Recently, the Supreme Court disposed of multiple writ petitions filed by transporters and tour operators. These petitions challenged the imposition of Authorization Fee/Border Tax by various State Governments, citing violations of the All India Tourist Vehicles (Permit) Rules, 2023.

The Court declined to adjudicate on the merits of the case and instead disposed of the petitions, granting the petitioners the liberty to raise their concerns before the appropriate High Courts having jurisdiction over the matter.

The petitions were initially filed in response to the State of Tamil Nadu's imposition of Border Tax/Authorization Fee on buses holding All India Tourist Permit. Subsequently, other states also adopted similar measures.

The States argued that they have the authority to impose and collect these charges under Entries 56 & 57 of List II of Schedule VII of the Constitution. These entries pertain to the States' powers regarding taxes on goods and passengers transported by road or inland waterways, and taxes on vehicles intended for use on roads.

The petitioners argued that the All India Tourist Vehicles (Permit) Rules, 2023, were formulated by the Central Government to facilitate uninterrupted transportation of vehicles across State boundaries. Additionally, they claimed that the revenue collected by the Central Government under these rules is intended to be distributed proportionately among the States.

The Supreme Court expressed that unless the specific State Rules are challenged, the actions of the States cannot be deemed illegal. It emphasized that petitioners should first seek relief from the High Court regarding such matters.

The Court clarified that it did not delve into the merits of the case.

"Insofar as the tax already recovered, the same would be subject to final outcome of the petitions that may be filed before the High Courts. Insofar as the period of interim order passed by this Court is concerned, the petitioners would give undertakings before the High Courts that, in case they fail, they will make good on demands which would have been raised for the period for which the stay has been enjoyed," the Court observed in conclusion.

Recently, another bench of the Supreme Court issued an interim order directing the State of Tamil Nadu to refrain from obstructing the movement of tourist buses holding All India Permits.

Case Title : Muthyala Sunil Kumar vs Union of India and connected cases.