Entry tax on Union vehicles upheld where defence-only exemption was not proved and Article 285 was not attracted.

A challenge to the Andhra Pradesh entry tax on Union-owned vehicles failed because the proviso to section 3(1) was confined to Central Government vehicles used exclusively for defence purposes, and that factual requirement was not established for vehicles purchased for the Nuclear Fuel Complex. The levy was treated as tax on the entry of the vehicle into a local area, not a tax directly on Union property, so Article 285(1) was not attracted. The Court also held that the entry tax law and the Motor Vehicles Act operated in different fields, and the absence of Presidential assent did not make the State Act unconstitutional on the grounds urged.

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Issues: Whether the proviso to section 3(1) of the Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 was invalid for denying exemption to Central Government vehicles not used exclusively for defence purposes, whether levy of entry tax on Union-owned vehicles offended Article 285(1) of the Constitution, and whether the Act was repugnant to section 207 of the Motor Vehicles Act, 1988 or otherwise unconstitutional for want of Presidential assent.

Analysis: The exemption in the proviso to section 3(1) was confined to motor vehicles owned by the Central Government and used exclusively for purposes relating to the Defence of India. Vehicles purchased for the Nuclear Fuel Complex of the Department of Atomic Energy were not shown to be used exclusively for defence, and the exemption therefore could not be invoked. The levy under section 3 was held to be on the entry of the vehicle into the local area, not on the property of the Union itself, so Article 285(1) was not attracted. The Court further held that the entry tax law and the Motor Vehicles Act operated in different fields: section 20 of the State Act dealt with breach of that Act, while section 207 of the Motor Vehicles Act dealt with offences under the motor vehicles law. The reference to section 60 of the Motor Vehicles Act, 1988 also indicated that Central Government vehicles are not automatically exempt from registration or related statutory requirements absent a notification.

Conclusion: The challenge to the levy failed, and the writ petition was not maintainable on any of the asserted grounds.

Ratio Decidendi: A tax on the entry of a motor vehicle into a local area is a tax on the taxing event of entry and not a tax directly on Union property; an exemption limited to vehicles used exclusively for defence must be strictly established on the facts.

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