In Brief
The Supreme Court upheld the Himachal Pradesh Passengers and Goods Taxation Act, 1955 as amended by the Amendment and Validation Act of 1997, which imposed passenger tax on employers providing free transport to employees and their children. The High Court had previously struck down the 1955 Act as ambiguous. The 1997 Amendment cured the defects by broadening definitions of 'business', defining 'fare' and 'road', and replacing the charging provision with clearer language for assessing tax on non-fare-paying passengers. The Court found the Amendment validly removed the judgment's basis without overreaching judicial power. However, exercising powers under Article 142, the Court made the amended liability effective only from 1 April 2023 onwards, sparing appellants (public sector power and irrigation entities) from anterior demands, balancing retrospective legislation with equitable relief for welfare-oriented public organisations.
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