The Madras High Court has decalred that the amendment made to Tamil Nadu Motor Vehicles Taxation Act,1974, by the government, which imposed a tax on omni buses plying in the state as ultra vires and unconstitutional.
Passing the orders on a petition by All Omni Bus Owners and Operators Association against the amendment, the bench comprising Justices V Ramasubramnian and N Kirubakaran yesterday said "the expression 'per entry' appearing along with the rate of tax indicated in the second column of the Ninth Schedule to the Tamil Nadu Motor Vehicles Taxation Act, 1974, as against the clause (c) therein covering contract carriages of Omni buses, is declared ultra vires and unconstitutional."
The judges held that the tax based on 'per entry' appears to be confiscatory and not compensatory in nature.
The matter relates to the amendment brought to the Tamil Nadu Motor Vehicles Taxation Act, 1974, by the state government in 2012, imposing a tax of a fixed amount based on "per seat per entry" on omni buses hired on contract carriage license for a specified period.
Alleging that the temporary permits issued to the carriages were frequently misused by the operators by plying with the same permit several times within the stipulated period, the state government justified its amendment.
The bench said, "The Act made a clear distinction between genuine operators who adhered to the terms and conditions of the licenses/permits granted to them and those who violated the terms and conditions."
"But, the impugned enactment by the state of Tamil Nadu does not make a distinction between those who comply with the law and those who do not."
The court also observed that in the absence of any prescription in the temporary license or special permit, to the effect that they cannot make more than one entry into the state, the multiple entries made by the operators into the state cannot be termed as a violation of the conditions of the permit or license.
The very fact that there could be several entry points into the state of Tamil Nadu even before one onward journey could be completed, has been completely lost sight of.
The expression "trip" appears to have been taken as a synonym to the expression "entry". Therefore, the contention that the impugned provision is penal in nature has to be upheld," it said.
