A state government granted licences to certain private operators to run stage carriages and contract carriages. The stage carriages could run only from one fixed point to another with fixed passengers without any right to pick up passengers en route. No such restrictions were imposed on contract carriages that were required to pay higher rates of tax than stage carriage operators. The contract carriage operators challenge the discriminatory nature of tax imposed on them. In respect of the above which one of the following is correct?

A. The tax on contract carriages is discriminatory and therefore unconstitutional

B. The tax is valid as there is reasonable classification between stage carriages and contract carriages in view of the facts stated above

C. The tax is valid as the same does not directly and immediately affect business

D. The tax is invalid because it is not compensatory in nature

Answer: Option B