Is the framing of Rules a precondition to collecting a lifetime tax that a statutory Schedule already quantifies?

Crest fallen by the order dated 01.08.2025, passed in WP.No.36444/2023, dismissing the appellant’s writ petition, the above intra-Court appeal is preferred. Facts leading to filing of the Writ Petition:-

The appellant/writ petitioner is operating Tourists Maxi Cab Services in the name and style of ‘’M/s.Aviation Express’’. The appellant provides tourist maxi cab services to air travellers at Chennai, both international and domestic airports and has been in the trade for over 35 years. The appellant claims to have paid all applicable taxes and charges relating to his vehicles as mandated by law. The appellant states that he is paying the taxes on quarterly basis for his vehicles as per Section 4[1] of the Tamil Nadu Motor Vehicles Taxation Act, 1974, [hereinafter referred to as ‘’the Taxation Act’’]. According to the appellant, the manner and period of payment is prescribed in the Tamil Nadu Motor Vehicles Taxation Rules, 1974. While so, the respondents/Government introduced the Amendment Act 30/2023, amending Section 4[1-A] of the Taxation Act and the corresponding Schedules by substituting certain provisions. The appellant is aggrieved by the introduction of lifetime tax under the Amendment Act 30/2023, for old Tourist Maxi Cab Vehicles, at differential rates as per the year of registration. The appellant further states that when he attempted to pay the quarterly tax through the online portal, the same was not accepted citing the introduction of the new Amendment. The appellant states that, while so, vide letter dated 16.11.2023, the 1st respondent directed the 2nd respondent, to extend the time for payment of the tax for the current quarter, difference of tax, and also to extend the time for exercising the option to pay in installments or lump sum, the lifetime tax in respect of the old Tourist Maxi Cab Vehicles, by getting an Undertaking affidavit from the owners of the vehicles. The 2nd respondent, accordingly extended the time till 31.12.2023. The appellant states that it was expecting the Government to notify the Rules, Circulars, instructions etc., pursuant to the Amendment Act, but instead of notifying them, the officials insisted on immediate payment of lifetime tax. The appellant, also submitted a representation on 30.11.2023, to the 3rd respondent seeking copies of the Rules and Orders, if any ; but the officials expressed ignorance of any Orders, Rules etc., and reiterated that the quarterly tax would not be accepted. The appellant contends that in the absence of Rules prescribing the mode and manner of payment of lifetime tax, consequences such as penalty, permit ineffectiveness etc., would not arise, and that in any event, it is settled law that tax should not be introduced or enforced during an on-going assessment period unless expressly authorised. The other contentions of the appellant raised in its affidavit are not traversed in detail and suffice it to state that the appellant laments that in the absence of the Rules prescribing the mode and the manner for payment or any reasonable mechanism for adjustment of quarterly tax already paid, the respondents should be restrained from insisting upon payment of lifetime tax for the appellant’s Tourist Maxi Cab Vehicles pursuant to the Amendment Act 30/2023, till the Rules are framed and published. Under the circumstances, the appellant filed the writ petition seeking for a mandamus forbearing the respondents from insisting upon payment of lifetime tax for the petitioner’s Maxi Cab Vehicles pursuant to the Tamil Nadu Motor Vehicles Taxation [Amendment Act], 1974 [Act 30 of 2023], pending framing / amendment of Rules in regard to the same and publication of details of implementation and modalities.

The respondents refuted the allegations of the appellant/writ petitioner by filing a counter affidavit. Findings of the learned Single Judge:-

The learned Judge of this Court, on appreciation of the rival contentions and on the basis of the materials placed on record, held that the contention of the appellant that the demand for payment of lifetime tax in the absence of corresponding provisions / Rules / Circulars / Orders or mechanism, was ill-conceived. The learned Judge, on an appreciation and interpretation of the amended provisions and the Principal Act, found that the writ petition deserved no merit and hence, dismissed the same, giving liberty to the writ petitioner to discharge his obligation of paying the lifetime tax on the basis of the Scheme / Circular of the respondents. Aggrieved by the aforesaid order of the learned Judge, the writ petitioner filed the above Writ Appeal. Contentions of the Appellant:-

Mr.G.Rajagopalan, learned Senior counsel appearing for the appellant made two-fold submissions. Firstly, the learned Senior Counsel submitted that the amendment to Section 4[1-A] of the Taxation Act, was not enforceable in view of the failure of the Government to notify the Rules prescribing the mechanism or the mode and manner of assessment and payment of the lifetime tax. The second submission of the learned Senior counsel was that the lifetime tax imposed on old vehicles amounted to double taxation since there was no clarity on the adjustment of the taxes already paid by the appellant under the erstwhile regime. Contentions of the Respondents:-

