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2019 (12) TMI 1579 - HC - Indian LawsLevy of tax - Financier of a motor vehicle/transport vehicle in respect of which a hire-purchase, lease or hypothecation agreement has been entered - liability of tax from the date of taking possession of the said vehicle under the said agreements, even if its name is not entered in the Certificate of Registration or not? - HELD THAT:- As regards 'motor vehicles other than a transport vehicle' liability regarding arrears in respect thereof would be practically Nil as one time tax is paid. If a dispute regarding liability to pay arrears of tax etc. in respect of motor vehicles other than transport vehicles does arise it will have to be determined keeping in mind the enunciation of the law as aforesaid. The Financier on taking possession of the vehicle will be liable accordingly - It is not out of place at this stage to mention that when the registered owner (borrower) is in arrears of tax etc. then intimation of such arrears and the liability of the registered owner to pay such arrears of tax is sent not only to the registered owner but is also sent to the Financier under Rule 18(3) read with Form E-I of the Act, 1997, as quoted earlier, on his address, meaning thereby, the Financier can avoid such further liability by taking suitable action either for possession of the vehicle treating it to be a breach of agreement, if there is any such condition in the agreement or, they can avoid such liability by ensuring such conditions being incorporated in the agreements with the borrower. The fact that the name of the Financier, after taking possession of such vehicle, is not entered in the Certificate of Registration as the registered owner, is of no consequence in this regard, as, the provisions contained in Sub-section (3) of Section 9, Sub-section (3) of Section 20 and Section 2(g) and 2(h) do not contemplate any such requirement in the case of a vehicle, covered under the relevant agreements, already discussed hereinabove, which is in possession of the Financier under such agreement. All that is necessary is the possession of the motor vehicle. If it has been taken by the Financier under such agreement, he would be liable, of course, alongwith the operator, if any, jointly, and severally. Neither the provisions of Section 50 and 51 nor the corresponding Rules contained in Rule 61 regarding entry of name in the Certificate of Registration or issuance of fresh certificate to Financier have any relevance whatsoever so far as liability in such a scenario to pay tax, additional tax or penalty under Sub-Section 3 of Section 9 read with Section 20 of the Act, 1997 is concerned. If the action under Section 51(3) and/or (3) read with Rule 61(2) is held to be a necessary prerequisite for liability to tax etc. then it would render part of definition of 'Operator' and 'Owner' regarding possession meaningless and superfluous in this context, as, such eventuality would in any case be covered by the first part of Section 2(h) and second part of Section 2(g). The words 'Owner' and 'Operator' occurring in Section 9 and 20 have to be read in consonance with the definition clause contained in Section 2(g) and (h) as already discussed - the word used in Section 9(3) and 20 of the Act, 1997 is not 'registered owner' but 'Owner', therefore, for purposes of liability to tax etc., the Act, 1997, in view of Section 2(h) therein, envisages the onus not only on the 'registered owner' but also on the person in possession under the agreements referred earlier. The same analogy/principle applies to the liability of 'Operator' under Section 2(g). In the context of the questions referred to us the fact that the name of the Financier is not entered in the Certificate of Registration, is irrelevant. What is relevant is whether he has taken possession of the vehicle under the agreements referred earlier or not. The word used in Section 9(3) and 20 of the Act, 1997 is not 'registered owner' but 'Owner', therefore, for purposes of liability to tax etc., the Act, 1997, in view of Section 2(h) therein, envisages the onus not only on the 'registered owner' but also on the person in possession under the agreements referred earlier. The same analogy/principle applies to the liability of 'Operator' under Section 2(g). In the context of the questions referred to us the fact that the name of the Financier is not entered in the Certificate of Registration, is irrelevant. What is relevant is whether he has taken possession of the vehicle under the agreements referred earlier or not. Application disposed off.
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