N. Hegde Vs. State of Karnataka & Anr  Insc 194 (18 March 2005)
Variava, Dr. Ar. Lakshmanan & S.H. Kapadia Kapadia, J.
civil appeal by grant of special leave is filed by assessee against the
judgment and order dated 23.2.2000 of the Karnataka High Court in Writ Appeal
No.7000 of 1999 upholding the constitutional validity of Karnataka Motor
Vehicle Taxation (Amendment) Act, 8 of 1997 (hereinafter referred to as
"the said 1997 Act").
appellant was the owner of "Opel Astra" which was taxed on
"value basis" under the impugned 1997 Act. The said 1997 Act was
challenged on the ground that the levy of "life time tax" on the
value of the car exceeding 1500 CC was arbitrary, discriminatory and hit by
article 14 of the Constitution.
order dated 29.6.1999, the learned Single Judge held that the vehicle costing
Rs.6 lacs and above constituted a different class by itself and, therefore,
levy cannot be said to be discriminatory and violative of article 14 of the
by the said judgment, the appellant herein carried the matter in appeal to the
Division Bench, which, while upholding the decision of the learned Single
Judge, dismissed the writ appeal.
this civil appeal.
Suri, learned counsel appearing on behalf of the appellant submitted that the
impugned 1997 Act, as amended, violated article 14 inasmuch as the said Act has
made an unreasonable classification between the vehicles costing more than Rs.6
lacs and vehicles costing less than Rs.6 lacs.
counsel further contended that the motor vehicle taxes are compensatory in
nature. Such taxes, according to the learned counsel, can only be levied on the
basis of the capacity of the engine, the weight of the vehicle and the floor area,
as such parameters have nexus with the user and maintenance of the road.
Learned counsel submitted that by the introduction of one more parameter,
namely, the "value" of the vehicle, the impugned levy has ceased to
be regulatory/compensatory in nature, as such a parameter has no nexus with the
wear and tear of the public road. In the circumstances, it was urged that the
impugned Act was arbitrary, discriminatory and violative of article 14 of the
not find any merit in the above arguments. The above classification indicates a
measure or a rate of tax applied differently on different vehicles depending
upon various circumstances and so long as there is competence to levy and
collect the tax under Entry 57 List-II of the seventh schedule to the Constitution,
the levy cannot be struck down only on the ground that the incidence of the tax
falls differently on different categories of the vehicles. The burden has to be
distributed on different classes of vehicles or on different persons who owned
the vehicles. How equitable such tax could fall on different persons is not for
the Court to decide. Lastly, this matter is squarely covered by our judgment
delivered today in the case of The State of Tamil Nadu v. M. Krishnappan &
Another Etc. [Civil Appeal Nos.1869-1880 OF 2000].
the aforestated reasons, we do not find any infirmity in the impugned judgment
of the High Court. Accordingly, the appeal fails and is dismissed, with no
orders as to costs.