The learned Government Advocate, on the other hand, submitted that admittedly, the Government is empowered to enhance and revise the tax structure in respect of particular class of vehicles or in respect of classes of vehicles as per the provisions of the Taxation Act, with an intention to fetch additional revenue to the Government, provided the increase in aggregate, does not exceed 50% of the rate specified in the Schedule. The learned Government Advocate, submitted that the appellant has not disputed the authority of the Government to impose the lifetime tax, the only objection raised by the appellant is that in the absence of Rules clarifying the mode and the manner for payment and the mechanism for assessment, the levy of lifetime tax is unsustainable / unenforceable. The learned Government Advocate further submitted that the contention of the appellant that the levy of lifetime tax suffers from the vice of double taxation, is unfounded and baseless since it is only the difference in tax which would be collected by deducting the tax [quarterly / half-yearly / annual] already paid by the appellant. The learned Government Advocate, submitted that in the absence of a challenge to the amended provisions, the relief claimed in the writ petition ought not to be entertained since no mandamus can be issued restraining the respondents from discharging their duties as mandated by law. The learned Government Advocate, therefore submitted that there are no merits in the writ appeal and the same deserves to be dismissed. Findings of the Court:-

We have given our thoughtful consideration to the rival contentions of the learned counsels and perused the materials placed on record.

The core issue that falls for consideration in the writ appeal is whether, in the absence of Rules, consequent to the amendment to Section 4[1-A] of the Tamil Nadu Motor Vehicles Taxation Act, 1974, and the corresponding amendment to the Schedules including the substitution of the Eighth Schedule of the Taxation Act, which provides for manner and collection of lifetime tax, particularly in relation to old Maxi Cab Vehicles, the collection of lifetime tax is sustainable. The other issue relates to double taxation. Introduction:-

Before discussing the issues raised in the writ appeal, it would be useful to refer to the provisions of the Tamil Nadu Motor Vehicles Taxation Act, 1974. Section 3 of the Taxation Act provides for levy of tax for all kinds of motor vehicles which are kept for use or used in the State of Tamil Nadu, as per the rate specified in the Schedules attached to the Sections [Schedules I to X]. Under Section 3[2] of the Taxation Act, the Government may, by Notifications from time to time, increase the rate of tax specified in the Schedules provided such increase does not, in aggregate, exceed 50% of the rate specified in the Schedules. Section 2[3A] of the Act defines ‘’lifetime tax’’ as tax leviable in one lump sum in advance for the lifetime on a motor vehicle. The Government of Tamil Nadu has been levying lifetime tax for different categories of vehicles from different points of time.

From the above provisions of the Act, it is clear that the Government of Tamil Nadu is empowered to levy and revise the tax structure in respect of classes of vehicles covered under the Schedules attached to the Act, provided such levy does not in aggregate, exceed 50% of the rate specified in the Schedules. Background to the Amendment Act 30/2023 relating to Lifetime Tax on Tourists Maxi Cab Vehicles [Old and New]:-

The present amendment is concerned with the levy of lifetime tax in respect of old and new Tourist Maxi Cab Vehicles by Amendment Act 30 of 2023, with effect from 09.11.2023. Nature and Object of the Lifetime Tax:-

It is common knowledge that taxes are levied for the usage of public roads by the vehicles and as such, the levy of tax is compensatory in nature. Lifetime tax is one time payment spread over the economic life of the vehicle. The collection of lifetime tax as a one time payment, has been recognised by the Courts as being administratively convenient and also as being beneficial not only because the users of the vehicles do not have to go to the office of the Regional Transport Office quarterly, half- yearly or annually, to pay the tax, but also because they do not have to pay the increased tax from time to time over the economic life of the vehicle.

The Hon’ble Supreme Court, in the case of State of Tamil Nadu Vs. M.Krishnappan and Another reported in 2005 [2] CTC 290 : 2005 [4] SCC 53, while approving the imposition of lifetime tax on motor vehicles by the Amending Act, 27/1998, held as follows:- ‘’22. In the present case we are satisfied that the levy in question being one-time tax continues to be a part of regulatory measure. For administrative reasons, in the matter of collection of tax, one-time payment of tax is administratively convenient and at the same time, it is also beneficial to the users of the vehicles who do not have to go to the office of the RTO every year to pay the annual taxes. It is also beneficial to the users of the motor vehicles, as they do not have to pay taxes at the increased rates from time to time over the economic life of the vehicle as contemplated by Section 3(2) of the Act…..’’

