Orissa High Court quashes STA order over tax collection from dealers

CUTTACK:  The Orissa High Court has quashed the instruction issued by the transport commissioner-cum chairman, State Transport Authority (STA) to all the regional transport officers (RTOs) to collect tax from motor vehicle dealers/manufacturers on the basis of a total number of vehicles possessed and registered during the entire year.

The instruction was issued by way of a circular on March 29, 2016. The motor vehicle dealers challenged it, but their petitions were rejected by a single-judge bench on May 18, 2017. Subsequently, a batch of writ appeals was filed. 

While allowing the writ appeals recently the division bench of Chief Justice S Muralidhar and Justice MS Raman observed that “disjointed reading of Section 5 of the OMVT Act has resulted in the learned Single Judge accepting the interpretation placed by the STA, which in the opinion of this court is erroneous”.

“In other words, this court is of the considered view that the instruction dated 29th March 2016 is ultra vires Section 5 of the OMVT Act and therefore cannot be sustained in law. Accordingly, this court quashes the impugned instruction dated 29th March 2016,” the bench ruled on December 21.

The court explained that the motor vehicle dealers under Section 5 of the OMVT Act are to pay in advance for the maximum number of vehicles for which the trade certificate (TC) has been issued to be kept in possession by them at any given point in time. Therefore, this tax is in respect of the total number of such vehicles as specified 
in TC.