[cs_rajesh]

Originally Posted by SILVERWOOD

Please refer to the attached order which was pronounced by the Chief Justice of the Honourable High Court Of Telengana & AP.

Waseem

The statement highlighted is as follows:
In reference to this Rule, we have also checked up the provision
of sub-section (4) of Section 47 of the Motor Vehicles Act, 1988 (for
short ‘the Act’), which even does not empower the respondents to levy life time tax once again by this State. Sub-section (4) of Section 47 of the Act is also set out hereunder:
“(4) A State Government may make rules under Section 65
requiring the owner of a motor vehicle not registered within
the State, which is brought into or is for the time being in the
State, to furnish to the prescribed authority in the State
such information with respect to the motor vehicle and its
registration as may be prescribed. “


Dear Silverwood Sir,
The highlighted text part of the verdict, does it mean that court says the MV Act 1988 does _not_ empower the respondents (here, it is the state authority) to levy life time tax once again? Could it be interpreted as now the state may not levy LTT but may levy daily or weekly or monthly or annual or even bi / tri / multi annual tax, even 15 year tax?

And further, the State Authority could demand change in registration mark after the vehicle crosses one year stay in that concerned state (I suppose this as not mentioned in M V Act though, please correct me if I am wrong). I am asking this to clarify, if change in registration mark is necessary or just tax payment in that State suffices?

thanks in advance

Rajesh

[tsk1979]

Originally Posted by anand_hc

W

Why have state govt. Why can't HC decide how to run states?

HC has not decided anything. It has just said that the 30 days ruling is illegal as per the law.
So you should write to your representative to amend the motor vehicles act. For example you can write to your MP that they should table the new MVA bill in parliament that presence in a state for more than 20 minutes should result in life time tax.

[Asifgrkhan]

What I do not understand is why are most of us conflating registration with road tax.
- I understand that registration is a compliance and safety need. It ensures that authorities know where the owner of a certain vehicle resides in case of (a) an accident or (b) a traffic violation or (c) any illegality committed by the vehicle.
- Road Tax on the other hand is a naked money grab by state governments no doubt assisted by the false sense of civic compliance that some of us seem to have developed as people have started earning money. I am old enough to remember road tax being a few hundred and later a few thousand. I paid 3500 in 2008 for my 10 lakh rupee car in a eastern state which shall stay unnamed.
It was in the late 90s and early 2000s that state governments (pioneered by Maharashtra and later enthusiastically adopted by all the four southern states) figured out that they can start asking for ungodly sums of money by linking road tax to price of vehicle and the populace will happily pay up.
Remember, it all starts as a couple of percentage points, and before you know it, boom it is now at close to 20% in Karnataka. So much so that you are gifting a Kwid to the government everytime you buy a D segment vehicle.

We are perhaps a unique populace where we routinely work against our own interests. I have seen people on this board argue passionately against their own interest - happy in the assumption that these taxes they are paying is their civic duty.

NO. IT IS NOT.

The government, any government, in a democratic setup is subservient to the populace and exists at the pleasure of the citizenry - NOT the other way round. We seem to have forgotten this.

This persistence of people like SILVERWOOD - Waseem Memon - gives me a ray of hope that all is not lost and there is a spark of personal liberty alive and there are people who give a damn.

Originally Posted by ram1980

I see below statement from this article which gives the verdict summary

'The order also states that "If the vehicle is once registered in any state in India, it shall not be required to be registered elsewhere in India. But when a motor vehicle registered in one state has been kept in another state, for a period exceeding 12 months, the owner of the vehicle shall apply to a registering authority, within whose jurisdiction the vehicle then is, for the assignment of a new registration mark. This is as provided under section 46 and 47 of the MV Act.'

My reading of the above verdict is that registration is mandatory after 12 months but if a vehicle has paid its road tax in a separate jurisdiction, then it does not have to pay road tax again. What does road tax have to do with law enforcement.

Originally Posted by Bh.P

And most importantly, this may prompt people to buy vehicles in cheaper states, and use them in Bangalore.

So I am not sure how this rule will be enforced to discourage misuse.

Welcome to the real world of capital being free. If Karnataka wants to not lose tax revenue to other states, then it has to compete. They have to level their taxes with at least neighboring states if not more. This concept is not too different from corporate tax rates that states compete in to make sure that investments flow into their states and not the neighboring one.

After all, what is so exceptional about roads in Karnataka that you pay 14% road tax for your Swift when Delhi demands only 6%.

This is my 2 paisa. I just hope that the delinking of registration and road tax is what the judiciary was talking about.

SILVERWOOD - This might be an idea for a follow up PIL.

[SILVERWOOD]

Originally Posted by cs_rajesh

Dear Silverwood Sir,
The highlighted text part of the verdict, does it mean that court says the MV Act 1988 does _not_ empower the respondents (here, it is the state authority) to levy life time tax once again?

Originally Posted by Asifgrkhan

My reading of the above verdict is that registration is mandatory after 12 months but if a vehicle has paid its road tax in a separate jurisdiction, then it does not have to pay road tax again. What does road tax have to do with law enforcement.

