Case Background
The petitioner is the management of a school operating buses for transporting students. These buses are registered motor vehicles liable to pay tax under the Bihar Motor Vehicles Taxation Act, 1994.
During the first wave of the COVID-19 pandemic, there was a national lockdown. Schools were shut and school buses did not run on the roads. To give some relief, the State of Bihar issued a notification dated 30.06.2020.
Under this notification, owners of motor vehicles were allowed a 40 per cent rebate on motor vehicle tax for the period between 21.03.2020 and 30.06.2020. If the tax for this period was paid by 31.07.2020, no penalty would be charged.
The school management felt this relief was not enough. It filed Civil Writ Jurisdiction Case No. 4525 of 2022 before the Patna High Court. The case was heard by a Division Bench comprising Hon’ble the Chief Justice and Hon’ble Mr. Justice Harish Kumar, and decided on 15.04.2024.
What the Court Examined and Decided
The core dispute was about how much tax relief should be given to vehicle owners, especially school buses, for the lockdown period when vehicles were not actually used.
The petitioner’s counsel argued that the school buses listed in the writ petition had not plied during the relevant period because of Government restrictions. Since there was no use of the buses, it was contended that the Government could not limit the benefit to only 40 per cent rebate.
The petitioner wanted the entire motor vehicle tax paid during the period when COVID-19 “raged across the country” to be refunded. It also argued that there should be no penalty even if the tax was paid after 31.07.2020, and that such tax and penalty, if already paid, should be returned.
Another contention raised was that school buses should not be subjected to Green Tax, particularly when they are used for transporting children to and from school.
The Patna High Court first examined the legal scheme under the Bihar Motor Vehicles Taxation Act, 1994. The Bench noted that the levy of tax under this Act is on every owner of a registered motor vehicle. Importantly, the Act does not make actual use of the vehicle on the road a necessary condition for levy of tax.
The Court stated that any registered motor vehicle is liable to tax “since it is kept ready for use on the roads within the State of Bihar.” The tax is therefore linked to ownership and readiness for use, not to the number of days or months the vehicle actually runs.
The Court then checked whether the petitioner had taken any steps under the Act to suspend liability for the buses during the lockdown. The judgment records that the petitioner did not claim to have sought suspension of registration, nor did it show any prior intimation of a temporary discontinuance of use of the vehicles.
Such a process is specifically provided in Section 17 of the Bihar Motor Vehicles Taxation Act. Under that section, owners can apply for relief when a vehicle is not to be used for a period. Since the petitioner had not used this legal route, the Court held that the liability to pay tax continued as per law.
The Bench also drew support from Section 14 of the Taxation Act. That provision requires payment of tax even by vehicles having permits issued by Transport Authorities of other States if they are to be “used or kept for use” within Bihar. From this, the Court read the legislative intention that the mere fact of a vehicle being kept for use within the State is enough to attract tax.
Therefore, the Court concluded that “use of the vehicle itself is not a necessary requirement” for attracting the levy of tax under the Act.
Turning to the notification dated 30.06.2020, the Court observed that the rebate of 40 per cent was granted specifically for the period 21.03.2020 to 30.06.2020, which was the period of national lockdown due to the pandemic. In the Court’s words, it was a “beneficial notification” granting tax rebate for that fixed period.
The Bench held that the petitioner could not challenge such a beneficial notification for part exemption of tax simply on the ground that, in its view, full exemption ought to have been given. Decisions on the extent of tax exemption or rebate fall within the policy domain of the Government, especially when Section 15 of the Taxation Act itself enables part exemption of tax.
The Court also reiterated a settled principle: tax is not based on “quid pro quo” (i.e., not a fee paid in direct exchange for a specific service). Therefore, the existence of a national lockdown or orders not to reopen schools, resulting in non-use of vehicles, does not by itself wipe out liability under the Taxation Act.
Further, the Taxation Act already contains specific provisions and modes through which exemptions can be granted, usually on an application made by the registered owner. In this case, no such application or step by the petitioner was shown to the Court.
