SC lets big diesel cars return to roads, but with 1 percent cess

Diesel only

Almost eight months after it banned in Delhi-NCR registration of diesel SUVs and high-end vehicles with an engine capacity higher than 2000 cc, the Supreme Court Friday lifted the prohibition, on the condition that 1 per cent green cess be paid on the ex-showroom price of the vehicle.

The ban had been imposed as a measure to curb pollution in the capital.

The ‘environment protection charge’, which will most likely be passed on to the buyers, will be a pre-requisite before transport authorities in Delhi and the national capital region (NCR) register any new diesel vehicle with an engine capacity over 2000 cc.A bench led by Chief Justice of India T S Thakur said that the cess shall be deposited in a separate account by the Central Pollution Control Board. “Deposit of 1 per cent of ex-showroom price of the vehicle as environment protection charge shall entitle manufactures/dealers to have cars registered in Delhi-NCR. Our order dated December 16, 2015 shall stand modified to that extent,” said the bench, also comprising Justice A K Sikri and Justice R Banumathi.

Last year, while banning registration of such vehicles, the court had said, “It is noteworthy that diesel vehicles of 2000 cc and above and SUVs are generally used by more affluent sections of our society and because of the higher engine capacity, they are more prone to cause higher levels of pollution. A ban on registration of such vehicles will not, therefore, affect the common man or the average citizen in the city of Delhi.”

But on Friday, it opted to lift the ban by making an ad hoc arrangement until the larger debate on diesel is settled.

The reprieve by the top court should lift the spirits of auto-makers such as Mahindra, Toyota and Mercedes Benz, which were dealt a blow by the ban. Toyota Kirloskar Motor was perhaps the most affected player as two of its top-selling models, Innova and Fortuner, feature engines over 2,000 cc. Luxury car-makers such as Mercedes Benz, Audi and BMW were also affected since more than 70 per cent of their sales come from diesel vehicles, and Delhi-NCR is considered a crucial market for them.

The bench modified its order on a joint plea by Mercedes Benz, Toyota’s major dealer Galaxy Automobiles and Society of Indian Automobile Industry (SIAM) to lift the restraint as they were willing to deposit a green cess until it is examined and decided whether diesel is the chief reason for air pollution.

Senior advocates Abhishek Manu Singhvi, Gopal Subramanium, Mohan Parasaran and Gopal Jain appeared for the car-makers and said they were filing affidavits stating that they would voluntarily deposit 1 per cent of the ex-showroom price as environment protection charge.

The order came even as Solicitor General Ranjit Kumar registered the objection that the government opposed imposition of a cess by a court since cess was an issue exclusively within the domain of the legislature.

Senior lawyer Harish Salve, who has been appointed as amicus curiae in a PIL on air pollution filed by environmentalist M C Mehta in 1985, also argued that the cess had to be an interim measure and that it should be imposed on all diesel vehicles.At this, the bench clarified that the issue of diesel being a prime pollutant as well as imposition of a grees cess on diesel vehicles with engine capacity less than 2000 cc shall remain open and would be adjudicated at a later date. It also “left open” the issue of whether a higher environment protection charge should be levied on diesel vehicles. The court said the order is applicable to all car manufacturer or dealers who want to sell diesel vehicles over 2000 cc, but added that it would not be applicable retrospectively.

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