SC asks KA to refund LTT collected after passing 30-day rule

Thanks to BHPian SILVERWOOD for undertaking this endeavour.

The Supreme Court has rejected the plea of stay filed by the Government of Karnataka and ordered it to refund the lifetime tax collected from car owners after an amendment was passed by the state legislature in February 2014. The state had added to Section 3 of the Karnataka Motor Vehicles Taxation (Amendment) Act of 2014 that the owners of out of state cars must pay lifetime tax if the cars remained in the state for a period of 30 days or more.

In March 2016, the High Court had declared the amendment as unconstitutional. The petitioners had challenged that the state had no powers to change the 12-month period allowed to register a vehicle in another state. The Government of Karnataka filed a Special Leave Petition (SLP) in the Supreme Court on February 10, 2017, seeking relief against the Judgement delivered by the Division Bench of Karnataka High Court. The Supreme Court rejected it four days later.

The Government of Karnataka had filed an application at the Supreme Court on March 31, 2017 asking for stay on the judgement delivered by the Division Bench of Karnataka High court. They had mentioned that 190 people have filed for refund of the tax and the same amounts to Rs. 36 crores.

The Government of Karnataka had filed the interim application for stay with the Supreme Court. On September 4, 2017, the Supreme Court rejected the plea of stay filed by the Government of Karnataka and had asked the state to refund the lifetime tax collected. People who wish to seek the refund will have to furnish an undertaking that they will refund the amount if the SLP is decided in favour of the Government of Karnataka.