A vehicle which is registered outside the State of Karnataka and plying on the State roads for a period from 31 days up to 12 months cannot be subjected to tax under the Act, the Court observed.
The Division Bench of Karnataka High Court has upheld a Single Bench judgment which had quashed the Karnataka Motor Vehicles Taxation [Amendment] Act, 2014, which sought to levy lifetime tax on motor vehicles registered outside the State of Karnataka, in case they have been in the State for a period exceeding thirty days, as unconstitutional and ultra vires.
The Single Bench of the High Court had observed that a lifetime tax that is levied at the point of registration of a vehicle cannot be levied on a vehicle that is already registered, merely on a presumption that a vehicle registered outside the State of Karnataka has remained in the State of Karnataka for a period exceeding thirty days. The state preferred Writ appeal against this Judgment.
The Bench comprising of Justices Jayant Patel and B.V.Nagarathna, while dismissing the Writ Appeal filed by the State against the Single Bench judgment, held as follows
Hence, Explanation - 2 to Section 3(1) of the Act is held to be ultra vires Article 246 (3) of the Constitution and also Section 47 of MV Act, 1988 and hence, it is struck down. Therefore, any vehicle coming from outside Karnataka, which is registered in the State of Karnataka as per Section 47 of MV Act, 1988 is liable to pay tax under Section 3(1) of the Act r/w Schedule A5 Group-B.
Read the Judgment here.