TMI Blog2022 (2) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... notified by the State Government is paid in respect thereof. As per Section 9(1)(iv)(a), the tax payable under sub-section (2-A) of Section 4 shall be payable in advance on or before fifteenth day of each month next following. Therefore, the requirement under law is to first pay the tax in advance as provided under Section 9 and thereafter to use the vehicle. In other words, it is pay the tax and use and not use and pay the tax . Therefore, the submission on behalf of the appellant-financier that tax has to be paid at the time of use or thereafter cannot be accepted. The owner or operator has to first pay the tax in advance and thereafter if the transport vehicle is not used for a continuous period of one month or more since the tax was last paid, he may have to apply for the refund, which may be granted subject to compliance of the necessary requirements as per first proviso to Section 12 and subject to satisfaction of the Taxation Officer that the transport vehicle has not been used for a continuous period of one month or more since the tax was last paid. The submission on behalf of the petitioner is that many a time, the documents referred to in sub-section (2) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as the Act, 1997 ) on such financier-in-possession of the vehicle. Before the High Court, the following question was referred to the Full Bench:- 1. Whether in view of Sections 2(g), 2(h), 4, 9, 10, 12, 13, 14 and 20 of the Act, 1997 read with Sections 39, 50 and 51 of the Act, 1988 and other relevant provisions of the said enactments and the Rules of 1998 and 1989, a Financier of a motor vehicle/ transport vehicle in respect of which a hire-purchase, lease or hypothecation agreement has been entered, is liable to 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? If not, who is liable in this regard? 2.1 By the impugned judgment and order, the High Court has held against the appellant financier and has held that the appellant being in possession of the vehicle as a financier is liable to pay tax under the Act, 1997. 2.2 Feeling aggrieved and dissatisfied with the impugned judgment and order holding that the appellant as a financier-in-possession of the transport vehicle in question is liable to pay the tax under the Act, 1997, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod and the same is not actually run for that period then the refund may be sought and granted in appropriate case. It is submitted that even for the purpose of refund also, as the financier, who will not be in possession of a token or permit or the registration certificate will not be in a position to even pray for refund. 4.4 It is vehemently submitted by learned counsel appearing on behalf of the appellant that as the original certificate of registration and the permit would be with the registered owner, the appellant-financier cannot use the transport vehicle in the absence of having any permit and/or certificate of registration. Therefore, there cannot be any liability on the financier to pay the tax imposed under the Act, 1997. 4.5 Making the above submissions and relying upon a decision of this Court in the case of State of Maharashtra and Ors. Vs. Sundaram Finance and Ors., (1999) 9 SCC 1, it is prayed to allow the present appeal and to hold that the appellant being a financier-in-possession of the transport vehicle is not liable to pay any tax under the Act, 1997 unless it is put to use. 5. Ms. Garima Prasad, learned Senior Advocate appearing on behalf of the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED in any public place in Uttar Pradesh unless a monthly tax at such rate as may be notified by the State Government is paid in respect thereof. As per the proviso, instead of monthly tax, a quarterly or a yearly tax may be payable at such rate as may be notified by the State Government. It is submitted that as per Section 9(1)(iv)(a) the tax payable under sub-section (2-A) of Section 4 shall be payable in advance for one calendar month at the time of registration of the vehicle under the Act, 1988 and thereafter on or before the fifteenth day of each calendar month next following. It is submitted that such a tax is required to be paid in advance and hence the liability to pay the tax is first and then only can the vehicle be used. Therefore, the financier-inpossession of the transport vehicle being an owner , as defined under the Act, 1997, is liable to first pay the tax. That in case, after the payment of tax, the vehicle is not used, then, after following the procedure and subject to compliance of Section 12, such a financier/owner can claim refund of the tax paid. That the question of refund on non-use will arise only in a case where the tax is first paid. It is submitted ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of a motor vehicle means the person whose name is entered in the certificate of registration issued in respect of such vehicle, and where such vehicle is the subject of an agreement of hire purchase or lease or hypothecation, the person in possession of the vehicle under that agreement and where any such person is a minor, the guardian of such minor; 4. Imposition of tax.