Judgment :- (Prayer : Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of declaration declaring Act 13 of 2003 called as Tamil Nadu Motor Vehicles Taxation (Amendment) Act with reference to amendment in the first schedule to the Principal Act in Clause 2, in paragraph 1, in item (d), in column 2, increasing the tax from Rs.500/- per quarter to Rs.150/- per seat per quarter in so far as the members of the petitioner's Association are concerned, as arbitrary, illegal and ultra vires the Constitution of India.) The Honourable Chief Justice: In these writ petitions under Article 226 of the Constitution, the petitioners have challenged the constitutional validity of the Tamil Nadu Act 13 of 2003, in so far as it substitutes the rate of tax in Clause-8 of the First Schedule to the Tamil Nadu Motor Vehicles Taxation Act, 1974 (hereinafter be referred to as 'the 1974 Act' for short) in relation to vehicles owned by the educational institutions. 2. At the outset, it may be stated that the petitioners are educational institutions running schools and colleges and other institutes, all of them seeking to challenge the revised rate of tax for vehicles owned by the educational institutions, which has been brought into force by Act 13 of 2003 with effect from 01.8.2003. For the sake of convenience, we may mention the facts of W.P.No.33494 of 2006: 3. The petitioner is a registered society and is the umbrella organisation of all the educational agencies established and administered by the Catholic Church. The petitioner is conducting primary schools, middle schools, higher secondary schools, matriculation schools, teacher training institutes and technical institutes in the State of Tamil Nadu. Apart from these institutions, a number of nursery schools, special schools for mentally and physically challenged, the deaf and the dumb and the blind and Institutes for non-formal education are being run by the petitioner. Some of the schools of the petitioner are having vehicles, buses and vans to bring the students to the schools from far off places. The schools paid a flat tax of Rs.500/- per quarter per vehicle irrespective of the seats. Totally, they had to pay Rs.2000/- per annum per vehicle under Clause-8 of the First Schedule to the 1974 Act. Some of the schools of the petitioner are having vehicles, buses and vans to bring the students to the schools from far off places. The schools paid a flat tax of Rs.500/- per quarter per vehicle irrespective of the seats. Totally, they had to pay Rs.2000/- per annum per vehicle under Clause-8 of the First Schedule to the 1974 Act. The special schools were required only to pay at the rate of Rs.500/- per annum, which is one-fourth of the exemption granted to the normal educational institution vehicles. It is the case of the petitioner that many of the children using these vehicles are below 14 years, as they are in school education. By virtue of the Amendment Act, the tax has been increased from Rs.500/- per quarter to Rs.150/- per seat per quarter and the percentage of increase ranges between 450% and 1800%. 4. The revision of tax is challenged as unconstitutional, discriminatory, arbitrary and violative of Articles 14 and 21-A of the Constitution, besides being inconsistent with the Scheme of the 1974 Act. The main thrust of challenge is that the increase of tax for educational institution vehicles, by multiples defeats the constitutional objective of free and compulsory education enshrined in Article 21-A of the Constitution. The vehicles of the educational institutions are in no way generating any income or profit. They are not involved in any trade or commerce, because educational institutions are not commercial establishments, as held by the Supreme Court in T.M.A.Pai Foundation vs. State of Karnataka ( 2002 (8) SCC 481 ). The educational institutions are working only for 220 days per year. The vehicles are also operating only for a few hours in the morning and evening on the working days. They operate within the locality of the school. Therefore, the tax now levied is exproprietory and not compensatory in character and is being collected by the State Government for the purpose of augmenting its general revenue which is forbidden by the Constitution. The amendment Act treats the vehicles of commercial and industrial establishments and that of educational institutions on par as the tax payable by them is the same. Thus, the tax suffers from the vice of hostile discrimination and is therefore, liable to be struck down as violative of Article 14 of the Constitution. 5. The amendment Act treats the vehicles of commercial and industrial establishments and that of educational institutions on par as the tax payable by them is the same. Thus, the tax suffers from the vice of hostile discrimination and is therefore, liable to be struck down as violative of Article 14 of the Constitution. 