Rajasthan High Court: In a batch of writ petitions, challenging the amendment made by Transport Department by Notification dated 24-02-2021, whereby the Rajasthan Motor Vehicles Taxation Act, 1951 was amended by it introducing a new category of ‘Sleeper Bus’ at Serial No. 7(a)(iii), thereby imposing a separate levy based on body type of vehicle, a Division Bench of Vinit Kumar Mathur* and Justice Anuroop Singhi, JJ., upheld the amendment. The Court said that the amendment cannot be said to be anything beyond specifying the rate of motor vehicle tax payable on passenger vehicles, which was very much within the domain and authority of the State Government in exercise of powers conferred by Clause (a) and (c) of Sub-Section (1) of Section 4 read with Section 3 of the Rajasthan Motor Vehicles Taxation Act, 1951. It, further, observed that the rates of tax were amended keeping-in-mind the intelligible differentia of the class of vehicles and the area of their operation. Further, Government was fully competent to extend the benefit of exemptions to a particular category and deny the same to other, keeping-in-mind the larger public interest, the nexus and the object sought to be achieved.
Background
The petitioner was a registered owner of motor vehicles, including a bus which was registered as a Bus with a ‘Sleeper’ body type. Under the Notification dated 10-07-2019 issued under the Rajasthan Motor Vehicles Taxation Act, 1951, motor vehicle tax was prescribed based on the class of vehicle and seating capacity. The petitioner’s vehicle was taxed under Serial No. 7(a)(ii) of this Notification.
Subsequently, the State Government issued an Amendment-cum-Exemption Notification dated 24-02-2021, which substituted Serial No. 7(a) of the 2019 Notification and introduced a new category at Serial No. 7(a)(iii), namely ‘Sleeper Bus’. This amendment imposed a separate levy based on the body type of the vehicle and did not extend the exemptions available to vehicles under Serial Nos. 7(a)(i) and 7(a)(ii). Another Amendment Notification dated 23-02-2022 further enhanced the exemption for categories under Serial Nos. 7(a)(i) and 7(a)(ii) from 50% to 70% but still excluded the ‘Sleeper Bus’ category. Although the petitioner continued to pay tax under Serial No. 7(a)(ii), the District Transport Officer (Taxation Officer) issued notices dated 24-03-2023 and 21-06-2023, raising an impugned tax demand for the period from 01-04-2022 to 30-06-2023.
The present writ petition raises a challenge to the amendment made by Transport Department, Government of Rajasthan by Notification dated 24-02-2021 whereby it introduced ‘Sleeper Bus’ as a separate taxable class on the basis of body type for being arbitrary, illegal and without jurisdiction.
Issues
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Whether the State Government was competent to create a new taxable category based on “body type” of vehicle under the Rajasthan Motor Vehicles Taxation Act, 1951; and
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Whether the classification of “Sleeper Bus” as a separate category for levy of tax, without extending exemptions, is arbitrary or violative of constitutional provisions.
Court’s Analysis and Decision
The Court perused Sections 2(7) & 2(29) and 41 of the Motor Vehicles Act, 1988; Rule 7.14A of the Rajasthan Motor Vehicles Rules, 1990; Section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951 and Rule 8 of Rajasthan Motor Vehicles Taxation Rules, 1951.
The Court observed that the vehicle involved in the present case was a ‘Bus’ which falls in the definition of Sections 2(7) and 2(29) of Rajasthan Motor Vehicles Act, 1988. Since the Registering Authority is required to register a vehicle as per Section 41 of the Motor Vehicles Act, 1988 therefore, the vehicle registered in the present case has been kept under the class of vehicle as ‘Bus’. The Court observed that there was no doubt that the ‘Bus’ falls in the definition of Section 2(7) and 2(29) of the Motor Vehicles Act, 1988 and in Column-1 (Transport Vehicles) type-xii/xxi mentioned in the notification dated 05-11-2004 issued by the Central Government under Section 41(4) of the Motor Vehicles Act, 1988 providing specification of type of motor vehicles.
Once the type or class of vehicle is further categorized into the different categories based on seating capacity/berth arrangement as per the body types defined under the Rajasthan Motor Vehicle Rules, 1990, the State Government is well within its right to categorize such vehicles for the sake of imposition of tax it deriving power from Entry 57 of List II State List and Entry 35 of List III-Concurrent List of the Seventh Schedule of the Constitution.
The Court observed that the insertion of S. No. 7(a)(iii) cannot be said to be anything beyond specifying the rate of motor vehicle tax payable on passenger vehicles, which was very much within the domain and authority of the State Government and was not violative of provisions of the Motor Vehicles Act, 1988. Further, the concept of capacity of/facility provided in a bus, it being ‘seating’ or ‘sleeper’, very much existed in the parent notification and insertion of category at S. No. 7(a)(iii) cannot be termed as creation of a new class of the type of vehicle.
