MUTHYALA SUNIL KUMARversusUNION OF INDIA & ORS.

                 [2024] 7 S.C.R. 634 : 2024 INSC 499

                         Muthyala Sunil Kumar
                                   v.
                         Union of India & Ors.
                   (Writ petition (Civil) No. 864 of 2022)
                                 09 July 2024
           [Vikram Nath* and Satish Chandra Sharma, JJ.]

                           Issue for Consideration
       In the instant writ petitions, Petitioners-transporters and tour
       operators assailed the legality of different State Governments
       levying and collecting Authorization Fee/Border Tax, allegedly,
       in violation of All India Tourist Vehicles (Permit) Rules, 2023.
       Petitioners also prayed for refund of the Border Tax/Authorization
       Fee already realized by the State Authorities at the time of their
       vehicles entering the State.

                                  Headnotes†
       Inter-State transportation – All India Tourist Vehicles (Permit)
       Rules, 2023 – All-India Tourists Vehicles (Authorisation of
       Permit) Rules, 2021 – Levy and collection of Authorization
       Fee/Border Tax by State Governments – Petitioners are
       transporters and tour operators – Complaint that the State
       of Tamil Nadu and several other States were realizing Border
       Tax/Authorization Fee despite the transporters or the vehicles
       entering the State having already paid the requisite tax/fee
       under the Rules, 2023 – Tenability of:
       Held: The submission advanced by the States is that the demand
       being raised by them is primarily under the rules framed by the
       respective State Governments under Entries 56 & 57 of List II of
       Schedule VII of the Constitution – This Court is not inclined to
       go into the merits of the matter at this stage, as apparently, the
       fundamental question to be decided would be whether levy and
       realization of taxes by the respective States is covered by the Act
       and Rules framed by the respective States under Entries 56 & 57
       of List II of Schedule VII of the Constitution or not – The State
       enactments, rules and regulations being not under challenge,
       it cannot be said that the demand of Border Tax/Authorization
       Fee at the borders by the respective State Governments is bad
       under law – The petitioners, in order to succeed, have to consider
* Author
[2024] 7 S.C.R.                                                              635

             Muthyala Sunil Kumar v. Union of India & Ors.


     challenging the State provision contained in the Act – Also, the
     petitioners ought to have first approached their jurisdictional High
     Courts to challenge their respective State enactments – Accordingly,
     the petitions disposed of, without interference with demands raised
     by the State Governments while giving liberty to the petitioners to
     approach the jurisdictional High Courts for their reliefs – It is made
     clear that this Court neither entered into the merits of the matter
     nor examined the same. [Paras 7, 9, 10, 11]
     All India Tourist Vehicles (Permit) Rules, 2023 – Demand of
     Border Tax/Authorization Fee despite the transporters or the
     vehicles entering the State having already paid the requisite tax/
     fee under the Rules, 2023 – Challenge to – Writ petitions before
     Supreme Court – Prayer for refund of Border Tax/Authorization
     Fee already realized by the State Authorities – Tenability of:
     Held: In the instant case, the petitions are disposed of, without
     interference with demands raised by the State Governments while
     giving liberty to the petitioners to approach the jurisdictional High
     Courts for their reliefs – The tax already recovered would be subject
     to the final outcome of the petitions that may be filed before the
     High Courts. [Paras 11 & 12]

                                 List of Acts
     All-India Tourists Vehicles (Authorization/Permit) Rules, 2021;
     Constitution of India; All India Tourist Vehicles (Permit) Rules,
     2023; Motor Vehicles Act, 1988.

                              List of Keywords
     Inter-State Transport; Authorisation Fee; Border Tax; Motor Vehicles
     Act; Refund of Border Tax; Double Taxation; Taxation Without Legal
     Authority; Entries 56 & 57 of List II; Entry 35 of List II; Seventh
     Schedule to the Constitution of India; Liberty To Approach High Court.

