STATE OF GUJARAT vs AKHIL GUJARAT PRAVASI V.S.MAHAMANDAL&ORS

The Supreme Court upheld the Gujarat High Court's decision striking down Sections 3A(1) and (2) of the Bombay Motor Vehicles Tax Act, 1958, and Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959, which imposed tax on vehicles not in use. The Court ruled that the amendments made by Gujarat Act No.9 of 2002, which sought to validate the tax collection, were unconstitutional. The Court directed the State to refund the tax collected from the respondents for non-used vehicles, reinforcing the principle that taxation must have a legitimate basis and cannot be arbitrary.