Constitutional Authority for Road Tax

• Road tax is imposed under the authority granted by the Constitution of India.
  
• Article 246 read with the Seventh Schedule allocates taxation powers to the Union and States.
  
• Road tax falls under the State List (Entry 57) which allows state legislatures to tax vehicles used or kept for use on roads.
  
• Each state can independently enact laws to collect road tax from vehicle owners.
  
• The power to levy, structure, and revise road tax rates lies solely with individual states.
  

Motor Vehicles Act, 1988

• The Motor Vehicles Act, 1988 is the central legislation regulating registration, use, and taxation of vehicles.
  
• While the Act sets standards for road transport, it allows states to determine their own tax framework.
  
• It provides for registration certificates, permits, and fitness norms, all linked to road tax compliance.
  
• The Act mandates that vehicles must not be used in public places unless registered and taxed.
  
• Non-compliance with the Act, including tax defaults, attracts penalties and enforcement actions.
  

State-Specific Taxation Laws

• Every state has its own Motor Vehicles Taxation Act or equivalent law.
  
• These laws outline rates, slabs, methods of payment, exemptions, and penalties.
  
• Road tax may be levied as a one-time payment, annual, quarterly, or lifetime based on the vehicle type.
  
• States also specify separate rules for private, commercial, transport, and contract carriage vehicles.
  
• Amendments and tax notifications are periodically issued by State Transport Departments.
  

Judicial Interpretation and Enforcement

• Courts have upheld the constitutional validity of road tax as a fee for public road use.
  
• They emphasize that road tax is a regulatory fee, not a general revenue tax.
  
• Judicial review is applied to ensure that the tax is not arbitrary, discriminatory, or overlapping.
  
• Courts have intervened in cases of double taxation, refund denial, and excessive levies.
  
• Legal decisions support the principle that road tax must be reasonable and linked to road usage.
  

Complementary Transport Rules and Policies

• Road tax is also governed in conjunction with rules under the Central Motor Vehicle Rules, 1989.
  
• These include registration procedures, tax token display, and transport permit conditions.
  
• State policies for electric vehicles, green tax, and pollution surcharge may impact road tax rates.
  
• Road tax enforcement is tied to compliance with insurance, PUC, and fitness certification.
  
• It forms a key component of the transport regulation ecosystem in India.