Karnataka High Court reserves judgment in non-KA lifetime tax appeal

Owners of vehicles in Bangalore registered in other states will be closely watching the verdict of the Karnataka High Court in the matter relating to payment of lifetime tax..Today, a Division Bench of Justices Jayant Patel and BV Nagarathna reserved judgment in the matter..In 2014, the state government introduced the Karnataka Motor Vehicles Taxation (Amendment) Act, seeking to levy a lifetime tax on those vehicles plying in the state which were registered outside Karnataka. 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..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..When the matter came up for hearing last month, a single bench of Justice Anand Byrareddy ruled in favour of the petitioners and declared the Act 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 MV 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..As a consequence of the order, owners of non-Karnataka registered vehicles would not have to pay a lifetime tax until 12 months, after which the vehicles would have to be re-registered as per Section 47 of the MV Act. However, the state government challenged the decision of the single judge..When the matter came up for hearing today, Additional Advocate General AS Ponnanna led the arguments for the state. He argued that registration and taxation were two different aspects, a submission the bench was reluctant to accept. Justice Nagarathna went on to ask a few questions..“How will you determine whether a person has been in the state for more than 31 days? What if his work requires him to keep travelling to and from the state?”.In response, the AAG submitted that the KMVT Act provides for a refund of the lifetime tax, as per Section 7(3). However, the bench said that the provision would only apply for owners of vehicles registered in the state. The bench then reserved judgment..Senior Advocate Jayakumar S Patil, along with Karan Joseph, appeared for one of the petitioners. Outside the courts, the ‘Drive Without Borders’ campaign has been garnering support across the city..During today’s hearing, it appeared that the Bench was not in favour of overturning the earlier decision. However, it is not certain as to when the bench will pronounce its judgement, with the Karnataka High Court closing for summer vacations on May 2..On a lighter note, at the end of today’s proceedings, Justice Patel, who was transferred from the Gujarat High Court in February this year remarked in jest,.“I was thinking of bringing my car here from Gujarat, but now I will have to think twice!”