Therefore, on Issue 1 the Court held that the State Government was very much within its competence in creating a new taxable category based on body-type of the vehicle in exercise of powers conferred by clause (a) and clause (c) of Section 4 read with Section 3 of the Rajasthan Motor Vehicles Taxation Act, 1951.
The Court noted that the State Government vide notification dated 10-07-2019 has specified the rate of Motor Vehicle Tax payable on the passenger as per the description of class of motor vehicles and rates of tax therein. The State Government has keeping-in-mind the body-types as per Rajasthan Motor Vehicles Rules, 1990 has categorized ‘Sleeper Coach’ as one of the types/class of vehicles in conformity with the Motor Vehicles Act, 1988 and the notification dated 05-11-2004 issued under Section 41(4) by the Central Government. Since, the Sleeper Bus is a category of class/type of vehicle mentioned in the Motor Vehicles Act, 1988, therefore, levy of tax and grant of exemptions on the different categories of vehicles of a particular class/type is perfectly valid and well within the domain of the State Government.
The Court observed that the rates of tax have been amended keeping-in-mind the intelligible differentia of the class of vehicles and the area of their operation. Also, the rates of tax imposed in the categories mentioned in the notification dated 24-02-2021 were well within the boundaries as mentioned in Section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951 and therefore, the State Government did not exceed in their jurisdiction while imposing the tax on certain categories of the vehicle.
Further, for the grant of exemption, the State Government was fully competent to extend the benefit of exemptions to a particular category and deny the same to other, in the larger public interest, the nexus and the object sought to be achieved. In order to promote the plying of buses with seating capacity in the Revenue Divisional Limits, the exemptions were granted and the same was not extended to the sleeper buses mentioned in the category at S.No.7(a)(iii) so as to avoid competition with those persons who were running their buses in the revenue divisional limits.
The Court held that the State was well within its domain to create a separate category titled ‘Sleeper Bus’ falling in the same class/type mentioned in the Central notification for the purpose of levying tax without extending any exemption of tax.
The tax imposed was absolutely within the ambit of Section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951 and the imposition of tax was as per the registration of the vehicle in the particular class/type as mentioned in the notification issued by the Government of India under Section 41 of the Motor Vehicles Act, 1988.
On the challenge to the notice issued in Form MTR dated 24-03-2023 and demand notice issued in Form MTQ dated 21-06-2023, the Court observed that the notices failed to specify the basis for issuance of the same and failed to adhere to the procedure as envisaged in Rule 8 of the Rajasthan Motor Vehicles Taxation Rules, 1951 as no certified copy of the order computing the demand was annexed along with Form MTQ. The Court set aside these notices.
In light of the afore-stated facts and circumstances, the Court partly allowed the writ petitions. The Court while setting aside the challenge made to the amendment vide Notification dated 24-02-2021, whereby, a new category at Sr. No.7(a)(iii) was inserted in the existing Notification dated 10-07-2019 quashed and set aside the notices issued in the form of M.T.R. dated 24-03-2023 and demand notice issued in Form M.T.Q. dated 21-06-2023. However, the respondents were at liberty to initiate proceedings strictly in accordance with law.
[Khuman Singh v. State of Rajasthan, D.B. Civil Writ Petition No. 11535/2023, decided on 22-08-2025]
*Judgment authored by: Justice Vinit Kumar Mathur
Advocates who appeared in this case:
For the Petitioners: Saurabh Maheshwari, Deven Maheshwari, Manvendra Singh Rathore with Ashok Godara, Saumya Choudhary, Manish Bhunwal for Sajjan Singh Rajpurohit, Advocates
For the Respondents: Sajjan Singh Rathore, AAG with Yuvraj Singh Rathore, B.L. Bhati, AAG with Deepak Chandak, Advocates
Ed.: While the Court has upheld the State’s amendment creating the ‘sleeper bus’ as a distinct taxable category under the Motor Vehicles Act, from Paragraph 40 it appears that the Court has upheld the petitioner’s challenge to the State amendment:
“40. Consequently, the writ petition stands partly allowed in the manner that the challenge made to the amendment vide Notification dated 24.02.2021, whereby, a new category at Sr. No.7(a)(iii) has been inserted in the existing Notification dated 10.07.2019 is upheld, ….”
In our opinion, it should read as-
“Consequently, the writ petition stands partly allowed in the manner that the challenge made to the amendment vide Notification dated 24.02.2021, whereby, a new category at Sr. No.7(a)(iii) has been inserted in the existing Notification dated 10.07.2019 is dismissed…”