SILVERWOOD - This might be an idea for a follow up PIL.

@Asif Sir.

You have hit the nail of the head.

This is what i have been trying to put across.Registration and Road tax are two different issues altogether.Registration is required to address security concerns. (Please see the attached clip for the same).

That is lot of FOOD for thought Asif Sir.I think there is a scope to file a PIL in The Honourable Supre and make all the states as respondents.

Waseem.

[binand]

Originally Posted by Asifgrkhan

So much so that you are gifting a Kwid to the government everytime you buy a D segment vehicle.

Loved that. :-) The best description of this government-sponsored landgrab I have seen or heard so far.

Originally Posted by Asifgrkhan

My reading of the above verdict is that registration is mandatory after 12 months but if a vehicle has paid its road tax in a separate jurisdiction, then it does not have to pay road tax again

With the court quashing the 2014 amendment, the law in Karnataka becomes what is set forth in the Mahesh Gandhi case, whose salient points are:

"the vehicles registered in one State are taken to another State and are stationed or remained in the other State for a period exceeding 12 months. In such a situation, the registration in the other State becomes compulsory."

"State Government has undoubtedly the competence to levy tax on vehicles"

"levy of lifetime tax under the Act on such vehicles [...] is linked to the registration of the vehicles."

"Part A5 of the Schedule to the Act indicates that levy is at the time of registration of new vehicle."

"Though in category B of Part A5, even vehicles already registered are also roped in for levy of lifetime tax, it should be understood only as in respect of vehicles mentioned in Category A, in the sense at the time of registration of new vehicles and vehicles already registered."

"The registration in both situations should be necessarily within the State, as otherwise, if the registration is outside the State, the question of levy of tax under the Act does not arise in respect of such vehicles, unless there is an express provision under the Act to charge lifetime tax for such vehicles also."

"the scheme of the Taxation Act is so made as to subject to levy of lifetime tax only on such vehicles which are registered in the State of Karnataka."

(Act in the above extracts is the KMVT Act).

This judgment is quite clear that KA government can levy tax only on vehicles registered in KA. It also clarifies that though the CMV Act makes it mandatory to register a relocating vehicle after 12 months in the new state, such a vehicle cannot be considered as a vehicle registered in Karnataka and hence the KA government cannot levy lifetime tax on these vehicles.

[Dry Ice]

Congrats Waseem on this milestone. Wishing you the best for the future!

Thank you for taking a stand and showing the way. We are with you in our own small ways

Hoping we get a similar favorable verdict in the JK case as well.

[KiloAlpha]

I think the Government of Karnataka got both greedy and lazy, and created this 30-day rule. Which, as per the High Court judgement, is illegal.
We all know about the greedy bit, but why lazy?
The Government, in order to ensure that people who have moved to Karnataka re-register their motor vehicles and pay tax, has to have a fair and above-board mechanism to identify such people and a clear legal procedure by which they are made to follow the due process of the law. Instituting these rules and procedures takes lots of time and effort, as does following the procedures.
Especially in a case like this, in a democratic country, there will also need to be guidelines for how to deal with itinerant people - those that move around a lot frequently. People who fall into the gray area of "maybe resident, or maybe not". Again, takes time and effort to follow these guidelines.
The Government decided, in all their "wisdom", to do away with all such bureaucratic hassles and simply bludgeon everyone with the 30-day rule.

Oops! That didn't work now, did it?

Given the large number of temporary residents in Bangalore (and all large cities in India), I think this is the time all State governments and the Centre wake up and create a common national process of re-registering, taxation, and tax refund, that is simple and hassle-free for the people to follow. This will need some shared infrastructure as well, like a national vehicle registry and shared police database.
I remember reading in the newspaper not so long ago that even the transport officials were beginning to get frustrated with the 30-day rule, because they were not so successful at getting money out of the super rich who evaded tax, but were mostly netting the middle class people.
And why do most middle class people, who are normally law abiding, not go through the process of paying tax and re-registering? Because it is a royal pain in all the wrong places. Rules, guidelines, procedures are not clear and vary greatly, and sometimes depend on the mood of the RTO. Remove the pain, and the compliance will go up dramatically automatically.

[SILVERWOOD]

Dear Friends,

We have filed a caveat yesterday before the Honourable High Court of Karnataka just in case Karnataka Government decides to file an appeal against the Judgement.

Definition: Caveat is an application filed by a legal person in a particular court of civil nature against one or more legal persons, seeking to be heard before passing any ex-parte order against him in any proceedings that may be filed by the said persons against him in that court.

PS:We have received the certified copy of the the Judgement.I will scan and upload the same ASAP.


Waseem Memon

[rednikhil]

Originally Posted by Asifgrkhan

Welcome to the real world of capital being free. If Karnataka wants to not lose tax revenue to other states, then it has to compete. They have to level their taxes with at least neighboring states if not more. This concept is not too different from corporate tax rates that states compete in to make sure that investments flow into their states and not the neighboring one.

Bang on!

