Daijiworld Media Network-Bengaluru (RJP)

Bengaluru, Jul 2: The state High Court on Friday, has said that vehicles which visit the state need not pay tax in Karnataka for up to one year, dismissing the appeal made by state government.

A division bench of Justices Jayanth Patel and B V Nagarathna termed the amendment to the Karnataka Motor Vehicle Taxation (Amendment) Act, 2014, “Unconstitutional”.

The state had amended the KMVT Act in 2014-2015 by inserting section 3(1) of the Act on all such vehicles which were plying on its roads beyond 30 days. The move had the intention of increasing the revenue for the state.

The judgement said that government cannot collect tax from non-Karnataka registered vehicles for up to 12 months. “A vehicle which is registered outside the state of Karnataka and is plying on the state roads for a period from 31 days up to 12 months cannot be subjected to tax,” the judgement read.

The court also said that the insertion of non-obstante (notwithstanding) Section 3(1) of the KMVT Act was against the Supreme Court order in Mahesh Gandhi vs Deputy Commissioner for Transport, Belagavi.

The bench also struck down Section 47 of the Motor Vehicles Act, 1988, which talks about assignment of new registration mark on removal to another state.

Jagadev Biradar from Pune and others had approached the High Court challenging the KMVT (Amendment) Act, 2014. The Regional transport office had issued demand notices to many people for payment of tax and seized their vehicles when they failed to pay up.

In March this year, a single bench of the High Court quashed the demand notices and declared the said Act unconstitutional. The state government, along with the transport commissioner and the RTO, appealed the order, but the division bench dismissed their contentions.