Tax liability for tourist permit vehicles may track the full authorisation period, with refund available on proved non-use.

Section 3 of the Karnataka Motor Vehicles Taxation Act, 1957 charges tax on a vehicle suitable for use on roads, while Section 4 allows payment on a quarterly, half-yearly or yearly basis. For an all-India tourist permit vehicle authorised to ply in Karnataka for one year, the Court held that the transport authority could require tax for the full authorisation period, since the authorization was expressly subject to payment of State tax or fees and the statutory scheme did not require daily monitoring of actual use. The demand was treated as co-terminus with the authorisation, and refund remained available under Section 7 if non-use was proved.

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Issues: Whether the transport authority could insist on payment of motor vehicle tax for the entire period of authorization, rather than permit quarterly payment, in respect of an all India tourist permit vehicle authorized to ply in Karnataka.

Analysis: Section 3 of the Karnataka Motor Vehicles Taxation Act, 1957 is the charging provision and Section 4 permits payment of tax on the basis of quarterly, half-yearly or yearly choice. The vehicle had an all India tourist permit and an authorization valid for one year, and the authorization under the Central Motor Vehicles Rules was expressly subject to payment of tax or fees levied by the concerned State. The Court held that the State was not required to monitor actual use of the vehicle throughout the year and that tax liability under the Act is linked to the vehicle being suitable for use on roads, not to proof of actual use on every day of the period. The demand for payment for the full authorization period was therefore treated as co-terminus with the authorization and as having a rational nexus to the statutory scheme. The refund remedy under Section 7 remained available if non-use was established.

Conclusion: The demand for annual tax for the authorization period was upheld and the challenge to insistence on yearly payment failed.

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