HC trashes govt appeal for lifetime tax on non-KA vehicles

HC trashes govt appeal for lifetime tax on non-KA vehicles

'Automobiles registered outside state need not pay tax for up to a year'

HC trashes govt appeal for lifetime tax on non-KA vehicles

 In a major setback to the state government, the High Court on Friday dismissed its appeal against quashing of lifetime tax on vehicles registered outside Karnataka.

A division bench of Justices Jayant Patel and B V Nagarathna termed the amendment to the Karnataka Motor Vehicle Taxation (Amendment) Act, 2014, “unconstitutional”.

Passing the judgment, the bench said the government could not collect tax from non-Karnataka registered vehicles for up to 12 months. “A vehicle which is registered outside the state of Karnataka and is plying on the state roads for a period from 31 days up to 12 months cannot be subjected to tax,” the bench ruled.

The state had amended the KMVT Act in 2014-2015 to regulate vehicles registered outside Karnataka and aimed to increase its revenue by collecting lifetime tax by inserting section 3(1) of the Act on all such vehicles which were plying on its roads beyond 30 days.

The division bench noted that insertion of non-obstante (notwithstanding) Section 3(1) of the KMVT Act was against the Supreme Court order in Mahesh Gandhi vs Deputy Commissioner for Transport, Belagavi. The bench also struck down Section 47 of the Motor Vehicles Act, 1988, which talks about assignment of new registration mark on removal to another state.

Jagadev Biradar from Pune and others had approached the High Court challenging the KMVT (Amendment) Act, 2014. The Regional Transport Office had issued demand notices to many people for payment of tax and seized their vehicles when they failed to pay up. In March, a single bench of the High Court quashed the demand notices and declared the said Act unconstitutional.

The state government, along with the Transport Commissioner and the RTO, appealed the order, but the division bench dismissed their contentions.

‘Victory of justice’

Waseem Memon, lead campaigner of the NGO ‘Drive Without Borders’, described the ruling as victory of justice and fairness.

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