5. In the counter affidavit filed on behalf of the State, the levy is sought to be principally justified inter alia on the ground that the vehicle taxes are levied to provide for revenue to the Government to meet the expenditure of maintenance, repairs of the roads, laying/re-laying of new roads, bridges, traffic control, pollution control, etc. It is stated that the motor vehicle taxes imposed under the 1974 Act are based on different criteria and road usage is one of the criteria, which is taken into consideration while taking the policy decision on the taxation of motor vehicles, but it is not the only consideration. While fixing the rate of tax to different classes of motor vehicles, the Legislature has adopted the classification as given under the Motor Vehicles Act, 1988. The motor vehicle tax is compensatory in nature and the tax is leviable so long as the vehicle is used on the road. Different classes of vehicles attract different rates of tax as could be seen from the taxation schedule, apart from the fact of extent of use of road and other valid factors which govern the fixation of rate. Therefore, there can be no comparison between one category of vehicle with another category of vehicle, since the permits are granted for different purposes and that the levy is in the nature of compensatory tax and that identifiable object exist behind the levy and there is nexus between the subject and object of the levy. It is stated that the expenditure incurred by the State on the maintenance and construction of roads and bridges is very much higher than the total tax on motor vehicles collected. The educational institutions are charging heavy fees as transport charges from the students. There are about 45,000 schools and few thousand colleges in Tamil Nadu. Of the above, only handful of institutions own buses and provide transport facilities to the students. The educational institutions are charging heavy fees as transport charges from the students. There are about 45,000 schools and few thousand colleges in Tamil Nadu. Of the above, only handful of institutions own buses and provide transport facilities to the students. No educational institution provides free conveyance to the students and the students who can afford to pay the cost of transportation charges to the educational institutions alone use the mode of transport. The poor and weaker sections use the free bus passes issued by the Government without any restriction. It is therefore denied that there was violation of Article 14 or Article 21-A of the Constitution. 6. Mr.R.Muthukumarasamy and Mr.Vijay Narayan, learned senior counsel appearing on behalf of the educational institutions submitted that the multiple increase in the rate of tax is totally arbitrary and unreasonable. The percentage of increase ranges between 450% and 1800%. The State Government cannot tax in the field of education except by way of compensatory tax and it is not the field to generate general revenue for the State. It is submitted that the amendment has prescribed the same charge for educational institution vehicles and private service vehicles. The educational institution vehicles cannot be treated on par with the vehicles of industrial and commercial establishments, which are plying for profit making and thus the Legislature has violated Article 14 of the Constitution by treating unequals as equals. It is submitted that the steep increase in tax for the educational institution vehicles goes to the root of the fundamental right of the children to right to education guaranteed under Article 21-A of the Constitution. 7. In reply, Mr.Raja Kalifulla, learned Government Pleader submitted that the Legislature was competent to tax the vehicles, and, hence, the impugned impost falls under Entry 57 List II of the Seventh Schedule of the Constitution. He submitted that the Supreme Court right from G.K.Krishnan's case reported in 1975 (1) SCC 375 to M.Krishnappan's case reported in 2005 (4) SCC 53 , has held that the classification adopted by the 1974 Act for the purpose of Schedules, i.e. rate of taxation is intelligible, and has nexus to the object sought to be achieved by the enactment. He submitted that it is well settled that the party claiming violation of Article 14 must place material before the Court to satisfy the Court of the violation. He submitted that it is well settled that the party claiming violation of Article 14 must place material before the Court to satisfy the Court of the violation. In the present case, the petitioners have not placed any material to show violation of Article 14 of the Constitution. He submitted that the primary object and the essential purpose of legislation must be distinguished from its ultimate or incidental results or consequences. A tax or fee levied by the State with the object of augmenting its finances and in the reasonable limits does not ipso facto trench upon the right to education envisaged by Article 21-A of the Constitution. He submitted that the educational institutions are charging heavy fees for the transportation facilities. None of the educational institutions provides conveyance facility free of cost and the facilities are mostly utilised for generating resources for the institutions rather than a service to the students. 8. Before proceeding to consider the rival contentions, it is essential to discuss the relevant statutory provisions. Section 2(11) of the Motor Vehicles Act, 1988 defines the expression 'educational institution bus' to mean an ominibus, which is owned by a college, school or other educational institution and used solely for the purpose of transporting students or staff of the educational institution in connection with any of its activities. Section 3(1) of the 1974 Act inter alia provides that the tax shall be levied on every motor vehicle used or kept for use in the State of Tamil Nadu at the rate specified for such vehicle in the First Schedule or in the Second Schedule or in the Third Schedule, as the case may be. Under section 3(2) of the said Act, the Government is empowered, by notification, to increase the rate of tax specified in the Schedules from time to time, provided such increase, at a given time, shall not, in the aggregate, exceed fifty per cent of the rate specified in the respective Schedule, as the case