                             Case Arising From
     CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 864 of
     2022
     (Under Article 32 of The Constitution of India)
     With
     Conmt. Pet.(C) No.1243 of 2023 In W.P.(C) No.864 of 2022, Writ
     Petition (C) No.756 of 2023 With Conmt. Pet.(C) No.1244 of 2023 In
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       W.P.(C) No.756 of 2023, Writ Petition (C) No.819 of 2023 With Conmt.
       Pet.(C) No.1245 of 2023 In W.P. (C) No.819 of 2023 and Writ Petition
       (C) No.1033 of 2023 With Conmt. Pet. (Diary No.46438 of 2023) In
       W.P. (C) No.1033 of 2023, Writ Petition (Civil) Nos. 998, 1043, 1058,
       1064, 1047, 1059, 1066, 1103, 1104, 1105, 970, 975, 1034, 1007,
       996, 984, 1015, 995, 1000, 1039, 1002, 1010, 1031, 1119, 1092,
       1178, 1115, 1112, 1138, 1143, 1127, 1144, 1125, 1150, 1173, 1167,
       1195, 1189, 1213, 638, 783, 799, 828, 831, 824, 808, 852, 815, 825,
       836, 812, 816, 853, 851, 833, 835, 834, 820, 857, 1139, 1147, 1156,
       1152, 804, 859, 832, 822, 855, 898, 865, 879, 872, 894, 955, 892,
       891, 953, 949, 950, 923, 956, 969, 935, 988, 947, 981, 992, 957, 964
       and 993 of 2023, Writ Petition (Civil) Nos. 29, 28 and 38 of 2024, Writ
       Petition (Civil) Nos. 1348, 1355, 1396, 1411, 1415, 1408, 1409, 1406
       and 1438 of 2023, Writ Petition (Civil) Nos. 98, 117, 176, 212, 264,
       290 and 316 of 2024
                          Appearances for Parties
       S Murlidhar, Navin Pahwa, Raghenth Basant, Sr. Advs., S. Mahesh
       Sahasranaman, Arjun Garg, Ms. Sagun Srivastava, Ms. Nisha Pandey,
       S. Udaya Kumar Sagar, Ms. Bina Madhavan, Eeshan D. Khaire, M/s.
       Lawyer S Knit & Co, Dileep Poolakkot, Bijo Mathew Joy, Muhammed
       Siddick, Shivam Sai, Ms. Mansha Shukla, M/s. Lead Counsel, Aakash
       Nandolia, Manoj V George, Ms. Shilpa Liza George, Km Vignesh
       Ram, Ms. Chaahat Khanna, Ms. Tanya Agarwal, Rishab Gupta, Nikhil
       Srivastav, Mrs. Shubhangi Tuli, N. Sai Vinod, Ms. Prerna Acharya,
       Ms. Kaushitaki Sharma, Abhinav, Sahil Ghai, Atul Shankar Vinod,
       B Ragunath, Mrs. Nc Kavitha, Vijay Kumar, Dileep Poolakkat, Aljo
       K. Joseph, Vinay Kumar Puvvala, Prashant Jhajharia, Raghunatha
       Sethupathy B, S. Sabari Bala Pandian, T. Harish Kumar, Navneet
       Dugar, Subham Kothari, Ms. Preethi G, Shine P. Sasidhar, M. Gireesh
       Kumar, Ankur S. Kulkarni, Ms. Uditha Chakravarthy, Ms. Shalaka
       Srivastava, Advs. for the Petitioner.
       Vikramjit Benerjee, A.S.G., Arvind P Datar, Jayanth Muth Raj, Sr.
       Advs., Gurmeet Singh Makker, Ms. Rekha Pandey, Naman Tandon,
       Ms. Monica Benjamin, Bhuvan Kapoor, Zoheb Hossain, Manish
       Pushkarna, Nachiketa Joshi, Sabarish Subramanian, C Kranthi
       Kumar, Vishnu Unnikrishnan, Naman Dwivedi, Danish Saifi, Ms.
       V Keerthana, Aman Prasad, Nishe Rajen Shonker, Mrs. Anu K
       Joy, Abraham Mathew, Alim Anvar, Mahfooz Ahsan Nazki, Polanki
[2024] 7 S.C.R.                                                          637

                 Muthyala Sunil Kumar v. Union of India & Ors.


      Gowtham, Kv Girish Chowdary, T Vijaya Bhaskar Reddy, Ms.
      Rajeswari Mukherjee, Meeran Maqbool, Ms. Archita Nigam, V. N.
      Raghupathy, Manendra Pal Gupta, Prakash Jadhav, Ravichandra
      Jadhav, Sanjeev Kumar, Ms. Devina Sehgal, Dhanajay Yadav, Anmol
      Sehgal, Rajiv Kumar Choudhry, Ms. G. Indira, Ms. Anindita Pujari,
      Advs. for the Respondents.
                       Judgment / Order of the Supreme Court

