High Court of KeralaSingle Judge2016-10-17Writ petition disposed of with directions to ex...

Sabu. K. Baby v. State of Kerala and Others (WP(C) No. 33047 of 2016)

Case / Petition Number:WP(C).No. 33047/2016 (E)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A.M. Shaffique
Judgment Date: 2016-10-17
Court Decision / Holding: Writ petition disposed of with directions: (i) The fifth respondent shall consider whether the amount can be recovered from the transferee of the vehicle or by attachment and sale of the vehicle; (ii) The fifth respondent shall consider whether the claim is genuine and, if so, what steps should be taken, with orders to be passed within one month from receipt of a copy of the judgment; (iii) Until such time, any recovery steps shall remain in abeyance.
Final Disposition: Writ petition disposed of with directions to examine recovery against transferee and other steps; stay on recovery pending adjudication by fifth respondent within one month.

Parties to the Case

Appellants / Petitioners

Sabu. K. Baby

Respondents

State of Kerala represented by the Secretary, Department of Revenue, Secretariat, Thiruvananthapuram
The District Collector, Kasaragod, Kasaragod District
The Tahsildar, Vellarikundu Taluk, Hosdurg, Kanhangad P.O., Kasaragod District
The Village Officer, Chittarikkal Village, Chittarikkal P.O., Vellarikundu Taluk, Kasaragod District
Joint Regional Transport Officer, Sub Regional Transport Office, Kanhangad, Kanhangad P.O., Kasaragod District
Rineesh Kumar N., S/O Krishnan, Kandampeth House, Pattannur P.O., Kasaragod District

Legal Representation & Advocates

Counsels for Petitioners

• Sri K. S. Babu
• Smt. N. Sudha
• Sri A. S. Thomas Smith
• Sri Babu Shankar

Counsels for Respondents

• Sri V. K. Shamsudheen

Case Synopsis & Summary

Petitioner Sabu K. Baby challenges revenue recovery proceedings for arrears of motor vehicle tax in respect of vehicle KL-01-AK-3585. He contends that he had sold the vehicle to Rineesh Kumar in October 2012, who subsequently availed a loan from Cholamandalam Finance and hypothecated the vehicle; after sale, the petitioner argues, he cannot be liable for motor vehicle tax. He filed notices and representations before the Respondents claiming non-liability and citing the transfer of possession under a sale, though registration change was not mandated. The Respondents maintained that under the Motor Vehicle Taxation Act, there is a primary obligation on the registered owner to pay tax, and liability can shift to the transferee if ownership or possession has passed, with Sub-section 9(2) clarifying that those who transferred ownership are not fully exempt. The court acknowledges the statutory framework, noting Sections 4(1) and 9 of the MVTA, and discusses Sumathy v. Raghavan as having relied on provisions under the Motor Vehicles Act, which the court distinguishes as inapplicable to the present act. It also cites Vibhuraj v. Joseph to support the liability framework. Ultimately, the writ petition is disposed of with directions to the fifth respondent to examine whether recovery can be sought from the transferee or through attachment, and to pass appropriate orders within one month, keeping recovery in abeyance pending those steps.

Provisions of Law Cited

Motor Vehicle Taxation Act, Section 9(1)Motor Vehicle Taxation Act, Section 9(2)Motor Vehicle Taxation Act, Section 4(1)Revenue Recovery Act, Section 7

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that after his sale of the vehicle and transfer of possession to the buyer (Rineesh Kumar), the tax liability should shift away from him. He relies on the Sale of Goods Act and the transfer of possession as a basis for non-liability, pointing to Ext.P3, Ext.P9, Ext.P15 and other exhibits to show no ongoing obligation. He argues that the statutory framework under the Motor Vehicle Taxation Act does not compel him to pay after transfer of possession and registry is not mandatory for transfer of title.