No one questions the state govt when they announce freebies to multinational companies in the form of tax holidays, cheaper land etc; is the state not losing out on revenue here? On the contrary, it is seen as a positive step, as an investment for future gains, perhaps rightly so. Anyways, if you don't do it, a certain Mr Chandrababu may just walk away with the biggies!

But wait, once the biggies have set up shop, how about extending similar courtesies to the migrant population who come to the state to work in these firms? Here the state adopts the exactly opposite stance by bombarding them with frivolous litigation. Why so, you may ask? The answer is simply that the hapless individual has no other option but to succumb to the tax-terrorism. He has nowhere to run, he simply has to give in to this legalized extortion.
When will you ever start to invest in the individual, O state?

Salute you Mr Memon, for doing yeomen service to the professionals of this nation and state.

[sdp1975]

Originally Posted by Asifgrkhan

Welcome to the real world of capital being free. If Karnataka wants to not lose tax revenue to other states, then it has to compete. They have to level their taxes with at least neighboring states if not more. This concept is not too different from corporate tax rates that states compete in to make sure that investments flow into their states and not the neighboring one.

Similar reasonings were used to quash the Karnataka entry tax on cars :

“The object of our Constitution makers was free movement and exchange of goods throughout India. It is essential for the economy of India and for sustaining improving living standards of its people. It should ultimately lead to one-country-one-people concept and economic benefit of the development should reach every citizen wherever he lives. The people of the state must sink and swim together. The long-run prosperity and salvation lies in union and not division. Economic unity is the main force for achieving cultural and political unity and stability and progress can be achieved only by demolishing artificial boundaries and barricades and should be sidelined,’’ the judge said.

If a state’s economy could be prosperous because of tax holidays and lower tax rates, it shows the maturity of the political leadership and vibrant tax planning and marshalling of resources of that state.

“It is worthy of emulation by neighbouring states by way of free flow of goods and commerce so that people of both states are benefited. Such benefits extend beyond the state boundaries.

“If such a policy results in depletion in revenue to adjoining states, they must wake up to the hard realities of life and reduce the tax burden and extend the same benefits to people of the state as the economy, revenue and state also should improve and arrest the trend of its people going to neighbouring states to purchase motor vehicles.’’

Source

[SILVERWOOD]

Originally Posted by Bh.P

I am still confused on the enforcement of this law.


Even in such a case, people will find loopholes like taking the vehicle back to their home state at the end of one year, getting some proof like PUC there and comeback to Bangalore to beat the one year rule.

And most importantly, this may prompt people to buy vehicles in cheaper states, and use them in Bangalore.

So I am not sure how this rule will be enforced to discourage misuse.

+1.Thats my concern as well.

The only solution is to collect the entire tax of 15 years at the state border upon entry.This will negate misuse for sure.

Karnataka should bring in such amendment without wasting anytime. All Karnataka state borders can have Banks (extension counters) to issue Demand Drafts.

BTW:I wonder how the other 28 states are managing this issue or this problem is unique to Karnataka.

Waseem

[FuelInjector]

Originally Posted by SILVERWOOD

The only solution is to collect the entire tax of 15 years at the state border upon entry.This will negate misuse for sure.

BTW:I wonder how the other 28 states are managing this issue or this problem is unique to Karnataka.

Kudos Waseem. It is indeed a proud moment to cherish. Thanks for all your hardwork and tenacity.

I have always wondered that a registration number should be tied to a person and not a vehicle. Because the vehicle already has one - VIN!
This would cause the elimination of all unnecessary state specific guidelines. One country one road should be the goal. If at all the person sells and buys another car, the registration plate would be simply unscrewed from the old one and screwed into the new one. The goverment, while giving out aadhar cars, should also key in ones registration number (just like a PAN number etc).
The only downside i can think of this is the coffers of the state RTOs would be drier by a %.

Have seen a lot of outstation vehicles in the current state i reside in. No one has stopped or created trouble, unless the vehicle is caught in a mishap.

[sgiitk]

I think only one solution - hope it comes in GST. One nation one tax. Allow cars to move freely across states, no repeat taxation.

[Zappo]

I thought GST is general sales tax. How do you levy these road tax etc. through the GST route? Or are you saying that apply an all inclusive GST that also includes the one time cost of registering the car and paying the road tax on it? Then again, considering that Road Tax is a state matter, it will mean added complexity in cases where the person moves from one state to another.

[Chetan_Rao]

Originally Posted by Zappo

.......considering that Road Tax is a state matter, it will mean added complexity in cases where the person moves from one state to another.

Therein lies the crux of the matter!

Ownership of a tax/revenue header should be immaterial to a tax-paying end user. A citizen's contribution should begin and end at paying the necessary taxes, and if the federal and state governments want to bicker endlessly on who owns what proportion of the pie, they slug it out between themselves and leave the tax-payer out of the mess.

In a hypothetical scenario, a private employee moving states every two years and wanting to keep his car long-term will end up paying LTT road tax EIGHT times over a car's assumed lifetime of FIFTEEN years, with no practical hope of getting a dime back. In what world is that fair?

Our laws are outdated, from a time when constant mobility was restricted and rare for a variety of socio-economic-cultural reasons, not so any more. About time we brought them up-to-date with present ground realities.