[binand]

I too was refreshing the KA High Court website eagerly waiting for the judgment to be posted. :-) Now that is is available, a quick layman's reading throws out the following points.

(I have collected the relevant documents here: https://www.dropbox.com/sh/eeh6mad9l...gRWI6ueCa?dl=0).

1. The 2014 amendment is ruled ultra vires (page 36 of the judgment). That is, the amendment was made by an agency (KA govt) who did not have the power to make it. Thus, all actions taken under the authority of the amendment will have to be reversed - which means, everyone who has been asked to pay LTT on the basis of this amendment will have to be reimbursed (with interest). The people who have paid up should consult lawyers to get their money back; they have a good case.

That also means that the KA govt will be very reluctant to let go of the 70 crore or so collected in the last two years; they will surely appeal this decision. First in high court itself and then all the way to the supreme court.

2. More interesting is the observation of the court in page 34, that "If the vehicle is once registered in any State in India, it shall not be required to be registered elsewhere in India". If you look at the CMV Act, there is a clear distinction between registering a vehicle and obtaining a registration mark for display on the vehicle. A vehicle has to be registered only once, and when it moves across state borders all the owner has to do is to obtain a new registration mark from the new RTO within 12 months. The liability to pay LTT arises at the point of registration. Taken all this together, I think this is what it means: You need to pay LTT only the point of registering the vehicle for the first time (buying from the dealer). If you move across states since then, you only have to change the registration mark (MH-01-AA-1111 to KA-02-BB-2222 or whatever) and that too, only within 12 months of moving. There is no obligation to pay LTT even in this case.

Obviously IANAL etc., so these need to be vetted. But if my interpretation holds, it is a big relief to many of us.

[cs_rajesh]

Hello Silverwood, congratulations and thank you. Is there a next step to make state governments bring the option of annual tax for private vehicles or already is there any petition seeking the same?

[rajivr1612]

Wonderful achievement by SILVERWOOD. Hat's off to you sir. Hope the day will come when there will be a uniform tax policy and also completely online RTO procedures.

[sdp1975]

Congratulations Waseem. A very well deserved victory for you and the DWB team. I went through the judgement and it has very heavily come down on the State govt. on the legislation, with good reasons as well. There's very little chance of appeal for the State govt, IMHO.

How do the affected car owners get their money back ? I did not see anything in the judgement directing the govt to the return the money . Do they need to individually file petitions asking the court to direct the transport dept to return the money , or do you plan to file a common petition for this ?

[iVtec]

Congratulations and salutations Waseem for this stupendous achievement. Now, will this judgement work as a precedent in deterring other states from fleecing the outside state car owners? For example, can someone moving to Hyderabad quote this judgement and avoid harassment from the local authorities?

[binand]

Originally Posted by iVtec

will this judgement work as a precedent in deterring other states from fleecing the outside state car owners?

No. This judgment only held that a KA government legislation to amend a KA specific law is unconstitutional and ultra vires. It has no bearing outside the state of KA. In fact, the judge specifically mentions he's not going to examine the other, more generic reasons with pan-Indian relevance the petitioners had raised.

[Santoshbhat]

Originally Posted by w 12

Congratulations on winning the case.

It is common knowledge that dealerships of high end cars like Audi, BMW help in getting cars registered on fake pondicherry address, to save road tax in BLR for a nominal fee.

This order of the court changes everything.

Hoping that Maruti, Toyota and other dealerships start similar practice so that this benefit , now restricted to high end cars , trickles down to other cars as well.

What led to the Govt. making a law amendment and taking up the drive against outside state cars was this very act of high end car owners and dealers using fake addresses and registering cars in Pondicherry and evading KA tax. This act of wilfully registering your car on a fake Pondicherry address as a resident of Karnataka is an act akin to tax evasion in my eyes and not a 'benefit' like you seem to think.

I am totally in favour of quashing this 30 day rule that terrorised outside state vehicles, but as residents of Karnataka we need to be responsible enough and pay the tax that we are supposed to pay and not take undue advantage of the fact that the Govt. will not take up such a drive against non KA regd vehicles post the court verdict.

[binand]

Originally Posted by Santoshbhat

What led to the Govt. making a law amendment and taking up the drive against outside state cars was this very act of high end car owners and dealers using fake addresses and registering cars in Pondicherry and evading KA tax.

