The Tokyo District Court says the central government's decision to raise taxi fares in the capital is unreasonable as it forces taxi firms to raise fares regardless of their situations.
The transport ministry in November last year raised the upper limit of the base fare for standard-sized taxis in Tokyo's 23 wards and two adjacent cities. The fare went up by 14 percent to 500 yen, or about 3 dollars and 70 cents.
Officials say the increase is necessary for taxi operators to improve their services and working conditions for drivers.
Despite the change, two taxi operators, Royal Limousine and Japan Premium Tokyo, haven't raised their base rate, saying such a large hike could lead to fewer repeat customers.
They sought an injunction against possible punishments by the authorities, including having their business license revoked.
The court on February 28 ordered the government not to take any disciplinary action for the time being against operators that do not raise fares.
Kaneko Kensaku, the head of Royal Limousine, told reporters on Monday that the court order is significant because it points out the illegality of the government's designation for fares.
The transport ministry says it will study the court decision and after consulting with relevant bodies will decide on its response.