Supreme Court allows states to levy Border Tax on Tourist Vehicles, directs petitioners to approach High Courts with grievance
Justices Vikram Nath & Satish C Sharma [09-07-2024]

Read Order: MUTHYALA SUNIL KUMAR & ORS v. UNION OF INDIA & ORS[SC- WRIT PETITION (CIVIL) NO. 864 OF 2022]

LE Correspondent

New Delhi, July 10, 2024: The Supreme Court has disposed of a batch of 117 petitions filed by transporters and tour operators challenging the legality of various state governments levying and collecting Authorization Fee/Border Tax on vehicles with All India Tourist Permits.

The petitioners had sought directions for compliance with the provisions contained in the All India Tourist Vehicles (Permit) Rules, 2023, which aimed to make the movement of tourist vehicles across the country seamless and smooth. The states defended their competence to frame rules and levy taxes under Entries 56 & 57 of List II of Schedule VII of the Constitution. They argued that the petitioners should have approached the respective High Courts under Article 226 of the Constitution instead of the Supreme Court under Article 32. The states also contended that their Acts and Rules levying such taxes had not been challenged by the petitioners.

The Supreme Court, without going into the merits of the matter, disposed of the petitions, giving liberty to the petitioners to approach the jurisdictional High Courts for their reliefs. The top court clarified that it had neither entered into nor examined the merits of the case.

Regarding the tax already recovered, the top court held that it would be subject to the final outcome of the petitions that may be filed before the High Courts. The apex court also directed that for the period during which the interim order passed by the Supreme Court was in force, the petitioners would give undertakings before the High Courts that, in case they fail, they will make good on demands that would have been raised for the period for which the stay was enjoyed.