J. Venkatesan

Petitioners told to deposit tax at new rate

  • The High Court had upheld the amendment and the enhanced tax
  • The present SLPs are against judgment dated November 15, 2006
  • New Delhi: The Supreme Court on Monday restrained the Tamil Nadu Government from recovering arrears of enhanced Motor Vehicle Tax from educational institutions on buses run by them in the State. The court, however, asked them to deposit the tax at the new rate from last December.

    A Bench of Justice S.B. Sinha and Justice Markandey Katju in a brief order said: "There shall be ad-interim stay of the impugned judgment so far as payment of arrears is concerned. However, the petitioners shall deposit the tax at the new rate from December 2006."

    The Bench issued notice to the State Government on a batch of special leave petitions filed by the Tamil Nadu Nursery, Primary, Matriculation and Higher Secondary School Managements Association, challenging the Madras High Court judgment dismissing the petitions questioning the enhanced tax.

    Petitioners' contention

    The petitioners had challenged in the High Court the validity of an amendment introduced to the Tamil Nadu Motor Vehicles Act in 2003 by which the tax payable by educational institutions for the buses run by them was enhanced from Rs. 2,000 a year to Rs. 36,000 a year calculated at the rate of Rs. 150 per head for 60 seats per quarter.

    The High Court upheld the amendment and the enhanced tax.

    The present special leave petitions (SLPs) are directed against the common judgment dated November 15, 2006.

    The petitioners contended that the exorbitant increase in tax would defeat the constitutional objective of free and compulsory education and the principle of compensatory tax for motor vehicles. "The educational institutions are working only for 220 days per year. The said vehicles are also operating only for a few hours in the morning and evening on the working days. They are also operating within the locality of the school."

    They contended that equating the vehicle tax for educational institutions on a par with company vehicles plying for profit-making industrial and commercial establishments was a violation of the fundamental rights of children to have free education. They prayed for quashing the High Court judgment and an interim stay of its operation till the disposal of the SLPs.