Vehicle cost basis for life tax excludes GST and compensation cess unless the statute clearly expands the taxable base.

Life tax under the Andhra Pradesh Motor Vehicles Taxation Act, 1963 is computed on the "cost of the vehicle" and not on the invoice value including GST and compensation cess, unless the statute or a valid notification clearly extends the taxable base. The commentary notes that the expression refers to the amount actually paid as consideration for the vehicle, so statutory taxes cannot be added to the base by implication. It also records that excess tax collected is refundable where the refund claim is made within the applicable limitation period.

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Issues: Whether life tax under the Andhra Pradesh Motor Vehicles Taxation Act, 1963 is leviable on the total invoice price including GST and compensation cess or only on the cost of the vehicle, and whether the excess tax collected was refundable within limitation.

Analysis: The levy under the Sixth Schedule to the Andhra Pradesh Motor Vehicles Taxation Act, 1963 is on the "cost of the vehicle". The Court followed the earlier view that this expression refers to the amount actually paid for the vehicle as consideration, but the demand cannot be expanded by treating statutory taxes such as GST and compensation cess as part of the taxable base unless the statute or a valid notification clearly provides so. The Court also noted that the petitioners had approached the Court within the limitation period applicable to refund claims.

Conclusion: Life tax was to be computed on the vehicle cost alone and not on the invoice amount inclusive of GST and compensation cess. The excess tax collected was directed to be refunded, and the petitioners succeeded.

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