Contentions of Respondents

The State and authorities contend that MVTA imposes a primary obligation on the registered owner to pay tax, with liability potentially shifting to the transferee upon transfer of ownership or possession under Section 9(1). Sub-section 9(2) preserves liability of the person who transferred ownership or ceased possession. The Act requires payment in advance by the registered owner under Section 4(1). The District Collector’s assessment and the possibility of recovery from the transferee or via attachment might be warranted; the fifth respondent should examine the practicality and genuineness of the petitioner's claim and pass appropriate orders.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Sumathy v. Raghavan	1996 (2) KLT 1018	Distinguished	The judgment references Sumathy to contrast with current MVTA framework, noting it was decided under the Motor Vehicles Act and is not applicable to the present case.
Vibhuraj v. Joseph	2007 (1) KLT 853	Positive	The court acknowledges this earlier decision as supporting the liability framework under MVTA, aligning with the position that the registered owner has primary tax liability and may extend to transferees.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **MONDAY, THE 17TH DAY OF OCTOBER 2016/25TH ASWINA, 1938** ## **WP(C).No. 33047 of 2016 (E)** **----------------------------** **PETITIONER : -----------------------** **SABU. K. BABY, AGED 48 YEARS, S/O BABY, KORATTIYIL HOUSE, KADUMENI, KADUMENI P.O., CHITTARIKKAL VILLAGE, VELLARIKUNDU TALUK, KASARAGOD DISTRICT, PIN:670 511.** **BY ADVS.SRI.K.S.BABU SMT.N.SUDHA SRI.A.S.THOMAS SMITH SRI.BABU SHANKAR** **RESPONDENT(S):** **----------------------------** **1. STATE OF KERALA, REPRESENTED BY THE SECRETARY,** **DEPARTMENT OF REVENUE, SECRETARIAT, THIRUVANANTHAPURAM. IN-695 001** **2. THE DISTRICT COLLECTOR, KASARGOD, KASARAGOD DISTRICT,** **VIDYANAGAR P.O., KASARAGOD DISTRICT, PIN:671 123.** **3. THE TAHSILDAR, VELLARIKUNDU TALUK, HOSDURG,** **KANHANGAD P.O., KASARAGOD DISTRICT, PIN:671 315.** **4. VILLAGE OFFICER, CHITTARIKKAL VILLAGE, CHITTARIKKAL P.O, VELLARIKUNDU TALUK,** **KASARAGOD DISTRICT, PIN:671 326.** **5. JOINT REGIONAL TRANSPORT OFFICER, SUB REGIONAL TRANSPORT OFFICE, KANHANGAD, KANHANGAD P.O., PIN:671 315 HOSDURG TALUK, KASARAGOD DISTRICT.** **2/-** **-2-** ## **WP(C).NO.33047/2016** **6. RINEESH KUMAR N., S/O KRISHNAN, KANDAMPETH HOUSE, PATTANNUR P.O., PIN CODE:670 595, KOVOOR DESOM, PATTANNUR AMSOM, THALASSERY TALUK.** ## **R1 TO R5 BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **WP(C).No. 33047 of 2016 (E)** ## **------------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS ----------------------------------------** **EXHIBIT P1: TRUE PHOTOSTAT COPY OF THE SALE AGREEMENT DATED 25.10.2012 WITH REGARD TO THE SALE OF 2005 MODEL EICHER MINI BUS HAVING REGISTRATION NO.KL-01-AK-3585 ENTERED BETWEEN THE PETITIONER AND MR.RINEESH KUMAR.** **EXHIBIT P1(A): THE TRUE COPY OF THE ENDORSEMENT ON REVERSE SIDE OF PAGE 1 OF EXHIBIT P1 REGARDING HANDING OVER OF POSSESSION OF THE VEHICLE TO RINEESH KUMAR.** - **EXHIBIT P2: TRUE PHOTOSTAT COPY OF THE MEMO DATED 25.4.2015 ISSUED BY THE JOINT REGIONAL TRANSPORT OFFICER, SUB REGIONAL TRANSPORT OFFICER, KANHANGAD.** - **EXHIBIT P3: TRUE PHOTOSTAT COPY OF THE LAWYER NOTICE DATED 8.6.2015 ISSUED BY THE COUNSEL FOR THE PETITIONER TO THE 5TH RESPONDENT.** - **EXHIBIT P4: TRUE PHOTOSTAT COPY OF THE LAWYER NOTICE DATED 8.6.2015 ISSUED BY THE COUNSEL FOR THE PETITIONER TO RINEESH KUMAR N.** - **EXHIBIT P5: TRUE PHOTOSTAT COPY OF THE LAWYER NOTICE DATED 8.6.2015 ISSUED BY THE COUNSEL FOR THE PETITIONER TO M/S. CHOLAMANDALAM FINANCE COMPANY LTD., KANNUR.