Short-term visitors to the city with out-of-State registered vehicles can now claim a refund of road tax if they had been forced to pay it within 12 months of their arrival in Karnataka. The Supreme Court on Monday refused to stay an order of the High Court of Karnataka quashing an amendment to the State’s road tax rules that had changed the time for plying without paying tax from 12 months to 30 days.
In its order, the apex court has however said that the State could collect the tax back based on the final decision of the court in Karnataka’s appeal. Those claiming refunds would have to give an undertaking that they will return the money to the government if the final decision was in Karnataka’s favour.
“This has been a long fight against an unfair amendment. We will ensure that each and every person gets their refund and will also argue our stance in front of the Supreme Court. It is great news,” said Waseem Memon, of the group Drive Without Borders, who has been leading the fight against the amendment since 2014.
Monday’s directive to the State government comes as Karnataka had appealed to the Supreme Court seeking its nod to refuse refunds to around 200 applicants who had applied to get their money back. It is estimated that the government collected over ₹35 crore in tax from out-of-State vehicle owners since the amendment.
During the height of the crackdown on out-of-State vehicles, hundreds of vehicle owners had complained of high-handedness by the Transport Department and in several instances, the department had not considered documents like toll receipts or even pollution under control certificates while seizing vehicles for plying for more than 30 days without paying tax. While the crackdown has slowed considerably in the past year, vehicle owners say that they are still stopped regularly and asked if they have paid road tax.
Vehicle owners’ support
The issue started with the State government amending the Karnataka Motor Vehicles Taxation Act, 1957, in 2014 and changing the upper limit for driving an out-of-State registered vehicle in Karnataka without paying road tax from 12 months to 30 days. The Transport Department then began stopping such vehicles and asking for proof that they had entered the State only in the past 30 days. This resulted in a windfall from the city’s IT corridors as it sees a lot of workers from other States.
While the aim of the amendment was to catch high-end vehicles which were registered in Union Territories and other States with lower tax brackets, thousands of middle-class vehicle owners were also caught in the net. The State’s road tax rates are among the highest in the country and with refunds from any State an impossible task, it effectively meant that vehicle owners were forced to cough up road tax two times for the same vehicle.
A signature campaign against the amendment, the precursor to approaching the courts, gathered more than 75,000 signatures.