R.MAHALAKSHMI Vs. GOVERNMENT OF TAMILNADU

JUDGEMENT

(1.) The prayer in all the writ petitions is one and the same and the petitioners have sought for issuance of a writ of Declaration declaring Sections 4 and 7 of the Tamil Nadu Motor Vehicles Taxation (Amendment) Act, 2012 (Act 13 of 2012) insofar as it relates to insistence of Lifetime Tax for Transport vehicles covered under Part I and Part II of 7th Schedule and Part I of 8th Schedule as arbitrary, illegal and unconstitutional and hence they are disposed of by this common Order. For the sake of convenience, we mention the facts of the case in W.P.No. 15267 of 2012. The petitioner Mahalakshmi is the present owner of Toyota Innova vehicle and the said vehicle was originally purchased by M/s. Sona Mobility Services Limited from Lanson Toyota by invoice dated 31.5.2007 for a sum of Rs. 7,90,684/- and at the time of sale, a sum of Rs. 98,835.50 was also levied as Value Added Tax and a total sum of Rs. 8,89,519.50 was collected from the purchaser and the original owner obtained an All India Tourist Permit for the said vehicle for a period of five years from 11.7.2007 to 10.7.2012 and initially tax was paid for one year and thereafter, quarterly tax was paid for the said vehicle and the ownership of the vehicle as well as the All India Tourist Permit was transferred to the petitioner on 22.8.2011 and thereafter, she paid the quarterly tax and the permit was valid upto 10.7.2012 and at the time of renewal, the petitioner came to know about the Amending Act 13/2012 in which, provision has been made for compulsory payment of Lifetime Tax in respect of the vehicle of the petitioner, namely, Tourist Motor Cab, which falls under Part 2 of 7th Schedule and she has challenged the validity of Sections 4 and 7 of the Tamil Nadu Motor Vehicles Taxation (Amendment) Act, 2012 in the writ petition.

(2.) According to the petitioner, insofar as the new vehicles under Part I of 7th Schedule are concerned, tax at the rate of 10%, if the cost of the vehicle is less than Rs. 10 lakhs, and at the rate of 15% if the cost of the vehicle is above Rs. 10 lakhs, has been prescribed and in respect of the old vehicles, irrespective of the year of registration and irrespective of the quantum of tax that has already been paid by the registered owner, Lifetime Tax at the rate of 8.5% and 14.5% is insisted for vehicles costing less than Rs. 10 lakhs and more than Rs. 10 lakhs respectively and in respect of new motor vehicles (own vehicles) falling under part 1 of 3rd schedule, the tax at the rate of 10% is levied at the time of registration and insofar as the old motor vehicles (own vehicles) are concerned, the rate of tax is prescribed on the basis of the age of the vehicle, which starts from 8.75% of the cost of the vehicle and tapers down to 6% of the cost of the vehicle, if the vehicle is more than 11 years old and that being so, to treat the old tourist cab vehicles falling under Part 2 of the 7th Schedule differently and levying a flat rate of 8.5% of 14.5% of the cost of the vehicle as Lifetime Tax, is arbitrary, illegal, discriminatory and unjust in law; that there is no rational or nexus to treat existing registered tourist vehicles differently for the purpose of levy of Lifetime Tax without reference to the age of the vehicle or the tax that has already been suffered by such vehicles; levy of tax on the cost of the vehicle by including the tax already suffered by the vehicle (Value Added Tax) at the time of purchase is arbitrary; that Tourist Motor Cab and Tourist Maxi Cab, which require a separate permit, whose life varies depending upon the permit, cannot be equated to an own vehicle and payment of Lifetime tax cannot be insisted and it amounts to treating different classes of vehicles as one class and hence, there is violation of Article 14 of the Constitution of India; that levy of Lifetime Tax compulsorily in respect of old Tourist Motor Cab under Part 2 of 7th Schedule and compelling payment of quarterly tax in respect of old maxi cab under Part 2 of 8th Schedule is arbitrary and discriminatory; and that insistence upon the payment of Lifetime Tax irrespective of the age of the vehicle deserves to be declared as illegal and arbitrary. Similar averments have been made in other writ petitions challenging the said provisions of the Amendment Act.

(3.) An elaborate counter affidavit has been filed by the State stating that Lifetime Tax has been in vogue in Tamil Nadu for many years from 1998 and for own vehicles conversion to Lifetime Tax was made compulsory and by the Amendment Act 13/2012, levy is made compulsory to tourist Motor Cab also and a distinction has been maintained between the new vehicles and the old vehicles by giving the old vehicles (i.e. existing permit holders), a reduced Lifetime Tax of 8.5% as compared to 10% for new vehicles and the cost of the vehicle will be inclusive of the Value Added Tax or any other taxes or duties paid by the registered owner and this is in accordance with Rule 2(aa) of the Tamil Nadu Motor Vehicles Taxation Rules, 1974 and the petitioners have not questioned the validity of levy of Lifetime Tax for old tourist motor cab vehicles, but only plead that instead of flat rate of 8.5% of the cost of the vehicle, diminishing rates with reference to the age of the vehicle should have been fixed as in the case of motor cars for personal use covered by Part 2 of 3rd Schedule. It is further stated in the counter that tourist vehicles cannot be equated on par with motor cars and motor cycles which are meant for personal use and the levy of Lifetime Tax for own vehicles introduced by Tamil Nadu Act 27/98 was held to be not arbitrary and discriminatory and was upheld by the Supreme Court by its judgment dated 18.3.2005 in The State of Tamil Nadu v. M. Krishnappan & Another etc., 2005 2 CTC 290 and in the case of Tourist vehicles falling under Part 2 of the 7th Schedule, the compulsion of switching over to Lifetime Tax arises only at the time of renewal of the permit and at other times, it is only option to pay Lifetime Tax during currency of permit and hence, it is not necessary to have a graded rate of tax for old tourist vehicles as is done for motor cars and the levy of said tax is of compensatory nature and a different classes of vehicles have been levied tax at different rates taking into consideration their usage and therefore, there is no violation of Article 14 of the Constitution. According to the respondents, the impugned levy of Lifetime Tax is based on rational and reasonable classification founded on an intelligible differentia having a rational relationship to the object of the impugned levy.