SC tells Karnataka to refund tax on non-state vehicles


The court, however, allowed the state government to take an undertaking from the vehicle owners that they would have to deposit the tax again in case the state succeeds in its appeal.

A bench of Justices J Chelameswar and S Abdul Nazeer, once again, refused to stay the operation of the Karnataka High Court judgement of March 10, 2016, that had quashed the provisions of the Karnataka Motor Vehicles Taxation (Amendment) Act, 2014, as unconstitutional and ultra vires.

“We do not see any reason to suspend the operation of the judgement under appeal. However, we are of the opinion that the ends of justice will be met in this case by directing that the appellants (Karnataka government) would refund the amount of tax already collected, as and when a demand from the owner of the vehicle is made before them,” the bench said.

The court passed its order on an application filed by the state government seeking permission not to entertain about 190 applications, filed before district regional transport offices, for a refund, which amounted to Rs 36 crore.

On a plea by Additional Advocate General Devadatt Kamat that it would be difficult to trace the vehicle owners in case the state succeeded with its plea before the apex court, the bench said the authorities can take an endorsement from the owners that the refund of the amount would be subject to the outcome of the appeal.

The apex court had on February 13 refused to stay the high court judgement.

The high court has held that lifetime tax, that is levied at the point of registration of a vehicle in terms of Section 3 read with Part A5 of the Schedule to the KMVT Act, cannot be levied on a vehicle that is already registered merely on a presumption that a vehicle registered outside has remained in the state for a period exceeding 30 days.

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