So also, this Court, in R.Mahalakshmi and Others Vs. The Government of Tamil Nadu rep.by its Secretary, Transport Department, Chennai and Others [2012 [5] LW 581], while testing the validity of Sections 4 and 7 of the Taxation [Amendment] Act, 2012 [Act 13 of 2012], following the aforesaid judgment of the Apex Court in Krishnappan’s case, upheld the validity of the Act.

The appellant, in the light of the aforementioned judgments, probably and consciously chose not to challenge the levy under the amended provisions, but restricted the relief for a writ of mandamus forbearing the respondents from insisting upon the appellant to pay the lifetime tax in respect of the appellant’s vehicles pending framing the Rules. Maintainability of the Prayer in the Writ Petition:-

We have our own reservations on the maintainability of the prayer in the writ petition. The appellant has admittedly not challenged the vires of the amended provisions. In such circumstances, we are of the view that the relief of mandamus sought, is wholly misconceived and consequently not maintainable. So long as the statutory provisions remain unchallenged and hold the field, this Court cannot issue a writ restraining the respondents from discharging the statutory duties cast upon them. Granting such a relief would in effect, amount to interdicting the statutory authorities from enforcing a valid subsisting law, which is plainly impermissible in the exercise of writ jurisdiction. Under the circumstances, we are of the view that the learned Judge, rightly relied on the judgment of the Hon’ble Supreme Court in Narinder Chand Hem Raj and Others Vs. Lt. Governor, Administrator, Union Territory, Himachal Pradesh and Others, reported in 1971 [2] SCC 747, wherein it was held as follows:- ‘’7…..No Court can give a direction to a Government to refrain from enforcing a provision of law. Under these circumstances, we must hold that the relief asked for by the appellant cannot be granted.’’

However, we do not propose to dismiss the writ appeal on the ground of maintainability, and therefore, we now embark to examine whether the framing of the Rules is mandatory for levying the lifetime tax as per the amended provisions. The Legislative History of Lifetime Tax on Maxi Cabs:-

The Government of Tamil Nadu introduced the Tamil Nadu Motor Vehicles Taxation [Amendment] Act, 2012 [Act 13 of 2012]. Section 4 of the Amending Act substituted clause [a] of sub-section [1-A] of Section 4 of the Principal Act. Similarly, Section 7 of the Amending Act added new Schedules VII to IX to the Principal Act. By the addition of the Eighth Schedule to the Principal Act and under Part I, lifetime tax was imposed on new Tourists Maxi Cab Vehicles. The lifetime tax was not levied for old Tourists Maxi Cab Vehicles, but quarterly tax alone was levied as per Part II of Eighth Schedule. The levy of lifetime tax on new Tourists Maxi Cab Vehicles by introduction of Eighth Schedule by the Amendment Act 13 of 2012, was challenged before this Court in R.Mahalakshmi and Others Vs. The Government of Tamil Nadu and Others [2012 [2] L.W. 581], referred to supra. The Hon’ble Division Bench of this Court dismissed the case, thereby upholding the validity of Section 4 and Section 7 and also the addition of new Schedules VII to IX to the Principal Act. The Government of Tamil Nadu introduced the Tamil Nadu Motor Vehicles Taxation [Amendment] Act, 2023, which was passed by the Legislative Assembly, after receiving the assent of the Governor on 06.09.2023, and published as Act 30/2023, in Part IV- Section 2 of the Tamil Nadu Gazette Extraordinary No.381, dated 07.11.2023. As per Section 1[2] of the Amendment Act, ‘’it shall come into force on such date as the State Government may, by Notification appoint’’. The Government of Tamil Nadu, vide Notification No.11 [2/HO/897 [B/2023]], issued in G.O.[2D] No.443, Home [Transport-1] Department, dated 07.11.2023, notified 09.11.2023 as the date on which the Act shall come into force. By virtue of the Amendment Act and the aforesaid Notification, the old Tourists Maxi Cab Vehicles were brought within the scope of the lifetime tax as per the rates mentioned in Part II of the Eighth Schedule attached to Sections 3 and 4[1-A] of the Taxation Act.

