Singan Projects LTD vs. The State Of Telangana

Facts

The petitioner, Singan Projects Ltd., purchased a Mercedes-Benz GLE 300 D 4MATIC LWB BSVI on February 28, 2023, with an invoice generated on the same date. Life tax was paid on March 1, 2023, and a temporary registration was obtained. The petitioner participated in an auction for a special registration number and succeeded on May 30, 2023. Upon approaching the registering authority for final registration, the petitioner was informed that an additional life tax of Rs. 3,79,000/- was due, based on an amendment to the Telangana Motor Vehicles Taxation Act, 2023 (Act No. 6 of 2023), which came into force on April 27, 2023. The petitioner contended that the amendment, having come into force after the vehicle purchase and tax payment, should not apply retrospectively.

Held

The Court held that the amendment to the Telangana Motor Vehicles Taxation Act, 1963, through Act No. 6 of 2023, which inserted clause (aa) in Section 2 defining 'Cost of the Vehicle', came into force on April 27, 2023, as per G.O.Ms.No.12. The petitioner had purchased the vehicle on February 28, 2023, and paid life tax on March 1, 2023, which was prior to the effective date of the amendment. The Court found no dispute regarding the payment of life tax as per the existing rules at the time of temporary registration. Therefore, the respondent authorities could not insist on the petitioner paying excess tax as per the amended Act, which had a prospective effect. The Court allowed the writ petition, directing the respondents not to insist on the additional life tax of Rs. 3,79,000/- and to register the vehicle with the special number by accepting the life tax paid as per the invoice dated February 28, 2023.

Key Issues

1. Whether the amendment to the Telangana Motor Vehicles Taxation Act, 2023 (Act No. 6 of 2023), which came into force on April 27, 2023, is applicable to the petitioner's vehicle, for which the invoice was generated on February 28, 2023, and life tax was paid on March 1, 2023. Petitioner's Contention: The petitioner argued that the amended Act, specifically Section 2(aa) defining 'Cost of the Vehicle', came into force after the vehicle was purchased and life tax was paid. Therefore, the amendment should not be applied retrospectively to demand additional tax. They relied on the principle that taxation cannot be implemented with retrospective effect. Respondents' Contention: The respondents argued that life tax should be paid at the time of registration based on the cost of the vehicle, and the date of purchase should not be considered. They pointed to the amended Act and the definition of 'Cost of the Vehicle' which includes ex-showroom price, and stated that the amendment was issued to enhance life tax on certain categories of vehicles.