- (1) Save as otherwise provided in this Act or the rules made thereunder, no motor vehicle other than a transport vehicle, shall be used in any public place in Uttar Pradesh unless a one-time tax at the rate applicable in respect of such motor vehicle, as may be specified by the State Government by Notification in the Gazette has been paid in respect thereof: Provided that in respect of an old motor vehicle instead of a one time tax, annual tax applicable to such motor vehicle as may be specified by the State Government by Notification in the Gazette may be paid. (1-A) Save as otherwise provided in this Act or the rules made thereunder no three wheeler motor cab and goods carnage having gross vehicle weight not exceeding 3000 kilograms, shall be used in any public place in Uttar Pradesh unless yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms and conditions of such agreement: Provided that the tax so levied shall not exceed the tax which would otherwise been levied under the Act. (3) Where any motor vehicle other than a transport vehicle is found plying as a transport vehicle, such tax therefore as may be notified by the State Government, shall be payable. (4) The State Government may, by notification, increase by not more than fifty percent, the rates of tax, specified in Part 'B', Part 'C' or Part 'D' of the First Schedule. 9. Payment of tax and penalty-(1) Subject to the provisions of Section 11- (i) the tax payable under sub-section (1) of section 4 shall be paid at the time of the registration of the vehicle under the Motor Vehicles Act, 1988: Provided that in respect of an old motor vehicle, the tax shall be payable in advance on or before the fifteenth day of January in each year; (ii) the tax payable under sub-section (1-A) of Section 4, shall be payable in advance for one year at the time of the registration of the vehicle under the Motor Vehicles Act, 1988 and thereafter on or before be fifteenth day of the first calendar month of the each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Uttar Pradesh unless there has been paid in respect thereof a tax under Section 4 for its use or stay in Uttar Pradesh. (b) under a national permit granted under subsection (12) of Section 88 of the said Act by an authority having jurisdiction outside Uttar Pradesh unless there has been paid in respect thereof a tax under Section 4 calculated at the rate specified by the State Government by Notification in the Gazette in the manner prescribed. (c) under a permit granted under sub-section (9) of Section 88 of the said Act read with the Motor Vehicles (An India Permit for Tourist Transport Operators) Rules, 1993 by an authority having jurisdiction outside Uttar Pradesh unless there has been paid in respect thereof a tax under Section 4 at the rate specified by the State government by notification in the Gazette in the manner prescribed: Provided that the State Government may, by notification, increase by not more than fifty per cent, the rates of tax or additional tax, as the case may be, specified in the said Schedules. (2) For the purpose of levy and payment of tax under sub-clause (i) of clause (a) of sub-section (1), the tax payable for any two weeks o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermit, if any, to the Taxation Officer of the region where the tax or additional tax was last paid and on such surrender, no tax or additional tax under this Act shall be payable in respect of such vehicle for each complete calendar month of the period during which the vehicle remains withdrawn from use and the aforesaid documents remain surrendered with the Taxation Officer: Provided that in case such vehicle is found plying during the period when its documents as mentioned in this sub-section remain surrendered with the Taxation Officer, such owner or operator, as the case may be, shall be liable to the tax and the additional tax as if the documents were not surrendered and shall also be liable to the penalty equivalent to five times of the tax and additional tax. (3) Where the owner of a motor vehicle in respect whereof one-time tax has been paid under this Act proves to the satisfaction of the Taxation Officer in prescribed manner that such motor vehicle has not been used for a continuous period of one month or more, he shall be entitled to a refund of such tax as may be specified by the State Government by notification in the Gazette for the said period: Prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owner of a motor vehicle is unable to use his motor vehicle due to an accident of the said vehicle and the certificate of registration, the token, if any, issued in respect of the said vehicle and the permit, if any are surrendered to the Taxation Officer within a week from the date of such accident together with a copy of the first information report, such surrender shall be deemed to have been made on the date of the accident. 20. Recovery of tax-(1) Arrears of any tax or additional tax or penalty payable under this Act shall be recoverable as arrears of land revenue. (2) The tax, the additional tax and penalty payable under this Act shall be first charge on the motor vehicle including its accessories, in respect whereof it is due. (3) The Taxation Officer shall raise a demand in the form as may be prescribed, from the owner or operator, as the case may be, for the arrears of tax and additional tax and penalty of each year, which shall also include the arrears of tax, additional tax or penalty, if any, of preceding years. 