The Telegraph
Since 1st March, 1999
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Death to lifetime car tax

Calcutta, March 26: Owners of cars and two-wheelers in Bengal need not pay the five-year or the lifetime tax, Calcutta High Court has ruled, adding that those who have already paid will get their money back with interest.

The court ordered scrapping of the taxes imposed by finance minister Asim Dasgupta to raise substantial funds quickly.

“Your notifications introducing the two taxes violate the norms of the Constitution,” Justice Bhaskar Bhattacharya said. “The taxes are ultra vires of the Motor Vehicles Act, 1948,” he added, disposing of two petitions filed separately by the Automobile Association of Eastern India and two-wheeler owners.

The judge directed the government to refund the money already collected as taxes and penalties (for not paying the tax on time) within two months with interest calculated at the rate followed by the State Bank of India.

Today’s ruling came after a four-month battle in courts, conflicting orders, out-of-court joustings and general confusion.

When the three-and-a-half-page judgment was read out, no government counsel was present in the packed courtroom. But sources indicated late in the evening that the government was considering moving a division bench against the ruling.

Buddhadeb Bhattacharjee’s government has been on a collision course with owners of cars and two-wheelers since November when the notifications were introduced, ordering that the taxes had to be paid by December 31, failing which a heavy penalty would be imposed.

Justice Pratap Kumar Roy of the court, on a plea by two-wheeler owners, had passed an interim order restricting the government from collecting the taxes. But Justice Pronab Kumar Roy of the same court, hearing a plea by other vehicle owners, had ruled in the government’s favour.

Advocate-general Balai Ray then moved the division bench of Calcutta High Court comprising Chief Justice A.K. Mathur and Justice A.K. Banerjee and sought a uniform order. The bench stayed all interim orders and sent the cases to Justice Bhattacharya for final disposal.

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