Telangana High Court
Sri. Vattikuti. Abbaiah, vs The State Of Telangana on 21 April, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 1361 OF 2023
O R D E R:
Petitioner is stated to have purchased a Black BMW
730LD, 2013 model, bearing registration No. DL 1CQ 4638, for
Rs. 9,75,000/- from Quest Experiential Services Ltd. through
Kunj Motors in Delhi as reflected in the invoice dated
22-08-2022. Original cost of the vehicle, as per the invoice dated
26-11-2013, was Rs. 92,50,000/-. According to him, one-time
tax (OTT) amounting to Rs. 12,48,687/- had already been paid
for the vehicle at the time of its purchase in Delhi, valid for the
lifetime of the vehicle as per the applicable rules. Upon bringing
the vehicle to Hyderabad in September 2022, he is stated to
have approached the 2nd respondent with all mandatory
documents to effect transfer of ownership. Despite his
willingness to pay the requisite charges, the 2nd respondent
demanded Rs. 14,91,150/-. This amount was calculated as
15.5% road tax on the original invoice price of Rs. 92,50,000/-,
along with 4% transfer charges.
It is contended, respondent's demand for road tax
on the original invoice price is arbitrary, illegal, and without
authority, as the vehicle is already 10-year-old and has
significantly depreciated in value. Imposition of life tax on the
old vehicle contradicts the provisions of Section 47(4) of the
Motor Vehicles Act, 1988, which does not empower the
respondents to levy life tax on a previously taxed vehicle.
Furthermore, Rule 96 of the Andhra Pradesh Motor Vehicles
Rules, 1989, also does not authorize such tax imposition.
2. Learned counsel for petitioner Sri L.V. Ramana Rao
submits that this Court, in Writ Petition No. 6978 of 2015 vide
order dated 18-03-2015, declared such demands as illegal.
Therefore, a direction is sought to the 2nd respondent to transfer
the ownership of vehicle to petitioner without demanding life tax
or any additional tax.
3. The case of the 2nd respondent, as submitted by
learned Government Pleader for Transport, is that sale
consideration for the nine-year-old vehicle, originally registered
on 26-11-2013, cannot override the invoice price, which forms
the basis for life tax calculation. This follows column No. 6 of
the Sixth Schedule of G.O.Ms. No. 22, dated 07-05-2022, which
mandates tax levied on the cost of the vehicle as per the invoice,
adjusted for the vehicle's age. It is submitted that motor vehicle
taxes are State taxes governed independently under the
respective State Legislations. Taxes paid in Delhi, even if termed
as one-time tax (OTT), do not exempt liability for taxes under
Telangana's jurisdiction. Under Section 3 of the TSMVT Act,
1963, tax is levied on every motor vehicle used or kept for use in
the State. Hence, petitioner may seek refund from Delhi
authorities for the unutilized OTT period, but the liability to pay
life tax in Telangana remains. The respondent clarifies that the
stipulated tax must be paid upon issuance of NOC and entry of
the vehicle into Telangana.
Learned Government Pleader clarified that all non-
transport category vehicles, including motor cars and jeeps,
entering Telangana by address change or ownership transfer,
are subject to life tax as per Schedule VI of G.O.Ms.No. 22. The
invoice price of Rs.92.50 lacs and vehicle's age exceeding eight
years was considered, along with a penalty of 1% per month on
the tax as per Rule 13 of the 1963 Rules. Petitioner's contention
that 4% transfer charges were imposed is refuted. It is
submitted that this was a penalty of 1% per month on the
payable life tax from the date of 'NOC' issuance. The penalty is
mandated under Rule 13, item No. 4 of the TSMVT Rules, 1964.
Learned Government Pleader submits that the order
in Writ Petition No. 6978 of 2015 is not applicable as the said
order pertains to absence of explicit legal provisions in the
impugned order of that case, which is not analogous to the
present situation. Similarly, references to judgments in W.P. No.
17038 of 2014 and W.A. No. 805 of 2018 are addressed, with
the respondent explaining the distinction between disputes over
vehicle seizure for alleged continuous operation in Telangana
and the current case involving ownership transfer and tax
liability.
