Counter-signature of inter-State permit is a mandatory statutory condition precedent for levying motor vehicle tax.

The petitioner, an inter-state stage carriage permit holder operating between Odisha and West Bengal, challenged a letter dated November 25, 2024, issued by the STA West Bengal.

The impugned letter demanded additional motor vehicle tax for various periods between 2019 and 2026 as a precondition for processing the permit.

While the permit-issuing State (Odisha) renewed the permit from June 3, 2021, to June 2, 2026, and requested a counter-signature from West Bengal on September 16, 2021, the West Bengal authorities failed to counter-sign the permit, effectively preventing operation.

The petitioner further contended that taxes for the 2019–2020 period had already been paid.

1. Whether the writ petition is maintainable despite the existence of an alternative statutory appeal remedy under Section 9 of the West Bengal Motor Vehicles Tax Act, 1979.

2. Whether the reciprocating State can demand additional tax for a period during which it has withheld the mandatory counter-signature of an inter-state permit.

3. Whether the demand for taxes already paid by the petitioner amounts to arbitrary administrative action.

Section 88(1) of the Motor Vehicles Act, 1988, which mandates that a permit issued in one State is invalid in another unless counter-signed by the reciprocating State's authority.

Sections 6 and 7 of the West Bengal Additional Tax and One-time Tax on Motor Vehicles Act, 1989, which stipulate that additional tax is leviable only for the duration for which the counter-signature "subsists" and that validity of the counter-signature must commence before the tax becomes payable.

The constitutional principle of non-arbitrariness under Article 14, prohibiting double taxation and unsupported fiscal demands.

The court reasoned that the power to levy tax is inseparably linked to the conferment of operational rights via counter-signature.

Since the respondent failed to counter-sign the renewed permit despite requests since 2021, no "taxable event" occurred as the vehicle could not lawfully operate in West Bengal.

The court found that requiring tax remittance as a precondition for counter-signature violates the statutory scheme where the tax liability is co-extensive with the subsistence of the counter-signature.

Regarding maintainability, the court held that since a formal order by a Taxing Officer had not been passed, the statutory appeal was not yet matured, and the presence of "gross arbitrariness" justified judicial review under Article 226.

The Court: (i) Set aside the impugned demand letter dated September 25, 2024; (ii) Directed the STA West Bengal to grant the counter-signature within 10 days; and (iii) Clarified that the State remains free to realize genuine outstanding dues in accordance with law, provided they are not duplicative or for periods without valid counter-signature.