In Brief
Tata Motors and other vehicle manufacturers challenged the Bihar Motor Vehicles Taxation Act, 1994, Section 6, which imposed tax on vehicles in their possession before delivery to buyers. They argued the state lacked authority to tax mere possession and that amendments to the central Motor Vehicles Act excluded manufacturers from the taxation scheme. The Supreme Court upheld Section 6 as valid under Entry 57 of the State List, holding that the state may tax vehicles suitable for road use regardless of ownership status. The Court held manufacturers and dealers liable to pay the prescribed annual tax while in possession during business operations. It also upheld the imposition of statutory penalties for delayed payment, rejecting the appellants' arguments that the central statute's amendments affected the state law's application.", <parameter name="citations">[]
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