The Rajasthan High Court has upheld the State Government’s power to create a separate taxable category for sleeper buses but struck down tax demand notices issued against operators due to procedural irregularities.
A division bench comprising Justice Vinit Kumar Mathur and Justice Anuroop Singhi delivered the judgment in a batch of writ petitions led by Khuman Singh vs. State of Rajasthan. The petitions challenged a February 24, 2021 notification amending the Rajasthan Motor Vehicles Taxation Act, 1951, which introduced a new category at Serial No. 7(a)(iii) for sleeper buses and excluded them from certain tax exemptions granted to other contract carriage buses.
The petitioners argued that the State lacked legislative competence to classify sleeper buses separately based on “body type”, as vehicle classes are determined under the Central Motor Vehicles Act, 1988. The amendment was arbitrary and violated Articles 14, 265, and 301 of the Constitution. Sleeper buses had always been taxed based on seating capacity, and the new category unfairly denied them the 50–70% tax exemptions granted to other regional contract carriage buses. The demand notices (Form MTR dated March 24, 2023, and Form MTQ dated June 21, 2023) were issued without following due process, including providing hearing opportunities and proper computation details.
The State and Union of India contended the classification was valid and within State powers under Entry 57 of List II and Entry 35 of List III of the Constitution. Sleeper buses serve primarily long-distance night routes; granting exemptions could lead to an unhealthy shift to regional routes and disrupt long-distance public transport. The amendment was in line with Rule 7.14A of the Rajasthan Motor Vehicles Rules, 1990, which defines sleeper coaches. Differential taxation based on body type and operational area serves a legitimate public interest and revenue considerations.
The High Court held the State has the competence to create taxable sub-categories based on body type within an existing class of vehicles. Sleeper buses are not a new class but fall under the omnibus/contract carriage category already recognized under the Motor Vehicles Act. Rule 7.14A defining “sleeper coach” provided sufficient basis for taxation differentiation. The denial of exemptions to sleeper buses was justified on grounds of promoting regional seating bus services and avoiding unfair competition.
However, the court found serious procedural lapses in the demand notices. The authorities continued taxing petitioners under the old category even after the 2021 amendment, and later issued notices without proper computation or providing certified orders, violating Rule 8 of the Rajasthan Motor Vehicles Taxation Rules.
The court upheld the February 24, 2021 notification creating Serial No. 7(a)(iii) for sleeper buses. The impugned MTR and MTQ demand notices against the petitioners were quashed for non-compliance with procedural safeguards. The State was given liberty to initiate fresh proceedings strictly in accordance with law.
Case Details
Case Title: Khuman Singh Versus State Of Rajasthan
Case No.: D.B. Civil Writ Petition No. 11535/2023
Date: 22/08/2025
Counsel For Petitioner: Saurabh Maheshwari
Counsel For Respondent: Sajjan Singh Rathore, AAG
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