** - **EXHIBIT P6: TRUE PHOTOSTAT COPY REPLY LAWYER NOTICE DATED 23.6.2015 ISSUED BY THE COUNSEL OF THE RINEESH KUMAR N.** - **EXHIBIT P7: TRUE PHOTOSTAT COPY REPLY NOTICE DATED 22.6.2015 ISSUED ON BEHALF OF M/S. CHOLAMANDALAM FINANCE COMPANY LTD.** - **EXHIBIT P8: TRUE PHOTOSTAT COPY OF THE APPLICATION DATED 9.10.2015 SUBMITTED BY THE PETITIONER BEFORE THE 5TH RESPONDENT AFTER THE RECEIPT OF EXHIBIT P2, NOTICE** - **EXHIBIT P9: TRUE PHOTOSTAT COPY OF THE NOTICE NO.C2/1562/KHD/2015 DATED 16.10.2015 ISSUED BY THE 5TH RESPONDENT TO THE PETITIONER.** - **EXHIBIT P10: TRUE PHOTOSTAT COPY OF THE APPLICATION DATED 4.11.2015 SUBMITTED BY THE PETITIONER BEFORE THE 5TH RESPONDENT.** - **EXHIBIT P11: TRUE COPY OF THE F.I.R IN CRIME NO.69/2016 OF CHITTARIKKAL POLICE STATION.** **2/-** **-2-** ## **WP(C).NO.33047/2016** - **EXHIBIT P12: PHOTOSTAT COPY OF THE LAWYER NOTICE DATED 24.2.2015 ISSUED BY ADV.N.ANANDAN, CHENNAI ON BEHALF OF M/S. CHOLAMANGALAM FINANCE COMPANY LTD. TO MR. SHANOOP K.M, SHIJESH M.P. AND USHA P.** - **EXHIBIT P13: TRUE PHOTOSTAT COPY OF THE DEMAND NOTICE DATED 13.1.2016 UNDER SECTION 7 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.** - **EXHIBIT P14: TRUE PHOTOSTAT COPY OF THE APPEAL DATED 14.3.2016 FILED ON 16.3.2016 BEFORE THE 2ND RESPONDENT BY THE PETITIONER.** - **EXHIBIT P15; TRUE PHOTOSTAT COPY OF THE PROCEEDINGS OF THE DISTRICT COLLECTOR KASARAGOD DATED 15.7.2016.** **RESPONDENT(S)' EXHIBITS: NIL** **--------------------------------------------** ## **/TRUE COPY/** **P.A.TO JUDGE** **sts** ## **A.M. SHAFFIQUE, J.** **-------------------------------------** W.P.(C) No. 33047 of 2016 -------------------------------------Dated this the 17[th] day of October, 2016 ## **JUDGMENT** Petitioner challenges the revenue recovery proceedings taken against the petitioner for arrears of motor vehicle tax in respect of vehicle KL-01-AK-3585. Earlier when demand had been made as per Ext.P2 memo dated 25.4.2015, claiming tax from 1.1.2013 to 30.6.2015, petitioner approached the Regional Transport Officer by filing Ext.P3 letter dated 8.6.2015 _inter alia_ contending that he had already transferred the vehicle on the basis of an agreement dated 25.10.2012 to one Rineesh Kumar, who later on availed of a loan from Cholamandalam Finance Company at Kannur by hypothecation of the said vehicle. It was therefore contended that after the date of sale, the petitioner has no obligation to pay motor vehicle tax. It seems that the petitioner had taken up the matter before the purchaser also. In the meantime, notice had been issued by the Joint Regional Transport Officer as per W.P.(C) No. 33047 of 2016 -2- Ext.P9 dated 16.10.2015, calling upon the parties for a hearing on 27.10.2015. According to the petitioner, he appeared and there was no appearance on the side of the purchaser of the vehicle. A crime is also registered against the purchaser of the vehicle, but without any result. In the meantime, the petitioner was served with Ext.P13 notice dated 13.1.2016 under Section 7 of the Kerala Revenue Recovery Act, calling upon the petitioner to pay an amount of 2,50,060/- with interest and₹ other charges. Petitioner filed a complaint to the District Collector, who passed Ext.P15 order _inter alia_ observing that being the owner of the vehicle, the petitioner is also liable to pay the amount. Learned counsel for the petitioner however relies upon the judgment of this Court in **Sumathy v. Raghavan [1996 (2) KLT 1018],** wherein it was held that the transfer of sale of vehicle is completed as per the Sale of Goods Act on transfer of possession, for which, the change of registration is not mandatory. But reference to the above judgment (Sumathy's case) would show that the said W.P.