Vehicles before sale liable to tax

Manufacturers of motor vehicles, who keep them in their possession in the course of business while the vehicles are suitable for use on roads, shall pay a tax under the Bihar Motor Vehicles Taxation Act, according to the Supreme Court. It stated so while dismissing a batch of appeals led by Tata Motors vs State of Jharkhand. The tax proviso applicable to Bihar and Jharkhand was challenged as unconstitutional earlier by manufacturers and dealers in the Patna High Court, but it was dismissed. Their appeals to the Supreme Court were also dismissed. Now they challenged the levy on the chassis in their possession while being sent to the dealers or to the ultimate buyer. The court stated that the vehicles were capable of being used and, therefore, will attract the levy. The judgment also upheld the penalty imposed on the manufacturers as the law provided it. The plea of the manufacturers that they acted bona fide was also rejected by the court.