G. K. KRISHNAN ETC. ETC. vs THE STATE OF TAMIL NADU & ANR. ETC.

The Supreme Court upheld the enhancement of motor vehicle tax on omnibuses from Rs. 30 to Rs. 100 per seat per quarter under Section 4 of the Madras Motor Vehicles Taxation Act, 1931, rejecting claims that it was a device to eliminate competition with stage carriages and that it violated Article 301 and Article 14. The Court clarified that the motive behind the tax imposition is irrelevant if the government has the authority to levy it. Furthermore, it distinguished between regulatory taxes and restrictions on trade, asserting that a compensatory tax does not infringe upon the freedom of trade and commerce.