Telangana High Court invalidated the levy of an extra 2% tax by the Moosarambagh Regional Transport Office (RTO)
Last Updated on December 7, 2024 by NewsDesk SLC
In a recent ruling, the Telangana HC invalidated the levy of an extra 2% tax by the Moosarambagh Regional Transport Office (RTO) on a Mahindra XUV 700 acquired by Aloor Venkat Rohan Rao.
The RTO categorized it as a “second vehicle” according to the Telangana Motor Vehicles Taxation Act, 1963, which requires an 18% tax on vehicles exceeding Rs. 20 lakh, with an additional 2% for subsequent vehicles. Justice Nagesh Bheemapaka sided with the petitioner, determining that the extra tax is only applicable if an individual possesses two vehicles at the time of the new vehicle’s registration, not its purchase and he had sold his initial vehicle prior to applying for permanent registration of his new Mahindra XUV 700.
He argued that the supplementary tax specified in Schedule VII of the Act is relevant only when an individual owns more than one vehicle during registration. He substantiated his argument with evidence of the sale of his previous vehicle and cited the High Court’s ruling in Rohit Nayani v. State of Telangana, emphasizing that tax liability is determined by the date of physical registration, not temporary registration.
On the other side, the respondents, represented by Government Pleader M. Vigneshwar Reddy, upheld that the petitioner was obligated to pay the additional tax as his new vehicle met the criteria of a second vehicle under the Act. They posited that the temporary registration, issued upon purchase, implied dual ownership, thereby justifying the additional tax. The respondents underscored that the interpretation of registration should encompass the temporary registration process to forestall tax avoidance.
Court Verdict: In the judgment delivered by Justice Nagesh Bheemapaka, a detailed examination of the Telangana Motor Vehicles Taxation Act, 1963, and its pertinent schedules was undertaken. The Court concluded that at the time of registration must refer to the actual registration of the vehicle with the Transport Authority.
Citing: Rohit Nayani v. State of Telangana, a distinction between temporary and permanent registrations was highlighted. It was clarified that temporary registration serves as a provisional license issued by the dealer for a limited period, permitting vehicle operation until formal registration.
In Additionally, for the imposition of the supplementary 2% tax, ownership of a second vehicle must be established at the time of permanent registration. As the petitioner had sold his previous vehicle and presented evidence of the transfer, he did not meet the criteria of owning two vehicles during registration. Therefore, the additional tax imposition was deemed unjustified.
The Court criticized the RTO’s interpretation as an erroneous reading of the Act and instructed the Moosarambagh RTO to register the petitioner’s vehicle without demanding the additional tax. This decision highlights the significance of accurate statutory interpretation, ensuring that taxpayers are not encumbered with obligations beyond the legal framework.