This argument was often mentioned by the apologists for the KA govt act. But in my view it is specious, because Pondicherry is also eligible to register vehicles, and many of the vehicles sporting PY numbers are quite legitimately registered in Pondicherry. If there are some unscrupulous elements generating fake addresses etc. in PY and registering ineligible vehicles there, then the right course of action for KA govt is to write to their counterparts in PY, and if that does not bring in the desired outcome invoke the provisions of article 131 of the constitution to sue the PY government. Not treat every non-KA vehicle owner with utter contempt.

[Santoshbhat]

Originally Posted by binand

This argument was often mentioned by the apologists for the KA govt act. But in my view it is specious, because Pondicherry is also eligible to register vehicles, and many of the vehicles sporting PY numbers are quite legitimately registered in Pondicherry. If there are some unscrupulous elements generating fake addresses etc. in PY and registering ineligible vehicles there, then the right course of action for KA govt is to write to their counterparts in PY, and if that does not bring in the desired outcome invoke the provisions of article 131 of the constitution to sue the PY government. Not treat every non-KA vehicle owner with utter contempt.

I am not a supporter of the KA Govt's decision of harassing outside state vehicles as it also affected a lot of genuine cases, but what I am saying is that taking advantage of a loophole to evade tax wilfully is also wrong.

If we as a community want the Govt. to be fair we also have to be fair. What Silverwood's effort has done is that it has ensured prevention of harassment of genuine outside state car owners that are in KA for a limited period of time. Asking them to pay LTT in KA is unfair. On similar lines, a full time resident of KA buying a new car and registering it in PY on a fake address or a temp address and residing and driving the car in KA for years together is unfair. The wilful act of tax evasion is what I am against as it was suggested by the other poster that all car dealers must help buyers register cars in PY.

[swiftnfurious]

Waseem, Congrats on the win! When a whole lot decided to sit back and just cringe, you took this up and run it all the way for others. Kudos man!

Quite happy to see the verdict. And I seriously hope the Court also issues a statement to refund all the collected money back to the owners, soon.

I was reading the above posts and understand this rule was primarily for the high end cars registered out of the state, but how many such cars were caught and fined? I think this gained traction because it was not the high end cars which were targeted, but the normal ones.

[w 12]

Originally Posted by Santoshbhat

The wilful act of tax evasion is what I am against as it was suggested by the other poster that all car dealers must help buyers register cars in PY.

I think you missed the sarcasm in my post.I am no way defending such "benefit " But how do you differentiate between some one who is genuinely from PY and got his car registered there and some one who gamed the system to save on road tax?

when the 12 month rule was there, how many out of state cars voluntarily paid tax after 12 months in blr ? ( e.g. I see one Audi q 7 & one BMW 5 series in my street with PY registration everyday. and if these 2 families are natives of Pondicherry, here in Blr on a visit, then I am the Pope )

If the RTO cant stop you and ask to pay roadtax for out of state vehicles , as per this judgement, in all probabilities you will see a rise in PY vehicles in Blr ( certainly not because people of Pondicherry decided to migrate in bulk to blr )

[binand]

Originally Posted by Santoshbhat

what I am saying is that taking advantage of a loophole to evade tax wilfully is also wrong.

You are mixing up multiple things.

There are two ways a resident of Bangalore can get a vehicle registered at Pondicherry.

1. Rent a house in Pondicherry. Establish residence and get a (BSNL) phone line. Use that as address proof to register a vehicle in PY paying the prevalent tax rate. Once done terminate your lease, surrender your phone line, return to Bangalore. It takes about 3 months (at a guess) and maybe a couple of lakhs in expenses.

2. Find a tout. For a fee, he will generate a fake address proof (that is, original stationery of the issuing authority but with nonexistent addresses and forged signatures/stamps) for you. Use that to register a vehicle in PY. Maybe takes a week to do, and perhaps 25K in expenses.

The first method takes advantage of a loophole in the law, but is completely legal. The second is perpetrating a fraud to evade tax and is a wrong thing, a crime.

Originally Posted by Santoshbhat

If we as a community want the Govt. to be fair we also have to be fair.