may be. By the Amendment Act 13 of 2003, an amendment was made to the First Schedule in Clause 8, which reads as follows:- ''8. Motor vehicles, other than those liable to tax under the foregoing provisions of this Schedule, weighing more than 3000 kgs. By the Amendment Act 13 of 2003, an amendment was made to the First Schedule in Clause 8, which reads as follows:- ''8. Motor vehicles, other than those liable to tax under the foregoing provisions of this Schedule, weighing more than 3000 kgs. unladen and covered by private transport vehicle permit and those in respect of which private service vehicle permit is required under the Motor Vehicles Act, 1988 (Central Act 59 of 1988) – Quarterly Tax Rs. (a) In respect of vehicles owned by educational institutions (educational institution bus) - For every person (other than the driver) which the vehicle is permitted to carry ... 150.00 (b) In other cases - For every person (other than the driver) which the vehicle is permitted to carry .... 150.00 9. In Automobile Transport Limited vs. State of Rajasthan ( AIR 1962 SC 1406 ), the Supreme Court held that it would not be right to say that a tax is not compensatory because the precise or specific amount collected is not actually used for providing any facilities and that a working test for deciding whether a tax is compensatory or not is to enquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities, and that it would be impossible to judge the compensatory nature of a tax by a meticulous test and, in the nature of things, it could not be done. It is well to remember the practical administrative difficulties in imposing a tax at a rate per mile. It is always difficult to evolve a formula which will in all cases ensure exact compensation for the use of the road by vehicles having regard to their type, weight and mileage. Rough approximation, rather than mathematical accuracy, is all that is required. The Supreme Court quoted with approval a passage from the judgment of the High Court and that passage runs as follows:- ''..... We find that in 1952-53 income from motor vehicles taxation under the Act was in neighbourhood of 34 lakhs. In that very year, the expenditure on new roads and maintenance of old roads was in the neighbourhood of 60 lakhs. In 1954-55, the estimated income from the tax was 35 lakhs, while the estimated expenditure was over 65 lakhs. We find that in 1952-53 income from motor vehicles taxation under the Act was in neighbourhood of 34 lakhs. In that very year, the expenditure on new roads and maintenance of old roads was in the neighbourhood of 60 lakhs. In 1954-55, the estimated income from the tax was 35 lakhs, while the estimated expenditure was over 65 lakhs. It is obvious from these figures that the State is charging from the users of motor vehicles something in the neighbourhood of 50 per cent of the cost it has to incur in maintaining and making roads." 10. The same principle was followed in G.K.Krishnan vs. State of Tamil Nadu ( AIR 1975 SC 583 ); in International Tourist Corporation vs. State of Haryana ( AIR 1981 SC 774 ); and in Malwa Bus Service (Pvt.) Ltd., vs. State of Punjab ( AIR 1983 SC 634 ). 11. In State of Tamil Nadu vs. M.Krishnappan & Others (Vol. III (2005) SLT 314), S.H.Kapadia, J. speaking for the Bench, has observed in para 18 as follows:- ''18. It is well to remember that the State maintains old roads and makes new ones. These roads are at the disposal of those who use motor vehicles either for private purpose or for trade or commerce. India is a cost-push economy. It has high rate of inflation. The costs of maintenance as well as the costs of material used in the maintenance of the roads increases by the day. This naturally costs the State, which has to find funds for making new roads, and for maintenance of those that are in existence. The impugned tax is regulatory and compensatory in nature in the sense that it is imposed to meet the increasing costs of maintenance and upkeep and to that extent it is not plenary. However, as stated above, the limited question is: whether the tax ceases to be compensatory and regulatory with the introduction of ''weight-cum-value" index and whether the said index is contrary to the scheme of the said 1974 Act." 12. In a recent Constitutional Bench judgment in Jindal Stainless Ltd.(2) vs. State of Haryana (2006) 7 SCC 241 ), the Supreme Court reiterated that the doctrine of ''direct and immediate effect" of the impugned law on trade and commerce under Article 301 as propounded in Atiabari Tea Co. In a recent Constitutional Bench judgment in Jindal Stainless Ltd.(2) vs. State of Haryana (2006) 7 SCC 241 ), the Supreme Court reiterated that the doctrine of ''direct and immediate effect" of the impugned law on trade and commerce under Article 301 as propounded in Atiabari Tea Co. Ltd. vs. State of Assam ( AIR 1961 SC 232 ) and the working test enunciated in Automobile Transport (Rajasthan) Ltd. vs. State of Rajasthan ( AIR 1962 SC 1406 ), cited supra, for deciding whether a tax is compensatory or not vide para 19 of the Report (AIR), will continue to apply and the test of ''some connection" indicated in para 8 (of SCC) of the judgment in Bhagatram Rajeevkumar vs. CST (1995 Supp (1) SCC 673) and followed in State of Bihar vs. Bihar Chamber of Commerce (1996) 9 SCC 136 ) is not good law. The Court held that applying the above tests/parameters, whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment facially or patently indicates quantifiable data on the basis of which the compensatory tax is sought to be levied. The Act must facially indicate the benefit which is quantifiable or measurable. It must broadly indicate proportionately to the quantifiable benefit. If the provisions are ambiguous or even if the Act does not indicate facially the quantifiable benefit, the burden will be on the State as a service/facility provider to show by placing the material before the Court, that the payment of compensatory tax is a reimbursement/ recompense for the quantifiable/measurable benefit provided or to be provided to its payer(s). 