Supreme Court lifts ban on registration of Diesel cars in Delhi, imposes environment cess

The Supreme Court today lifted the ban on registration of diesel vehicles with an engine capacity above 2000 cc. However, an environment compensation cess equal to 1% of the ex-showroom price of the vehicle has to be paid..Cars above 2000 cc can now be registered after the payment of this amount to the Central Pollution Control Board. The Board has additionally been directed to get an account created in a public sector bank for this purpose..The matter was heard by a Bench headed by Chief Justice TS Thakur, along with AK Sikri and R Banumathi JJ..Solicitor General Ranjit Kumar, representing the Central government, argued that the right to impose taxes, cess etc. is with the government and not with the judiciary..Senior Advocate Gopal Jain appeared for Toyota Kirloskar Motor. Jain was briefed by a team from Luthra & Luthra led by Senior Partner Vijay K Sondhi and comprising Managing Associate Cauveri Birbal Senior Associate Aranyak Pathak and Associate Avantika..Senior Advocates Gopal Subramanium and Mohan Parasaran represented Mercedes-Benz and were instructed by P&A Law Offices..The car manufacturers accepted the court’s proposition and submitted that they were ready to pay environment cess. Both, Subramanium and Parasaran made a voluntary offer of 1% of the ex-showroom price as cess, with a similar proposition made by Jain on behalf of Toyota Kirloskar..The Court thereupon modified its order of December, 2015 and lifted the ban imposed on registration of vehicles above 2000 cc..Regarding the issue of whether a similar cess needs to be imposed on cars with less than 2000 cc engine capacity, the Court chose not to decide the same at this stage.