(C) No. 33047 of 2016 -3- judgment had been passed with reference to the statutory provisions under the Motor Vehicles Act, which can have no application to the present case. Section 9 of the Motor Vehicle Taxation Act, which reads as under: “ **9. Liability to payment of tax by persons succeeding to the ownership, possession or control of motor vehicles** .- (1) If the tax leviable in respect of any motor vehicle remains unpaid by any person liable for the payment thereof and such person before payment of the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle shall be liable to pay the said tax. (2) Nothing contained in sub-section (1) shall be deemed to affect the liability to pay the said tax of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle.” 2. No doubt, when possession of the vehicle is transferred or a person who is the owner of the vehicle has ceased to be in possession or control of the vehicle, in terms of Section 9(1), the person to whom the ownership of the vehicle W.P.(C) No. 33047 of 2016 -4- has been transferred or the person who has possession or control of said vehicle shall be liable to pay the said tax. However, sub-section (2) clearly indicates that nothing contained in sub-section (1) shall be deemed to affect the liability to pay the said tax by the person who has transferred the ownership or has ceased to be in possession or control of such vehicle. In fact, as per the Motor Vehicle Taxation Act, there is a primary obligation on the part of the registered owner to pay tax. Section 4 (1) reads as under: “4. Payment of tax and issue of licence.- (1) The tax levied under sub-section (1) of Section 3 shall be paid in advance within such period and in such manner as may be prescribed, by the registered owner or person having possession or control of the motor vehicle, for a quarter or year, at his choice, upon a quarterly or annual licence to be taken out by him” 3. Therefore, when a clear procedure is prescribed under the Motor Vehicle Taxation Act, the general Law under the Sale of Goods Act will not save the petitioner from the liability to pay the motor vehicle tax. In other words, if the tax W.P.(C) No. 33047 of 2016 -5- cannot be recovered from the person in possession after the alleged transfer, the petitioner will become liable to pay the amount. The position of law has already been held by this Court in **Vibhuraj v. Joseph [2007 (1) KLT 853]** . In the light of the above factual situation, I am of the view that there is nothing wrong in the District Collector forming an opinion that the petitioner is also liable to pay the amount and therefore, Ext.P15 cannot be challenged on the said ground. 4. However, whether the tax can be recovered by taking appropriate steps against the transferee of the vehicle as the case may be, is a matter to be considered by the fifth respondent. Petitioner had already filed complaints before the fifth respondent intimating the alleged transfer and the fifth respondent having conducted an enquiry, according to the petitioner, has not passed any order. Taking into consideration the aforesaid factual situation, this writ petition is disposed of as under: (i) That the fifth respondent shall consider whether the W.P.(C) No. 33047 of 2016 -6- amount of tax could be recovered now claimed to be recovered from the transferee of the vehicle and even by attachment and sale of the vehicle as such. (ii) The fifth respondent shall also consider whether the claim of the petitioner is genuine and if so, what further steps should be taken in the matter and appropriate order may be passed in this regard within a period of one month from the date of receipt of a copy of this judgment. (iii) Until such time, the recovery steps, if any, shall be kept in abeyance. **Sd/A.M. SHAFFIQUE JUDGE** Scl/17.10.2016