Ban on diesel vehicles:SC reserves order on auto giants' pleas

Supreme Court today reserved its verdict on pleas seeking modification its order banning registration of diesel-run SUVs and high-end cars with engine capacity of 2000 CC and above in Delhi and NCR, indicating that such vehicles may be allowed to be registered again on payment of one per cent of ex-showroom price as green cess.
The Ministry of Heavy Industry and Public Enterprises, which supported the automobile giants' in bid for modification of the order, however opposed the court-mandated imposition of green cess on buyers of big diesel cars and SUVs.
"The likely imposition of green cess for diesel cars of more than 2000 cc will not be in consonance with the constitutional scheme of things as in terms of Article 265 of the Constitution 'no tax can be levied without the authority of Parliament," Attorney General Mukul Rohatgi told a three- judge bench headed by Chief Justice T S Thakur.

"The presumption that bigger diesel engines create more pollution is not correct as bigger diesel cars have better emission norms," Rohatgi told the bench which also comprised Justices A K Sikri and R Banumathi.
"Are you (AG) appearing for automobile companies or the Centre," the bench asked Rohatgi.
"I am appearing on behalf of Ministry of Heavy Industry and Public Enterprises. Banning the registration will show the inconsistencies in our norms and regulations. Huge FDIs are involved. Lakhs of jobs are there," Rohatgi said and referred to data to show that diesel cars, which are half of the engine capacity of big vehicles like Landrover, emit more particulate matters (PM).

The top law officer said the Centre was willing to conduct a "multi-pronged study" on diesel vehicles' effect on environment and imposition of green cess and would come back to the court, and, in the meantime, the stay on the registration of big diesel vehicles should be lifted.

"Who is stopping you from doing the study," the bench then asked.
At the outset, senior advocate Gopal Subramanium, who is
appearing for Mercedes Benz, said diesel cars also conformed to the emission standards prescribed under BS-IV and moreover, there were plans to leapfrog to BS-VI in next few years.
He said companies like Audi and BMW, which manufactured cars with engine capacity just below 2000 cc, were being benefited as the order bans cars of 2000 cc and above.

The Mercedes counsel said the company was willing to pay one per cent of the purchase price of the car either in an escrow account or with the court registry provided the ban is lifted.
Subramanium also referred to the existing tax structure with regard to diesel and petrol vehicles to drive home the point.
During the hearing, the Attorney General said the Centre was working on a "multi-pronged" approach to mitigate pollution and one of the measures was to ensure that old vehicles, which pollute the most, are "scrapped".
Advocate Aprajita Singh, who along with senior advocate Harsh Salve is assisting the court as amicus curiae in the 1984 PIL filed by environmentalist M C Mehta, opposed the plea of automobile majors and the Centre on grounds including the doctrine of "inter-generational equity" and precautionary principle.

She said it would not be correct for the Centre to say that the apex court cannot determine aspect of imposition of cess and referred to the top court's earlier directions imposing Net Present Value in cases of forest degradation.
She also said the suggestion for one per cent imposition of green cess was not proportionate and cited the study that proportional differentiation in diesel rates was 20 per cent.
She said the study has also revealed that one out of every three children is prone to lung infection and therefore, the concept of "inter-generational equity" cannot be ignored.
While she was making the submission at the fag end of the hearing, the bench said, "why are you presuming that we are vacating the order".

Earlier, on June 29, the court had said it was open to lifting the ban on registration of heavy diesel vehicles in Delhi and NCR subject to a levy of one-time environment compensation cess.