HC quashes circular on re-registration of outside vehicles in J&K

Says lifetime tax levied on registration of vehicle cannot be charged again
HC quashes circular on re-registration of outside vehicles in J&K
High court of Jammu and Kashmir, Srinagar branch. [Mubashir Khan for Greater Kashmir]

In a major relief to the vehicle owners, the High Court Thursday quashed Regional Transport Officer Kashmir's circular dated 27 March 2021 which had made re-registration of vehicles with outside number mandatory in J&K.  The High Court in its order said that a lifetime tax levied at the point of registration under Motor Vehicles Act cannot be again levied on the vehicle so registered.

While quashing the circular, division bench of justice Ali Muhammad Magrey and justice Vinod Chatterji Koul directed the government to comply with Motor Vehicle Act 1988 and Rule 54 of Central Motor Vehicle Rules 1989 undertaken for assignment of new registration mark of the vehicles.

The Circular issued had made it mandatory for owners who have purchased their vehicles bearing outside Registration Mark to apply for a new Registration Mark as per the provisions of Section 47/50 of Motor Vehicle Act and Rule 54 of Central Motor Vehicle Rules within a period of 15 days failing which action as warranted under law was to be initiated against them.

While scraping the Circular, the Court held that in keeping with the scheme of law which provides for assignment of new registration mark, once a vehicle is registered in any State in India, the same shall not be required to be registered elsewhere.  "But when the Motor Vehicle registered in one State, has been kept in another State for a period of exceeding 12 months, the owner shall apply to the Registering Authority within whose jurisdiction the vehicle is for the assignment of new registration mark, this is as provided under Sections 46 and 47 of the Motor Vehicles Act."

The court pointed out that a life time tax that is levied at the point of registration of a vehicle in terms of Section 3 of the Motor Vehicle Act, cannot be levied on a vehicle registered, merely on a presumption that a vehicle registered outside Union Territory of Jammu and Kashmir, has remained in the UT for a period exceeding 12 months.

While allowing two writ petitions challenging the circular the Court quashed the circular to the extent it asked the petitioners to have their vehicles registered for assignment of new registration mark with the RTO Kashmir without their declaration in tune with the mandate of Rule 54 of Central Motor Act.

The Court however left it open for the authorities concerned to screen, scrutinize and verify the genuineness of documents of any vehicle entering J&K from outside with outside registration.

The directions came after the court noted that the registration of motor vehicles is entirely governed by Chapter IV of the Motor Vehicles Act and no motor vehicle can be brought on the road without registration. "A tax shall be levied on all motor vehicles suitable for use on roads by virtue of the exclusive power of taxation conferred on the State Government. Therefore, the moment a vehicle is registered under the Motor Vehicle Act, the liability to pay tax arises. The principle in the given case, for taxation by the State Government, is the requirement of registration under the Central Act," the court said.

The Court held that in terms of Section 46 and 47 of the Motor Vehicle  Act when a motor vehicle registered in one State is kept in another State, for a period exceeding twelve months, the owner of the vehicle shall apply to the registering authority, within whose jurisdiction the vehicle then is, for the assignment of a new registration mark.

A lifetime tax that is levied at the point of registration of a vehicle, the court said, therefore, in terms of Section 3 and Part A5 of the schedule to the Act, cannot be levied on a vehicle registered outside the Jammu and Kashmir which remains in the J&K UT for a period exceeding twelve months.

Petitioners Zahoor Ahmad Bhat and Irshad Hussain Munshi had challenged the circular through senior advocate Faisal Qadri and Advocate Fasil Javid.

"In the scheme of law relating to Motor Vehicles, RTO Kashmir has no authority to issue such circulars, as the only power with reference to application of Section 47 has to apply in accordance with procedure, asking the motor vehicle owners registered in one State and kept in Union Territory of J&K for a period exceeding 12 months to apply for assignment of new registration mark," Advocate Qadri pleaded.

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