CHENNAI: Omnibus operators in the State can now heave a sigh of relief as Madras High Court has termed the levy of tax of Rs.600 per seat or berth per entry for omnibuses plying on contract carriage as ultravires and unconstitutional.
After hearing a plea to declare the amendment made to the Tamil Nadu Motor Vehicles Taxation (Amendment) Act 2012 in the Column (c) of Ninth Schedule with reference to levy of tax per entry for omnibuses, Justice V Ramasubramanian said that the challenge to the expression ‘per entry’ indicated in the second column of the Ninth Schedule relating to contract carriages in respect of which temporary licence is issued has to be sustained.
But the ‘per entry’ appearing along with the rate of tax appears to be confiscatory and not compensatory in nature and is declared ultravires and unconstitutional, said the court. State has claimed that the levy is a regulatory measure imposed to prevent tax evasion.
The judge refused to buy the argument that the enactment of the law was to regulate contract carriage operators, who used to take temporary licences (or special permits) for a specified duration of time and thereafter make number of trips with different seats or passengers.
The log book, the number of places covered and distance between the place of commencement of journey and the last destinations would make it clear as to how many days the operator would require to complete a journey. Instead of doing the same, the State has resorted to imposition of an additional burden that will fall not merely upon the misusers of temporary licence but also genuine users.
“The State has described the levy as preventing misuse. In some places, the State justified the levy by pointing out the cost of construction of roads, bridges etc. In some cases, it has vaguely spoken about additional expenditure involved in the maintenance of facilities, without clearly indicating the nature of the facilities and the cost of maintaining them,” said the judge.
The court also rejected the plea that the levy is violative of Art 14 (Right to equality). “It does not discriminate different classes of operators. The argument on the basis of Article 14 may not hold good,” the court observed.