Gujarat high court on Thursday rejected a public interest litigation that demanded abolition of Value Added Tax (VAT) imposed on CNG by the state government.

A bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala turned down the demand with observation that levying taxes is a state government's subject and the court needs not interfere in policy matters.

This PIL was filed by the Gujarat Rajya Auto Rickshaws Federation with contention that Gujarat government charges 15% VAT on sale of CNG, and this results in considerable price hike. The court should direct the state government to consider either reduction or abolition of such taxes on CNG, particularly when the Central government has been directed by the high court to supply more gas so as to reduce gas prices and bring it to the rate it is sold in Delhi and Mumbai.

The Federation's PIL claimed that state like Delhi does not charge such tax, whereas it is only 4% in Maharashtra and 5% in Haryana. The high VAT in Gujarat is the reason behind costly gas. The PIL requested the court to direct the state government to rationalize VAT, and if possible to abolish it.

The petitioner federation argued that the increase of natural gas supply from the Centre coupled with reduction of duty could really bring down gas prices in Gujarat.