13. It is seen from the counter affidavit filed by the State of Tamil Nadu that for the year 2003, a sum of Rs.1052.16 crores had been spent not only for the maintenance of the roads but also for the construction of the new ones and that the receipt from the vehicle tax was only Rs.567.56 crores. As far as the year 2005-2006 is concerned, the total expenditure came to more than Rs.2202 crores whereas the return from the vehicle tax was only Rs.910 crores. The material placed on record unmistakably shows that the tax imposed is part of the regulatory measure and is reimburse/recompense to the service/facility provided. 14. As far as the year 2005-2006 is concerned, the total expenditure came to more than Rs.2202 crores whereas the return from the vehicle tax was only Rs.910 crores. The material placed on record unmistakably shows that the tax imposed is part of the regulatory measure and is reimburse/recompense to the service/facility provided. 14. It is undeniable that there have been vast changes in the road system of all the States in India during recent years and the State of Tamil Nadu is no exception. The roads themselves have very greatly increased in extent. There is also a like increase in road traffic. The number of motor vehicles, both passengers vehicles and goods vehicles, which use the roads has gone up. The cost of maintenance of roads has gone up correspondingly. The spiralling inflation has added to the mounting costs. Without the repair, upkeep, maintenance and provision for depreciation of roads, transportation would itself become impossible. Motor vehicles which stand in direct relation to such roads should, as held in the decisions referred to above, contribute towards the cost incurred for the aforesaid purposes. Naturally, the rates of taxes on motor vehicles have also constantly and inevitably risen in every part of the country. Merely because the petitioners are imparting education does not mean that they are not liable to pay the vehicular tax for the purpose of repair, maintenance and upkeep of the roads. The educational institution vehicles not only belong to the schools but also to various colleges including professional colleges. It has been brought on record that many schools and colleges charge heavy fees towards transportation charges. It is not unreasonable to ask the management of such institutions to contribute towards the cost of maintenance of roads etc. as they happen to belong to a class having a special and direct benefit of the facilities so provided. When they are taxed, they are paying a price for something which makes their movements safer, easier and more convenient. What is to be seen by the Court in such cases is only whether what is recovered by way of tax is in truth and substance either a contribution towards the construction and maintenance of the roads, bridges and other facilities that are necessary for providing a smooth transport service or an exaction far in excess of what is needed for providing such facilities. Courts, however, cannot insist upon exact correlation between the tax recovered and the cost so incurred because such exact correlation is in the very nature of things impossible to attain. There may be in some cases a little excess recovery by way of taxes. That by itself should not result in the nullification of the law imposing the tax if the extent of such excess is marginal having regard to the total cost involved. Therefore, the submission of the petitioners based on Article 21-A is devoid of any merit and is liable to be rejected. 15. We also do not find that the impugned levy is discriminatory or arbitrary so as to violate Article 14 of the Constitution. In Twyford Tea Co. Ltd. vs.State of Kerala (1970) 1 SCC 189 ), Hidayatullah, J. speaking for the Constitution Bench spelt out the principles governing the application of Article 14 to the taxing statutes. It was held that the State does not have to tax everything in order to tax something. The State enjoys a wide discretion in the matter of taxation and enjoys more freedom for classifying the objects to be taxed and the rates of taxation. The burden for proving discrimination is always heavy on the person who alleges discrimination and heavier still when a taxing statute is under attack. That the State can validly pick and choose one commodity for taxation and the same is not open to attack under Article 14 on the ground that the same result must follow when the State picks out one category of goods and subjects it to the taxation. 16. In Khandige Sham Bhat vs.Agricultural ITO ( AIR 1963 SC 591 ), a Constitution Bench of the Supreme Court, while pointing out that the taxation law is not an exception to the doctrine of equality, clarified: ''But in the application of the principles, the courts, in view of the inherent complexity of fiscal adjustment of diverse elements, permit a larger discretion to the legislature in the matter of classification, so long it adheres to the fundamental principles underlying the said doctrine. The power of the legislature to classify is of 'wide range and flexibility' so that it can adjust its system of taxation in all proper and reasonable ways." 17. The power of the legislature to classify is of 'wide range and flexibility' so that it can adjust its system of taxation in all proper and reasonable ways." 17. In Ganga Sugar Corporation Ltd. vs.State of U.P. (1980) 1 SCC 223 ), a Constitution Bench of the Supreme Court observed: ''Even so, taxing statutes have enjoyed more judicial indulgence. This Court has uniformly held that classification for taxation and the application of Article 14, in that context, must be viewed liberally, not meticulously." 