                                    Judgment
      Vikram Nath, J.
1.    This is a batch of 117 petitions, including four contempt petitions
      which are de-tagged for being listed separately, filed primarily by the
      transporters and tour operators under Article 32 of the Constitution
      of India assailing the legality of different State Governments levying
      and collecting Authorization Fee/Border Tax in violation of All India
      Tourist Vehicles (Permit) Rules, 2023.1 Broadly, there are three
      categories of petitions but the relief claimed which is common
      in all the petitions, is about the levy and collection of Border
      Tax/Authorization Fee.
2.    In some cases, there is a challenge to the All-India Tourists Vehicles
      (Authorisation of Permit) Rules, 20212 as also certain provisions of
      Motor Vehicles Act, 1988, however, such petitions were filed prior
      to the coming of the Rules, 2023. As such, the reliefs have been
      amended seeking directions for compliance of provisions contained
      in the Rules, 2023. In some cases, petitioners have also prayed
      for refund of the Border Tax/Authorization Fee already realized by
      the State Authorities at the time of their vehicles entering the State.
3.    Initially, it was the State of Tamil Nadu which was said to be realizing
      the Border Tax/Authorization Fee but, later on, several other States
      were also complained of realizing similar Border Tax/Authorization
      Fee despite the transporters or the vehicles entering the State having
      already paid the requisite tax/fee under the Rules, 2023. As such,
      other States also became the respondent-parties and notices were
      issued to them.


1    The Rules, 2023
2    The Rules, 2021
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4.     The Rules, 2023 superseded the All-India Tourists Vehicles
       (Authorization/Permit) Rules, 2021. After the coming into of the Rules,
       2023, the power of levying/collecting Border Tax/Authorization Fee by
       the State Governments at various border check posts from vehicles
       carrying All India Tourists Permit was to be done away with. There
       were primarily two objects of bringing in the Rules, 2023. Firstly,
       to make the movement of such tourist vehicles across the country
       through different States seamless and smooth; and secondly, the
       revenue to be generated by the Centre to be proportionately shared
       with the State Governments, also taking into account their previous
       revenue generation, and also, keeping in mind that their earlier
       revenue income was not reduced in any manner.
5.     The transporters started facing difficulties and harassment as
       alleged at the borders of different States where they were again
       being demanded Border Tax/Authorization Fee which has given rise
       to the filing of this group of petitions. Such demand of Border Tax/
       Authorization Fee was challenged on several grounds ranging from
       double taxation; levy being without legal authority; being in violation
       of the Rules, 2023 which had been framed under Entry 35 of List
       II of the Seventh Schedule to the Constitution of India, and various
       other grounds.
6.     In all these matters while issuing notices, interim relief was also
       granted that the State Governments were restrained from making
       any further realization of Border Tax/Authorization Fee.
7.     Upon notice, States appeared and filed their counter affidavits. The
       submission advanced by the States is that the demand being raised
       by them is primarily under the rules framed by the respective State
       Governments under Entries 56 & 57 of List II of Schedule VII of the
       Constitution. They have defended their competence to frame the
       rules, to levy and collect the taxes, which according to them, are in
       accordance to law.
8.     It is also their submission that the petitioners, in case, had any
       grievance ought to have approached the respective High Courts
       under Article 226 of the Constitution rather than approaching
       this Court under Article 32 of the Constitution. Lastly, and most
       importantly, it was contended that State Acts/Rules levying such tax
       has not been put to challenge and therefore, the petitions deserve
       to be dismissed.
[2024] 7 S.C.R.                                                         639

                Muthyala Sunil Kumar v. Union of India & Ors.


9.   Although counsel for the parties have raised their arguments on merits,
     but we are not inclined to go into the merits of the matter at this
     stage, as apparently, the fundamental question to be decided would
     be whether levy and realization of taxes by the respective states is
     covered by the Act and Rules framed by the respective States under
     Entries 56 & 57 of List II of Schedule VII of the Constitution or not.
10. The State enactments, rules and regulations being not under challenge,
    it cannot be said that the demand of Border Tax/Authorization Fee at
    the borders by the respective State Governments is bad under law.
    The petitioners, in order to succeed, have to consider challenging
    the State provision contained in the Act. There is another reason why
    we are not entertaining the matters on merit is that the petitioners
    ought to have first approached their jurisdictional High Courts to
    challenge their respective State enactments.
11. We, accordingly, dispose of these petitions without interfering with
    the demands being raised by the State Governments while giving
    liberty to the petitioners to approach the jurisdictional High Courts
    for their reliefs. It is made clear that we have neither entered into
    the merits of the matter nor examined the same.
12. Insofar as the tax already recovered, the same would be subject
    to final outcome of the petitions that may be filed before the High
    Courts. Insofar as the period of interim order passed by this Court
    is concerned, the petitioners would give undertakings before the
    High Courts that, in case they fail, they will make good on demands
    which would have been raised for the period for which the stay has
    been enjoyed.

     Result of the case: Writ Petitions disposed of.



     †
         Headnotes prepared by: Bibhuti Bhushan Bose
                                 (With assistance from: Sanyam Mishra)