to individuals either on the basis of their social status or economic resources. It was given to a class. Hence individuals as individuals do not come into the picture. We fail to see in what manner the social status and economic resources of a government servant can be different from that of another holding a similar posit ion.in a corporation or that of a successful medical practitioner, lawyer, architect etc. To over paint the picture of a government servant as the embodiment of all power and prestige would sound ironical. To day his position in the society to put it at the highest is no higher than that of others who in other walks of life have the same income. For the purpose of valid classification what is required is not some imaginary difference but a reasonable and substantial distinction having regard to the purpose of the law." Then the question arose whether the above provision shall be struck down as a whole, or part of that provision which excluded Government servants from the general exemption alone should be struck down. The court held that taking into consideration the reasons which persuaded the legislature to grant the exemption in question, there was no doubt that it would have granted that exemption even if it was aware of the fact that the exclusion of the Government servants from that benefit would have been unconstitutional, and that, therefore, the general exemption should be upheld and extended also to the Government servants by striking down the provision which subjected them to the hostile treatment by excluding them from the general exemption. 10. 10. The principle that emanates from the above decision appears to be that, when the court finds that there is a discriminatory treatment of a class of persons, and that this classification has no nexus to the object of the legislation the court has to examine and find out what was the dominant object of the legislature; and the provision which accords with that object has to be upheld and the provision which is at variance with It, whether it be to the advantage or detriment of a few, has to be struck down. Applying the above principle to the relevant provisions of the Kerala Motor Vehicles Taxation Act 1963, it is clear that S.21 of the Act which gives a partial exemption from the tax Imposed by the Act in favour of co-operative societies of the kind mentioned therein has to be struck down. Accordingly, this Original Petition Is allowed. In the circumstances of the case, there will be no order as to costs. Allowed.