Jaipur, Nov 3 (SocialNews.XYZ) The Rajasthan High Court has declared the Transport Department's action of collecting road tax from private cars and jeeps registered in other states, allegedly on the grounds that they had been operated in Rajasthan for more than 30 days, illegal, in the absence of a specific statutory notification.
A Division Bench comprising Chief Justice Sanjay K. Agrawal and Justice Sameer Jain ruled that the Transport Department cannot impose or collect taxes on non-transport vehicles registered in other states without a valid notification issued under the relevant provisions of the law.
While disposing of petitions filed by Harpi Core Network India Private Limited and others, the court directed the department to refund the taxes collected from the petitioners within 30 days and immediately release the seized vehicles.
Several vehicle owners had approached the Rajasthan High Court challenging the Transport Department's action against their private vehicles, which were registered in states including Haryana, Delhi, Punjab, Gujarat, Uttar Pradesh and Madhya Pradesh.
The petitioners submitted that lifetime road tax had already been paid in their respective states at the time of registration. However, during routine inspections, flying squads of the Rajasthan Transport Department intercepted several such vehicles and initiated enforcement proceedings.
The Rajasthan Transport Department maintained that these vehicles had been operating in Rajasthan for more than 30 days without payment of the prescribed state road tax. It argued that under Rule 28 of the Rajasthan Motor Vehicles Taxation Rules, vehicles remaining in the state beyond 30 days were liable to pay tax under the Rajasthan Motor Vehicles Taxation Act, 1951.
Challenging the department's action, the petitioners argued that their vehicles were already registered in other states and that the applicable lifetime tax had been paid there. They contended that there was no legal basis for demanding a lump-sum tax in Rajasthan merely because the vehicles had been used in the state for more than 30 days.
The petitioners also invoked Article 265 of the Constitution, which provides that no tax can be levied or collected except by authority of law. They argued that the Transport Department could not impose a tax merely by relying on administrative interpretations or notifications that did not specifically authorise such a levy.
The Chief Minister Bhajanlal Sharma-led state government defended the department's action, arguing that private vehicles registered outside Rajasthan were being used in the state for periods exceeding 30 days and were, therefore, liable for taxation under the applicable rules.
The government also cited a notification issued on July 10, 2024, which prescribed rates for one-time taxation of non-transport vehicles. It argued that the notification covered vehicles already registered in other states as well. Accordingly, the government maintained that the tax demands and seizure of vehicles were legally justified.
After hearing both sides, the High Court observed that the July 10, 2024, notification prescribed tax rates for passenger and goods vehicles. However, there was no separate notification under the relevant statutory provision specifically authorising the levy of one-time tax on private non-transport cars registered in other states.
The Bench held that merely mentioning vehicles registered in other states in a notification issued under a different provision does not fulfil the statutory requirement for imposing such a tax. The court clarified that when the law requires a specific notification for levying a particular tax, the government cannot collect it by relying on a notification issued under another provision.
Consequently, the court held that the one-time tax demand against private cars registered in other states could not be sustained on the basis of the existing notification.
The court directed the Transport Department to release the seized vehicles immediately and refund the tax collected from the petitioners within 30 days.
Source: IANS
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