As already noted, the appellant has not challenged the provisions relating to the levy of lifetime tax on old Tourists Maxi Cab Vehicles, but has only questioned the enforceability of the Amendment Act in view of the failure of the Government to frame the relevant Rules prescribing the manner in which the lifetime tax has to be paid. The learned Senior counsel for the appellant submitted that under Section 4[1] of the Principal Act, the tax levied under the Act is ‘’to be paid in the manner prescribed by the registered owner or by any other person having possession or control of the motor vehicle, at his choice either quarterly, half yearly or annually on a license to be taken out by him for that quarter, half year or annual, as the case may be.’’ The learned Senior counsel, contends that in the absence of Rules, the prescription as contemplated by the provision is absent and therefore, the Act cannot be enforced. The learned Senior counsel, further contends that the legislature contemplated the framing of Rules, which is evident from the definition of the term ‘’prescribed’’, introduced under Section 5-A of the Amendment Act, which reads as follows: ‘’prescribed’’ means prescribed by Rules made under this Act.’’ Ergo, the learned Senior counsel contends that the framing of the Rules is mandatory, since the mode and manner of payment of lifetime tax, its assessment and the authorities empowered to determine and receive the same, can be prescribed only by the Rules.

Section 4[1-A] of the Taxation Act, 1974, reads as follows:- ‘’4.Payment of Tax:- [1]…… [1-A]Notwithstanding anything contained in sub-section [1]:-[a]In respect of the motor vehicles specified in Part-I of the Second Schedule and in Part-1 of the Third Schedule, at the time of its first registration, a lifetime tax shall be paid at the rates specified in Part-I of Second Schedule or in Part-1 of Third Schedule or Part 1 of Fifth Schedule as the case may be, on a licence to be taken out for the lifetime of such vehicles. [b]In respect of the motor vehicles specified in Part- II of the Third Schedule, the tax shall be paid either annually at the rates specified in the First Schedule or for the lifetime of such vehicles at the rates specified in Part II of the Third Schedule as the case may be, on a licence to be taken out for such vehicles for that year or for the lifetime, as the case may be.’’

Section 5 of the Amendment Act, amending Section 4 of the Taxation Act, 1974, reads as follows:- ‘’5.In Section 4 of the Principal Act:- [1]In sub-section [1-A]- [a]for clause [a], the following clause shall be substituted, namely- ‘’[a]in respect of the motor vehicles specified in Part-I of the Second Schedule, in Part-I of the Third Schedule, in Part-I of the Fifth Schedule, in Part-I of the Seventh Schedule, in Part-I of the Eighth Schedule and in Part-I of the Tenth Schedule, at the time of its registration, a lifetime tax shall be paid at the rates specified therein, on a licence to be taken out for the lifetime of such vehicles.’’ [b]clause [aa] and clause [aaa] shall be omitted ; [c]for clause [b], the following clause shall be substituted, namely- ‘’[b]in respect of the old motor vehicles specified in Part-II of the Second Schedule, in Part-II of the Third Schedule, in Part-II of the Fifth Schedule, in Part-II of the Seventh Schedule, in Part-II of the Eighth Schedule and in Part-II of the Tenth Schedule, a lifetime tax shall be paid at the rates specified therein on a licence to be taken out for the lifetime of such vehicles’’.

By the Amendment Act, clause [b] was substituted by bringing the old Tourists Maxi Cab Vehicles within the fold of lifetime tax.

Part-II of the Eighth Schedule reads as follows:- Old Tourist Maxi Cab at the time of Rate of Life Tax assigning new registration mark under Section 47 of the Motor Vehicles Act [per cent of the cost of the vehicle] or Old Tourist Maxi Cab plying and registered in this State, and if it’s age from the month of such registration Cost of the Vehicle S.No Age Not exceeding Exceeding 5 Exceeding 10 Exceeding 20 5 Lakhs lakhs but not lakhs but not lakhs exceeding 10 exceeding 20 lakhs lakhs 1 Not more than one year 10.75 per cent 11.75 per cent 16.75 per cent 18.75 per cent 2 More than one year but 10.50 per cent 11.50 per cent 16.50 per cent 18.50 per cent not more than two years 3 More than two years but 10.25 per cent 11.25 per cent 16.25 per cent 18.25 per cent not more than three years 4 More than three years but 10.00per cent 11.00per cent 16.00per cent 18.00per cent not more than four years 5 More than four years but 9.75per cent 10.75per cent 15.75per cent 17.75per cent not more than five years 6 More than five years but 9.50per cent 10.50per cent 15.50per cent 17.50per cent not more than six years 7 More than six years but 9.25per cent 10.25per cent 15.25per cent 17.25per cent not more than seven years 8 More than seven years 9.00per cent 10.00per cent 15.00per cent 17.00per cent but not more than eight years 9 More than eight years but 8.75per cent 9.75per cent 14.75per cent 16.75per cent not more than nine years 10 More than nine years but 8.50per cent 9.50per cent 14.50per cent 16.50per cent not more than ten years 11 More than ten years but 8.25per cent 9.25per cent 14.25per cent 16.25 per cent not more than eleven years 12 More than eleven years 8.00per cent 9.00per cent 14.00per cent 16.00per cent

