Spare bus - used as a contract carriage - collection of tax.

We come across several check reports wherein the checking officer invariably check the spare buses (reserve stage carriages) issued with temporary permit under Section 88(8) of Motor vehicles Act 1988 but misused as contract carriage and suggest that tax as applicable to omni buses has to be collected.

Section 11 of the TNMVT Act 1974 enables the Authority to collect additional tax in certain cases.

The spare buses are issued with special permits under Section 88 (8) which can never be equated to a permit of contract carriage under Section 74 of the Act and so tax cannot be levied under clause 2 of the first schedule of taxation Act 1974.

So if at all there is any violation of permit condition action has to be initiated
against it and collection of tax at omnibus rate is not warranted.

So says the Government in letter no. Ms 119 dated 7.2.2003 written by the Home Secretary to A G Chennai in a case.