Brinda K Varma vs. State Of Karnataka

Facts

The petitioner, Brinda K Varma, purchased a Tata Safari SUV in June 2019 for Rs. 4,73,459/- (including GST and Cess) as per the manufacturer's invoice. She paid Rs. 1,39,812/- as Lifetime Motor Vehicle (MV) tax based on this value. Subsequently, when seeking permanent registration, the Assistant Regional Transport Officer (RTO), Koramangala, issued an endorsement demanding an additional Rs. 1,18,539/- in Lifetime MV tax. This demand was based on the ex-showroom price of Rs. 8,99,685/- indicated in the dealer's invoice. The petitioner challenged this demand, arguing that the tax should be calculated on the manufacturer's invoice value.

Held

The Court held that the amendment to Note No. 3(a) of Part A5 to the Schedule of the KMVT Act, which mandates calculating Lifetime MV tax based on the higher value between the manufacturer's and dealer's invoices, is prospective and not retrospective. Since the petitioner purchased the vehicle on June 24, 2019, which was prior to the amendment's effective date of April 1, 2020, the amendment is not applicable to her case. Therefore, the Lifetime MV tax was correctly calculated based on the manufacturer's invoice value of Rs. 4,73,459/-, and the tax of Rs. 1,39,812/- already paid by the petitioner was correct and proper. The respondents were not entitled to demand additional tax. The impugned endorsement demanding additional tax was quashed, and the respondents were directed to grant permanent registration without insisting on further payment. Liberty was reserved for the respondents to take steps for levy of penalty, if any, in accordance with law.

Key Issues

1. Whether the Lifetime Motor Vehicle tax for a vehicle purchased prior to April 1, 2020, should be calculated based on the manufacturer's invoice value or the dealer's invoice value, when there is a difference between the two, under Section 3(1) and Part A5 of the Schedule to the Karnataka Motor Vehicles Taxation Act, 1957 (KMVT Act)? Petitioner's argument: The petitioner contended that the tax should be calculated based on the manufacturer's invoice value of Rs. 4,73,459/-, as the purchase was made before the amendment to the KMVT Act which came into effect on April 1, 2020. They argued that the amendment, which mandates considering the higher value between the manufacturer's and dealer's invoices, is not applicable retrospectively. Respondents' argument: The respondents argued that by virtue of Section 3(1) and the amendment to Part A5 of the Schedule to the KMVT Act, effective April 1, 2020, the petitioner was liable to pay Lifetime MV tax on the higher of the two invoice values (manufacturer's or dealer's). Since the dealer's invoice value of Rs. 8,99,685/- was higher, the additional tax was legally demanded.