A reading of the aforesaid Schedule shows that the lifetime tax is determined on the basis of the cost and the age of the vehicle. From the Schedule, it is seen that depending upon the value [cost] of the vehicle, the rate of tax decreases with the age of the vehicle. The issue before us is not whether the determinants, namely, the age and the cost of the vehicle, adopted for assessing the rate of lifetime tax for old Tourists Maxi Cab Vehicles is valid or not, but whether in the absence of a Rule prescribing the manner in which the lifetime tax levied is to be paid, the levy is sustainable.

Upon a reading and analysis of the above Schedule, we are of the view that the Schedule is self-contained and constitutes sufficient statutory guidance for the levy of the lifetime tax, requiring the framing of Rules wholly unnecessary. Further, it is not as if no Rules are in existence. The Tamil Nadu Motor Vehicles Taxation Rules, 1974, are still in existence and the Rules framed thereunder, prescribe for the mode of payment of tax, the authority competent to fix the tax, recording a Certificate of Registration, form of licence, period within which the tax has to be paid and penalty for non-payment. We therefore find no substance in the contention of the learned Senior Counsel for the appellant that in the absence of Rules, the levy of lifetime tax under amended provisions is unenforceable.

Insofar as the contention of the learned Senior counsel, for the appellant regarding the mandate of prescription by Rules, by relying on the provisions of Section 4[1] and Section 4[1-A], Section 8 and Section 15 of the Taxation Act, are concerned, we find that the learned Single Judge on proper appreciation, comparison and analysis of each of the provisions, rightly rejected the contention. We have gone through each of the provisions and on an analysis of the language of the provisions, we find that there is nothing in sub-section [1-A] to Section 4 of the Taxation Act which requires prescription by Rules in respect of the subject matter specified therein. As rightly pointed out by the learned Judge, only in sub-section [1] of Section 4, it is stated that the tax levied shall be’’be paid in the manner prescribed’’. When, Section 4[1-A] does not speak of any ‘’prescription’’ of Rules for payment of tax in contrast to the provisions of Section 4[1], we are of the view that prescription of Rules provided in Section 4[1], cannot be imported into sub-section [1-A] of Section 4 of the Taxation Act. The learned Judge has also rightly found that the provisions of Sections 8 to 15 of the Taxation Act, relating to the period of payment of taxes on quarterly and half yearly basis, have no bearing on sub-section [1-A] to Section 4 of the Act inasmuch as Section 4[1-A] deals with lifetime tax which is a one time payment and therefore, the prescription provided for payment of tax under Sections 8 and 15 of the Taxation Act have no relevance. We therefore, reject the submission of the learned Senior counsel for the appellant on this aspect. Double Taxation:-

The learned Senior counsel for the appellant submitted that the lifetime tax imposed on the old vehicles amounted to double taxation inasmuch as there was no clarity in adjustment of taxes already paid by the appellant under the erstwhile regime. The contention regarding double taxation is answered by the respondents in their counter affidavit filed in the writ petition. The respondents stated as follows:- ‘’10.It is submitted that, the difference of tax means the tax to be paid after detecting the tax[Quarterly/Half yearly/Annual] which was already paid for the vehicle. In that sense it implies that the cases in which were the Quarterly / Half Yearly / Annual Tax already been paid in respect of old vehicles at the time of shifting to life time tax may be detected from the life time tax due for the vehicle subsequent to the amendment of Tamil Nadu Motor Vehicles Taxation Act 30 of 2023.’’

In the light of the categorical admission of the respondents that only the difference in tax, would be collected by giving credit to the tax already paid by the vehicle owners, we find that the apprehension of the appellant is unwarranted. The apprehension of the appellant is sufficiently addressed by the respondents and therefore, the contention regarding double taxation is rejected.

In fine, we find no merit in the writ appeal and accordingly, the same stands dismissed. No costs. Consequently, the connected miscellaneous petitions are closed. (G.J.,J.) (N.M.,J.) 24-07-2026