Luxury car makers and dealers breathed a sigh of relief with the Supreme Court on Friday allowing the fresh registration of high-end diesel cars and SUVs in Delhi and the National Capital Region, provided they pay the green charge of one per cent of the vehicle's ex-showroom price.
Implementing the 'polluter pays' legal principle, a Special Bench led by Chief Justice of India T.S. Thakur directed the car makers or dealers to deposit the one per cent 'environment compensation charge' with the Central Pollution Control Board. The ban, imposed on December 16, 2015, on diesel-run luxury vehicles, was meant to curb air pollution. But for thousands of middle income families in the National Capital Region, the order may mean shelling out more hard-earned money to buy a diesel car.
The apex court has now agreed to hear arguments on extending the levy to smaller diesel cars with less than 2000 CC engine capacity. The Bench's decision to modify its December 16, 2015 ban on fresh registration of diesel cars with 2000 CC and above engine capacity came after manufacturers and dealers agreed to convey to their buyers that the payment of ECC would be a “condition precedent” for registration. In fact, the suggestion for the one percent ECC came from Mercedes.
The Bench, also comprising Justices A.K. Sikri and R. Banumathi, recorded the submission of amicus curiae and senior advocate Harish Salve that registration of these luxury cars should not be done until the receipt of payment of ECC was produced before the registration authority. “Registration shall be done only after the authority satisfies itself upon the deposit of the ECC amount,” Chief Justice Thakur observed in the order. The CPCB has been directed to open a separate bank account for the deposit of the ECC collected.
The court modified its December order despite the Centre's objection that courts do not have the authority to levy such charges, which lie solely within the domain of the Executive. The Bench left open the question whether the rate of ECC should be increased, but said such an increase would not be done retrospectively. “Let us first get used to one percent ECC. We do not want the sword of a higher charge hanging over them at this moment,” Chief Justice Thakur said.
The Supreme Court had banned fresh registration of high-end diesel cars while continuing with its October 2015 order to impose ECC on commercial vehicles entering Delhi.