SC upholds tax sops to state buses

Legal Correspondent

New Delhi, October 12

The Supreme Court today dismissed a petition by private bus operators of Himachal challenging the tax sops being given to state-owned buses, enabling the staff to charge low fares from passengers.

A Bench, headed by Justice Ranjan Gogoi, refused to entertain the appeal by the Niji Bus Operators Kalyan Sabha and others through advocate Shalu Sharma.

Appearing for the sabha, senior advocate Vibha Dutta Makhija pleaded that the tax exemption had given an unfair advantage to the state road transport corporation and rendered private operators uncompetitive.

The government had exempted state buses from payment of Rs 38,500 each as annual token tax, besides the special road tax of 10 paise per passenger per kilometre under the Jawaharlal Nehru Urban Renewal Mission (JNNURM).

The JNNURM was meant only for urban areas, but the state government had given the tax sops to the corporation for all its buses plying across the state, including far-flung rural areas, and on inter-state routes, Makhija pleaded.

The state government had deliberately fixed fares in a particular manner, allowing its buses to undercut private operators. The petitioners also pleaded that the government was misusing its power with mala fide intention to enlarge the scope of the JNNURM beyond urban areas.

The Bench, however, said the government was well within its powers to grant exemptions in taxes. It also refused to keep the issue alive by tagging it with a similar case pending in the SC.

The petitioners said they had gone to the state high court, pleading that the tax exemptions to state buses in 2009 had resulted in huge losses for them, virtually ruining them. They had pleaded that this was against the interest of the commuting public as well as the private bus operators plied about 5,500 buses which was double the number of state buses. The HC, however, failed to address their grievances by merely restraining state buses from charging lower fares than the minimum prescribed in the September 2013 notification, they pleaded in the appeal.