Supreme Court reserves order on diesel SUV ban

The Supreme Court on Monday reserved verdict on a batch of petitions seeking a direction to lift the ban on registration of SUVs and diesel cars with engine capacity of 2000CC and above, indicating lifting the ban if the manufacturers voluntarily agreed to pay one time environment compensation cess of one per cent on the show room value of the vehicles.

A three-judge bench of Chief Justice T.S. Thakur and Justices A.K. Sikri and R. Banumathi accepted the offer made by senior counsels Gopal Subramanium, Mohan Parasaran, Vishwanath Shetty, Gopal Jain, Abhishek Singhvi and others, appearing for Mercedes and Toyota, for voluntarily paying one per cent cess for allowing registration. Attorney-general Mukul Rohatgi submitted to the court that since cess being a tax cannot be levied by the court as it is the fiscal policy of the government. The court in December last had imposed the ban on registration.

Appearing for Mercedes, Mahindra, General Motors and Toyota car manufacturers, senior counsel Gopal Subramanium and Gopal Jain, urged the court to reconsider lifting the ban and said they were willing to pay a one time cess.

Mr Subramanium said that at present Euro-IV emission norms are in place for vehicles and for switching to more stricter emission norms of EURO-VI, there was the need for advance fuel which is presently unavailable. The CJI repeatedly told the counsel that in Europe emission tests had failed and many cars did not meet the standards. He said once the pro type is approved what is the guarantee that the vehicles conform to the standards.

AG seeking modification of the order said the ban had caused practical difficulties. Automobile industry in the country being the fifth larges sector receiving FDI is now facing obstacles.