18. In a recent decision of the three Judge Bench of the Supreme Court in Mohan Das N.Hegde (D) Thr.LRs. vs.State of Karnataka (Vol.III SLT 259), the Court while upholding the levy of vehicle tax on value basis, held that the levy cannot be struck down only on the ground that the incidence of the tax falls differently on different categories of the vehicles. The burden has to be distributed on different classes of vehicles or on different persons who owned the vehicles. How equitable such tax could fall on different persons is not for the Court to decide. 19. In International Tourist Corporation vs. State of Haryana ( AIR 1981 SC 774 ), the Supreme Court rejected the submission of the appellant that the unequals were treated alike for the purpose of payment of tax. In para 13, the Bench observed thus: ''13. Shri Mridul's second submission was that the levy made on vehicles passing through Uttar Pradesh from a place outside, to a place outside Uttar Pradesh was violative of Article 14 since these vehicles were not allowed to pick up or set down passengers or goods at any place within Uttar Pradesh, unlike vehicles holding permits granted by authorities having jurisdiction within Uttar Pradesh which were permitted to pick up and set down passengers, notwithstanding the fact that the tax payable by all of them was the same. Thus it was said unequals were treated alike for the purpose of payment of tax. We see no force in this submission. The tax is payable because of the user of the roads while the question of picking up and setting down passengers and goods at wayside stations enroute is dependant on the conditions of the permit and the reciprocal agreements between the States. The one has nothing to do with the other and we are unable to see any violation of Article 14." 20. The one has nothing to do with the other and we are unable to see any violation of Article 14." 20. We find no merit in the contention advanced by the petitioner that by charging the same rate to the educational institution vehicles and the private service vehicles, the State has violated Article 14 of the Constitution. As observed by the Supreme Court in M.Krishnappan's case, cited supra, levy is a constitutional concept, whereas collection of a tax as well as incidence of tax comes within the statutory measure. The mode of collection or the incidence of tax cannot be the conclusive test to decide the nature of the levy. The nature of the levy is a concept different from the mode of collection of tax. Levy is a constitutional concept whereas mode of collection of tax is a statutory concept. They stand on different footings. Secondly, it is important to remember that a tax is generally imposed by reference to economic activities or transactions which exist in the real world. When an economic activity is to be valued, it is open to the law maker to take into account various factors including the paying capacity of the user, the value of the vehicle, the economic life of the vehicle etc. It is for the Legislature to decide on what objects to levy what rate of tax and it is not for the Courts to consider whether some other objects should have been taxed or whether a different rate should have been prescribed for the tax. It is also to be noted that the Legislature is competent to classify persons or properties into different categories and tax them differently, and if the classification thus made is rational, the taxing statute cannot be challenged merely because different rates of taxation are prescribed for different categories of persons or objects. 21. In the instant case, the petitioners beyond merely alleging violation of Article 14, have not furnished any material to substantiate the charge of violation of the equality clause. The plea of the petitioners that the levy is violative of Article 14 of the Constitution is also liable to be rejected. 22. 21. In the instant case, the petitioners beyond merely alleging violation of Article 14, have not furnished any material to substantiate the charge of violation of the equality clause. The plea of the petitioners that the levy is violative of Article 14 of the Constitution is also liable to be rejected. 22. The learned counsel for the petitioners submitted that the levy was stayed by this court since 2003 and in view of the stay, the enhanced taxes are not paid nor recovery from the students is made and the students have passed out and gone and under the circumstances, recovery of past dues will put a very heavy burden on the educational institutions. It is submitted that the State is empowered under Section 20A to grant remission of tax on such conditions as may be prescribed by the Government. The petitioners are at liberty to make representation to the Government and if such representation is made within four weeks the Government may consider the same sympathetically and take appropriate decision in accordance with law. 23. The petitions are dismissed. Consequently, the connected miscellaneous petitions are also dismissed. No costs.