On the question of Green Tax on school buses, the Court again sided with the State’s position. The petitioner argued that school buses should not be levied Green Tax. The Bench held that exemption for school buses from such tax lies entirely within the domain of the State Government, and the State, “in its wisdom”, had not chosen to give this exemption.
The Court clarified that Green Tax is imposed on “registered transport vehicles which are more than 20 years old,” keeping in mind the pollution caused by old vehicles. The fact that the vehicles ferry school children does not change the environmental impact they may have.
According to the Court, it is not the “status of the passengers” that matters, but the “condition of the engine” which leads to environmental pollution. The levy of Green Tax is based on the principle of “polluter pays,” meaning that those whose vehicles pollute more must bear the cost.
The Court went a step further to advise that, if the petitioner wished to avoid Green Tax, it should purchase new vehicles for transporting children. This, the Court noted, would also be a “positive step” in ensuring the safety of school-going children.
After considering all arguments, the Bench concluded that there was “absolutely no reason” to interfere with the Government notification or with the Green Tax regime. On that basis, the writ petition was dismissed.
Why This Judgment Matters
This judgment is important for all owners of registered vehicles in Bihar, especially schools, transporters, and bus operators who stopped operations during COVID-19.
First, it makes clear that under the Bihar Motor Vehicles Taxation Act, tax liability does not depend on actual running of the vehicle on the road. If the vehicle is registered and kept ready for use, tax is payable unless the owner has formally followed procedures for suspension or discontinuance under the Act.
Second, the decision shows that courts are slow to interfere with Government policy decisions on how much tax relief to grant, even in exceptional times like a pandemic. A partial rebate given by the State as a policy measure cannot easily be challenged as insufficient.
Third, for school managements using older buses, the ruling confirms that they are not automatically exempt from Green Tax just because they transport children. Age and condition of the vehicle, not the identity of passengers, drives the Green Tax liability.
Practically, the judgment serves as a caution to vehicle owners: if they plan to keep vehicles off the road for a long period, they must use the legal provisions for suspension or discontinuance of use. Otherwise, tax and even Green Tax will continue to apply.
Legal Issues and Answers
- Issue: Can a school management claim full exemption and refund of motor vehicle tax for the COVID-19 lockdown period, beyond the 40% rebate granted by Government notification dated 30.06.2020?
Answer: No. The Patna High Court held that the notification was a beneficial, policy decision giving part exemption, and there was no ground to interfere or demand full exemption or refund. - Issue: Does non-use of school buses during lockdown automatically remove liability to pay motor vehicle tax under the Bihar Motor Vehicles Taxation Act, 1994?
Answer: No. Tax is levied on ownership of registered vehicles kept ready for use. Non-use does not cancel tax liability unless statutory procedures like suspension under Section 17 are followed. - Issue: Are school buses exempt from payment of Green Tax, especially when they carry children?
Answer: No. The Court held that exemption of school buses from Green Tax is for the State to decide. Green Tax applies to transport vehicles more than 20 years old, based on the “polluter pays” principle, regardless of the status of passengers.
Cases Cited by the Court
- The judgment does not record any specific previous case law being cited or relied upon.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 4525 of 2022
Case Title: Buddha Vikas Samiti, Buddha Colony, Patna through its Secretary Shanti Roy vs. The State of Bihar & Others
Coram: Hon’ble the Chief Justice; Hon’ble Mr. Justice Harish Kumar
Citation: 2024 (2) PLJR 475
Advocates: For the petitioner: Mr. Dinu Kumar, Advocate; Mrs. Ritika Rani, Advocate. For the respondents: Mr. Sarvesh Kumar (GP-24).
Nature of the Case: Writ petition under civil writ jurisdiction challenging a Government notification on motor vehicle tax rebate and Green Tax applicability.
Date of Judgment: 15.04.2024
Link to Judgment: View full judgment on Patna High Court website
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