TAPAN PUROHIT Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) In this group of writ petitions under Art. 226 of the Constitution of India, constitutional validity of second proviso to Section 4(l)(b) of the Rajasthan Motor Vehicle Taxation Act, 1951, hereinafter referred to as 'the Act of 1951', has been challenged.

(2.) The Writ Petition No. 2529/2002 is quite comprehensive, as such, it is regarded as respresentative of the contentions urged in support of the challenge. Petitioner purchased a motor vehicle being Maruti Car, hereinafter referred to as 'the vehicle', bearing Registration No. RJ-22/C-2866 from Smt. Laxmi Kanwar, hereinafter referred to as 'the vendor' on 9-11-2001 after payment of consideration agreed for. The vendor got the vehicle registered in her name on 28-6-2001 after completing necessary formalities in this regard and after payment of "One Time Tax" (in short 'the OTT) as per the provisions of the Act. The payment of OTT was accepted by the transport Authorities. The entry for payment of the OTT of Rs. 5,440/- was made in the Certificate of Registration; Petitioner after purchase of the said vehicle applied for transfer of registration of vehicle in this name. The second respondent asked the petitioner to deposit the fifty percent of the OTT for transfer of vehicle in view of the second proviso to Section 4(l)(b) of the Act, inserted by the Finance Act, 2001. The provision provides that on every transfer of ownership of motor vehicle mentioned in Section 4, an additional one time tax shall be payable at such rate as may be notified by the State Government in the official Gazette. Petitioner has challenged the validity of the said provision mainly on the ground of lack of legislative competence insuch as Entry 57 of List II of Seventh Schedule of the Constitution of India permits the State Government to impose a tax on vehicle only, where as the impugned provision provides levy to tax on person.

(3.) Is contended by Mr. Gajendra Maheshwari, learned counsel appearing for the petitioner, that Section 4(l)(b) of the Taxation Act provides for payment of OTT with a view to give relief to the tax payer, who could discharge liability of paying tax under the Act by depositing the OTT once and for all. Once such OTT is paid, the vehicle gets out of the purview of the Taxation Act and the same cannot be subjected to any further tax liability. It is, thus, submitted that liability to pay the tax is on the vehicle and not on the owner and, therefore if the OTT is paid in respect of a vehicle then there cannot be any liability to pay the tax in respect of such vehicle even on transfer. It is further submitted that imposition of additional tax on transfer of ownership is nothing but the tax on incidence of transfer in which the State is not competent being beyond the scope of Entry 57 of List II of Schedule VII. Learned counsel has heavily relied upon a Division Bench judgment of this Court in East India Hotels Ltd. v. State, reported in 2001 (3) WLC (Raj) 62 : (AIR 2001 Raj 286); wherein it is held that the property on which OTT has been paid, cannot be subjected to tax again on transfer of ownership. It was a case under the Rajasthan Land and Building Tax. It is submitted that the tax on land and building is akin to tax on vehicle under the Act of 1951.