A single bench of Kerala High Court upheld State Government’s decision to levy of life time tax on Taxi vehicles introduced in the Finance Bill, 2014.
The petitioner Kerala Travel Operators Association had challenged the Finance Bill, 2014 by which taxi vehicles are also imposed with an obligation to pay one time tax for fifteen years.
The petitioners contended that there is a different rate for payment of tax as far as taxi vehicles are concerned. The taxi vehicle can be used as a taxi vehicle in terms of Rule 82(2) of the Central Motor Vehicles Rules only for a period of nine years.
However, while registering the aforesaid vehicles to be used as taxi, petitioners are called upon to remit tax @15% for a period of fifteen years. This, according to the petitioners, is arbitrary and illegal taking into account the nature of use of the vehicle.
Rejecting the contentions of petitioner, the Court said that, It can therefore be seen that different types of vehicles have been differently classified. Even motor cabs and taxies are classified separately.
While dismissing the petition, the Justice A.M Shaffique observed that, “The one time registration which is for a period of 15 years is applicable to all vehicles. The same cannot be equated to grant of permit under Rule 82 of the Central Motor Vehicles Rules. In other words, the Motor Vehicle Taxation has nothing to do with the grant of permit for operating a vehicle as a tourist taxi or a motor cab. In such circumstances, merely for the reason that a motor cab or taxi can have a permit for 8 or 9 years by itself cannot be a reason for non payment of registration tax under Section 3. In other words, there is no misclassification as alleged by the petitioners”.
Read the full text of the Judgment below.
