The Supreme Court (SC) today reserved its order over a plea seeking to lift the ban on registration of diesel-engined passenger cars and SUVs over 2,000cc in Delhi-NCR. Automakers such as Mercedes-Benz India and Toyota Kirloskar Motor, whose sales have been adversely impacted by the ban, had filed an application in the SC against the ban.

The government told the SC that a new policy to combat pollution including scrapping of old diesel vehicles and a scheme to replace about 28 million automobiles registered before March 31, 2005, by BS IV-compliant ones by April 2017, is on the anvil, as per a PTI report.

Attorney General Mukul Rohatgi told a bench comprising Chief Justice TS Thakur and Justices AK Sikri and R Banumathi that the government is mulling providing monetary incentives to old vehicle owners for replacing them with BS-IV standard, and by 2020, there will be vehicles complying with BS-VI standards.

"Government will shell out Rs 50,000 to Rs 1,00,000 (to each old vehicle owner)," the Attorney General said. He made these submissions while placing before the bench the affidavit filed by the Ministry of Heavy Industry and Public Enterprise in which, it also opposed the suggestion that apex court will determine the amount of an environment tax likely to be imposed on owners of large diesel-engined vehicles at the time of registration.

"The likely imposition of green cess for diesel cars of more than 2,000cc 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 authority of law and such cess must be imposed through legislation by authority of Parliament,” he said.  

The PTI report quoted Rohatgi as saying, "The presumption that bigger diesel engines create more pollution is not correct as bigger diesel cars have better emission norms… Banning the registration will show the inconsistencies in our norms and regulations. Huge FDIs are involved. Lakhs of jobs are there." 

The SC had earlier said that it was willing to consider lifting the ban, subject to the levy of a one-time environment compensation cess. However, the central government, which has strongly come out against the ban, opposed the imposition of any environment cess and sought a time of six weeks to conduct a study on impact of diesel vehicles on the environment, according to reports.

In a bid to tackle the rising levels of pollution in Delhi-NCR, the SC had imposed a ban on the sale of diesel cars and SUVs with engine capacities over 2,000cc in the region, starting mid-December until its expiry on March 31, 2016. However, the apex court extended this ban on diesel passenger vehicles until the next hearing, which took place on April 30, 2016. It then extended the restriction for a second time until its next hearing on May 9, 2016.

The indefinite ban on sale of large cars has put many automakers in a state of disarray with the automotive body Society of Indian Automobile Manufacturers (SIAM) saying the move points towards an erratic policy regime and has discouraged carmakers from investing in the country.