ARTICLES 14 & 19 OF THE CONSTITUTION
IN THE HIGH COURT OF JUDICATURE AT MADRAS, while deciding the Writ Appeal No. 4119 of 2003 and W.P. Nos. 14905, 15327-15328 & 15559-15560 of 2001 and W.A.M.P. No. 6814 of 2003, on 9.6.2009 in re: MADRAS HIRE PURCHASE ASSN. vs U.O.I, it was held as follows:-
QUOTE: It is well settled that though taxing laws are not outside Article 14, however, having regrd to the wide variety of diverse economic criteria, that go into the formulation of a fiscal policy, legislature enjoys wide lattitude in the matter of selection of persons, subject matter, events etc., for taxation, if there is equality and uniformity within each group, the law would not be discriminatory. The learned Additional Solicitor General for the respondents submitted that all the banking companies which are carrying on similar hire purchase/leasing transactions are paying service tax without any protest as service element is involved.
A taxing statute is not per se, a restriction of the freedom under Article 19(1)(g). The policy of a tax, in its effectuation, might, of course, bring in some hardship in some individual cases. But that is inevitable, so long as law represents a process of absorption from the generality of cases and reflects the highest common factor. Every cause, it is said, has its martyrs. Then again, the mere excessiveness of a tax, or even the circumstance that its imposition might tend towards the diminution of the earnings or profits of the persons of incidence does not, per se, and without more, constitute violation of the rights under Article 19(1)(g). In SONIA BHATIA v. STATE OF UTTAR PRADESH – 1981-2-SCC-585, it was held that “the Act seems to implement one of the most important constitutional directives contained in Part IV of the Constitution of India. If, in this process a few individuals suffer servere hardship that cannot be helped, for individual interests must yield to the larger interests of the community or the country as indeed every noble cause claims its martyr.”
For the said reasons, the averments that levying of service tax on hire purchase/leasing transaction is violative of Articles 14 and 19(1)(g) of the Constitution is also rejected. UNQUOTE
[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_mad_wa_4119]
HIGH COURT ORDERS
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