2013 (6) TMI 782 - HC - Indian Laws

Summary

Issues Involved:
1. Quashing of the order directing payment of tax for the entire period of authorization.
2. Mandamus to accept tax on a quarterly basis in accordance with Section 4 of the Karnataka Motor Vehicles Taxation Act, 1957 (KMVT Act).

Summary:

Issue 1: Quashing of the order directing payment of tax for the entire period of authorization
The petitioner sought to quash the order dated 07.05.2013 by the JCT & Secretary, Karnataka State Transport Authority, which directed the petitioner to pay tax for the entire period of authorization. The petitioner, holding an All India Tourist Permit issued u/s 88(9) of the Karnataka Motor Vehicles Act, 1988, contended that the tax should be payable on a quarterly basis as per Section 4 of the KMVT Act. The respondent argued that the vehicle, covered by an All India Permit issued by the State Transport Authority, Nagaland, must pay taxes for the entire period of authorization, as monitoring the vehicle's movement throughout the year is impractical.

Issue 2: Mandamus to accept tax on a quarterly basis in accordance with Section 4 of the KMVT Act
The petitioner argued that u/s 4 of the KMVT Act, the owner has the choice to pay tax quarterly, half-yearly, or yearly. The respondent countered that the authorization issued by Nagaland is valid for one year, and the petitioner must pay taxes for the entire period as per the authorization. The court examined the provisions of the KMVT Act and the MV Rules, 1989, noting that tax is levied on all motor vehicles suitable for use on roads, irrespective of actual use. The court referred to precedents, including the case of STATE OF KARNATAKA vs K. GOPALAKRISHNA SHENOY, which upheld the validity of such tax demands.

Conclusion:
The court held that the demand for tax for the entire period of authorization is valid and has a rational nexus to the object of Section 4 of the KMVT Act. The petitioner's argument that the tax should be payable quarterly was rejected, and the writ petition was dismissed. The court emphasized that the reasonableness of taxation cannot be tested based on its adverse effect on the petitioner's business interests.