Vehicles registered outside Karnataka need not pay lifetime tax (for 12 months): Karnataka HC

Even as Bangaloreans who own vehicles registered in other states were faced with the prospect of a paying a lifetime tax for their vehicles, the Karnataka High Court today struck down the Karnataka Motor Vehicles Taxation (Amendment) Act..A bench of Justices Jayant Patel and BV Nagarathna had reserved judgment in the matter back in April..By way of background, in 2014 the state government had introduced the Amendment Act, seeking to levy a lifetime tax on those vehicles registered outside Karnataka which were in the State for more than thirty-one days. The amendment affected a number of people travelling to and from Bangalore on work purposes, prompting them to file writ petitions in the High Court, challenging the constitutional validity of the Act..In March this year, a single judge bench of Justice Anand Byrareddy held the Act to be unconstitutional. The court observed in that order that the levy of lifetime tax is directly linked to the registration of the vehicle, an aspect covered by the central Motor Vehicles Act. Thus, it was held that the state does not have the legislative competence to pass a law levying a lifetime tax on vehicles which are already registered elsewhere. This was in tune with another judgment of the High Court passed in the Mahesh Gandhi case..The state government filed a writ appeal against this decision, with Additional Advocate General AS Ponnanna appearing for the state..The provisions relevant to the matter are Sections 46 and 47 of the Motor Vehicles Act, 1998, and Section 3 of the KMVT Act, read with Part A5 of the Schedule. Section 46 states that a vehicle registered in any state shall not be required to be registered anywhere else in India. Section 47 contemplates the assignment of a new registration mark for owners whose vehicles have been registered in one state, but have been kept in another for a period exceeding 12 months..The explanation to Section 3 of the KMVT Act provides that owners of vehicles registered in other states and kept in Karnataka for more than 31 days would be liable to pay a lifetime tax..It was this very explanation that was found to be problematic by Justices Patel and Nagarathna in court today. The bench upheld the order passed by the single judge, and dismissed the state’s appeal..Today’s decision marks a victory for the ‘Drive Without Borders’ campaign started by Waseem Menon who quit his job to pursue this case full-time. One of the petitioners was represented by Senior Advocate Jayakumar S Patil, briefed by Karan Joseph..Last edited at 12:12 hrs on July 2, 2016