According to learned Government Pleader,
Transport Commissioner's Circular Memo dated 03-12-2019,
mandates tax collection based on invoice price. This is
supported by this Court in Writ Appeal No. 805 of 2018 vide
judgment dated 02-05-2018. Further reliance is placed on the
judgment in State of Karnataka v. K.G. Shenoy, where the
Hon'ble Supreme Court upheld a similar levy of tax under
analogous state laws. He submits that petitioner's argument
that the Motor Vehicles Act, 1988, particularly Section 47,
prohibits re-imposition of life tax is not correct, for, the Motor
Vehicles Act governs vehicle registration, while the TSMVT Act
governs tax levies, operating independently. As per the Sixth
Schedule to G.O.Ms. No. 22, life tax is collectible from all the
vehicles used or kept for use in Telangana and petitioner's
vehicle, having entered the State and sought ownership
transfer, is subject to these tax provisions. In view of the same,
there is no irregularity in imposition of life tax and penalty as
per Section 3 of the TSMVT Act, 1963, the Sixth Schedule of
G.O.Ms. No. 22, and Rule 13 of the TSMVT Rules, 1963. The
petitioner's vehicle cannot be permitted to operate in Telangana
until the due taxes and penalties are paid.
4. The primary issue in this case revolves around the
question as to whether the demand for life tax imposed by the
2nd respondent under the Telangana State Motor Vehicle
Taxation Act, 1963 is valid and lawful when tax was paid on
the subject vehicle in another state (Delhi). While petitioner
contends that such levy of additional tax is unjustified,
respondents argue that the same is in accordance with State
laws and applicable G.O.Ms. No. 22 dated 07-05-2022.
5. Section 3 of the 1963 Act, unequivocally, empowers
the State Government to levy taxes on motor vehicles used or
kept for use within the State. Petitioner's liability arises from the
act of transferring the vehicle to Telangana and seeking its
registration in the State. G.O.Ms. No. 22, dated
07-05-2022, explicitly mandates tax calculations based on the
vehicle's invoice price, with reductions for age. The Sixth
Schedule stipulates that three or four wheeler motor vehicles
including motor cars, jeeps coming under non-transport
category, omnibuses up to a seating capacity of ten persons in
all and new motor cabs and the motor cabs of other states, that
are entering into the rolls of the State by way of change of
address or transfer of ownership, the tax is levied at the rates
prescribed therein on the cost of the vehicle. In accordance
therewith, since petitioner's vehicle was purchased more than
nine years back but not more than ten years by the time it was
brought to Hyderabad in September 2022, and its cost exceeds
Rs.20 lacs, tax should be levied at 18% on the cost of the
vehicle. The cases cited by petitioner, such as Writ Petition No.
6978 of 2015 involved scenarios where vehicles were
temporarily present in a state. In contrast, the present case
involves a permanent transfer of vehicle's registration, triggering
application of Telangana's taxation rules.
6. In K.G. Shenoy's case (supra), it was held by the
Hon'ble Supreme Court while dealing with Section 3(1) of the
Karnataka State Act that it confers right upon the State to levy
tax on all motor vehicles which are suitably designed for use on
roads at prescribed rates without reference to the road worthy
condition of the vehicle or otherwise. It was further clearly
pointed out in the said judgment that the charging section of
the Taxation Act has to be construed on its own terms and not
with reference to the provisions contained in the Motor vehicles
Act. Further, in Writ Petition No. 17038 of 2014, by order dated
10.07.2014, this Court held that motor vehicles which are
registered in some other State but entering into the State for
purposes of entering of rolls of that State by way of change of
address or transfer of ownership alone are required to suffer the
tax specified in Sixth schedule. In view of the same, since
petitioner seeks transfer of vehicle in his name, the vehicle
should suffer tax as specified in the Sixth Schedule. This Court
therefore, cannot grant the relief sought by petitioner in this
Writ Petition.
7. The Writ Petition is accordingly, dismissed. No
costs.
8. Consequently, the miscellaneous Applications, if
any shall stand closed.
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NAGESH BHEEMAPAKA, J
21st April 2025
ksld