8.1 Section 2(30) the Motor Vehicles Act defines owner , which reads as under:- (30) owner means a person in whose name a motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered owner has entered into the said agreement, satisfies the registering authority that he has taken possession of the vehicle from the registered owner owing to the default of the registered owner under the provisions of the said agreement and that the registered owner refuses to deliver the certificate of registration or has absconded, such authority may, after giving the registered owner an opportunity to make such representation as he may wish to make (by sending to him a notice by registered post acknowledgement due at his address entered in the certificate of registration) and notwithstanding that the certificate of registration is not produced before it, cancel the certificate and issue a fresh certificate of registration in the name of the person with whom the registered owner has entered into the said agreement: Provided that a fresh certificate of registration shall not be issued in respect of a motor vehicle, unless such person pays the prescribed fee: Provided further that a fresh certificate of registration issued in respect of a motor vehicle, other than a transport vehicle, shall be valid only for the remaining period for which the certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of a motor vehicle, does not intend to use his vehicle for a period of one month or more he shall, before the date the tax or additional tax, as the case may be is due, surrender the certificate of registration, the token, if any, issued in respect of the motor vehicle and the permit, if any, to the Taxation Officer of the region where the tax or additional tax was last paid and on such surrender, no tax or additional tax under Act, 1997 shall be payable in respect of such vehicle for each complete calendar month of the period during which the vehicle remains withdrawn from use and the aforesaid documents remain surrendered with the Taxation Officer. As per proviso to sub-section (2) of Section 12 in case such vehicle is found plying during the period when its documents as mentioned in sub-section (2) of Section 12 remain surrendered with the Taxation Officer, such owner or operator, as the case may be, shall be liable to tax and additional tax as if the documents were not surrendered and shall also be liable to penalty equivalent to five times of the tax and additional tax. 9. On a conjoint reading of the aforesaid provisions, it can be seen that in respect of a transport veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly one eventuality where no tax or advance tax under the Act, 1997 shall be payable namely under sub-section (2) of Section 12, where the operator or, as the case may be, the owner of a motor vehicle, does not intend to use his vehicle for a period of one month or more, he shall, before the date the tax or additional tax, as the case may be, is due, surrender the certificate of registration, the token, if any, issued in respect of the motor vehicle and the permit, if any, to the Taxation Officer of the region where the tax or additional tax was last paid and only on such surrender, no tax or additional tax under Act, 1997 shall be payable in respect of such vehicle for each completed calendar month of the period during which the vehicle remains withdrawn from use and the aforesaid documents remain surrendered with the Taxation Officer. 11. The submission on behalf of the petitioner is that many a time, the documents referred to in sub-section (2) of Section 12 are not with the financier/owner and they remain with the registered owner and therefore such a financier/owner may not be able to get the refund under subsection (1) of Section 12 or exemption from payment of tax as per s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax, the vehicle is not used for a month or more, then such an owner may apply for refund under Section 12 of the Act, 1997 and has to comply with all the requirements for seeking the refund as mentioned in Section 12, and on fulfilling and/or complying with all the conditions mentioned in Section 12(1), he may get the refund to the extent provided in sub-section (1) of Section 12, as even under Section 12(1), the owner / operator shall not be entitled to the full refund but shall be entitled to the refund of an amount equal to one-third of the rate of quarterly tax or one twelfth of the yearly tax, as the case may be, payable in respect of such vehicle for each thirty days of such period for which such tax has been paid. However, only in a case, which falls under sub-section (2) of Section 12 and subject to surrender of the necessary documents as mentioned in sub-section (2) of Section 12, the liability to pay the tax shall not arise, otherwise the liability to pay the tax by such owner/operator shall continue. Under the circumstances, the impugned judgment and order passed by the Full Bench of the High Court does not warrant any interference by this Court. The appeal stands ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