The reason we have a constitution, elections, legislature/executive/judiciary, a large collection of laws etc. is that we KNOW that we individually cannot be fair. In fact, if all humans are fair to each other at all times then there is no need for any of these institutions. On the other hand, we voluntarily allow these institutions to control our lives because we expect fairness from them. The government has no option but to be unconditionally fair to the people.

Originally Posted by Santoshbhat

On similar lines, a full time resident of KA buying a new car and registering it in PY on a fake address or a temp address and residing and driving the car in KA for years together is unfair.

If it is cheaper to register a vehicle in PY, then why is it not fair? As long as the owner follows the letter of the law (method 1 above) he is just minimizing his cost of owning a vehicle. Such price hunting happens in many walks of life and there is no reason to call it unfair. If the KA government feels its revenue stream is hurting then it can do one of many things: (a) compete on price; reduce its own tax rates, (b) negotiate with PY to raise taxes; compensate them for perceived revenue loss for them, (c) get union government to implement one India one tax, or (d) several other things I can think of.

[littlebrother]

I don't have to feel like I'm stealing my own car and driving through Bangalore anymore ! or don't have to plan my outstation journeys from Bangalore to be either early mornings or late nights!Or avoid taking my vehicle to Old madras road or koramangala or electronic city area where RTOs are spotted more often!Or even purposely driving my vehicle up and down to kerala ever 1 month or so to make toll slips available(I doubt it would be of good consider hearing the experiences from others who had suffered this ordeal) just in case I get caught!

Hats off to the team who made this happen fighting relentlessly against Karnataka Govts attempt to raise revenue through such an amendment

Drive Without Borders and One India One Tax

[SILVERWOOD]

Originally Posted by swiftnfurious

I was reading the above posts and understand this rule was primarily for the high end cars registered out of the state, but how many such cars were caught and fined? I think this gained traction because it was not the high end cars which were targeted, but the normal ones.

This atrocious amendment was passed to make easy bucks from hapless citizens who do not have a voice in that state.The modus oparendi was simple

1, Catch them unaware.
2, Talk to them sternly.
3, Make them feel as if they have crossed the border of India without a Valid visa.
4, Make them feel as they they committed some non bailable crime
5, Coerce them to sign Vehicle check reports which stated that they have been plying the vehicle for more than 30 days.
6, If they protest, tell them that their vehicle will be seized and they will have to approach the court to get it released.These innocent citizens were also informed that it takes years for them to get their vehicles released from the courts.
7, Also inform them that this is just a Vehicle Check Report and the owner can visit the jurisdictional RTO office and meet the RTO/ARTO and show them the proof of entry and get their documents (DL/RC/Company ID Card/Pan card/Passport) or their vehicles back.
8,The hapless car owner then visits the jurisdictional RTO only to be told that he/she has signed the Vehicle Check Report which stated that he/she has entered Karnataka before 30 days and he/she has to pay tax or else RTO officials will book a case of tax evasion which sometimes may attract jail as well.

I have got frantic calls at 2am in the night that RTO squads were checking Non Karnataka Registered vehicles for tax evasion and they had seized cars/documents at those unearthly hours

Touts were unleashed in broad daylight to stop vehicles and 'negotiate' with the car owners if they want to be freed.Checking points ensured that the catchment area has ATMS or the tout will take the car owner on his bike to the nearest ATM.

The Karnataka RTO took State Sponsored Tax Terrorism to a different level altogether.I will share videos of touts stopping vehicles very soon.

Waseem.

[MDED]

Originally Posted by SILVERWOOD

Dear Friends,

I was interviewed today by CNN-IBN.PFB the video of the same.

Dear Waseem Bhai,
Take a bow! Boy, you have made the life of thousands and lakhs of non KA vehicles into pretty easier one. The couple had to pawn the jewellery to pay the draconian LRT of Karnataka state. Such a shame. You will be a role model for all the blokes employed in IT and ITES who arrive in the city of garden every day in large numbers. The audacity of the state government by not getting the amended law approved by the His Excellency The President of India will not auger well in higher courts, if the state government decides to appeal in SC.
As rightly said by the reporter who interviewed you, this movement has to become ONE COUNTRY ONE ROAD TAX!
Oodles of respect for your grit and determination.