The top court said that if the vehicle is not used for a month or more after the payment of tax, the owner can apply for a refund under section 12 of the 1997 Act and all the parties to the demand for refund requirements have to be complied with. As mentioned in the provision.
The Supreme Court on Tuesday held that the financier of a transport vehicle, for which a lease or hypothecation agreement has been made, is liable to tax under the Uttar Pradesh Motor Vehicle Taxation Act 1997 from the date of taking possession of the vehicle. The top court refused to interfere with the December 2019 judgment of the Allahabad High Court, which held that the financier of the transport vehicle was liable to pay tax under the 1997 Act.
A bench of Justice MR Shah and Justice BV Nagarathna dismissed the appeal filed by the financier who granted the loan for the purchase of the vehicle against the High Court’s decision.
“In view of the above discussion and for the reasons stated above, it is held that a financier of a motor vehicle/transport vehicle in respect of which a hire-purchase or lease or hypothecation agreement has been entered into, is liable to tax from the said The date of taking possession of the said vehicle under the agreement,” the bench said in its judgment.
The top court said that if the vehicle is not used for a month or more after the payment of tax, the owner can apply for a refund under section 12 of the 1997 Act and all the parties to the demand for refund requirements have to be complied with. As mentioned in the provision.
“However, only in a case falling under sub-section (2) of section 12 and subject to the surrender of the necessary documents referred to in sub-section (2) of section 12, the liability to pay tax shall not be arise, otherwise the liability to pay tax by such owner/ operator shall continue,” it said.
The bench, in its judgment, noted that the financier had given a loan for the purchase of a transport vehicle and in default of payment of the loan, is in possession of the vehicle.
It is also noted that the counsel for the appellant has cited the relevant provisions of the 1997 Act and the Motor Vehicles Act, 1988 in support of his contention that being the financier of the vehicle, unless the vehicle is put to use or is actually being utilized, there shall be no liability on the financier to pay tax under the 1997 Act.
The counsel appearing for the state had told the top court that under the provisions of the 1997 Act, every “owner” and “operator” is liable to pay tax leviable under section 4.
The Bench referred to the relevant provisions of the 1997 Act to hold that a financier who is in possession of a transport vehicle on account of non-payment of loan, is an “owner” under the relevant provisions of the 1997 Act and also that the 1988 Act Act.
It states that section 4 of the 1997 Act is the “charging section” according to which no motor vehicle, other than a transport vehicle, shall be used in any public place in Uttar Pradesh unless a lump sum tax at the applicable rate is paid. is not done. in relation to him.
It said there is a requirement under the law to first pay advance tax under section 9 and then use the vehicle.
“In other words, it is ‘payment and utilization of tax’ and not ‘use and payment of tax’. Therefore, it is submitted on behalf of the appellant-financier that the tax should be paid at the time of utilization or after Accepted,” the bench said.
“If such submission is accepted, then in that case, section 9(1)(iv)(a), which provides for the amount of tax to be paid in advance, would be redundant and/or will become meaningless,” it said.
The bench said that in a case where, after paying the tax and not using the vehicle, the operator or owner may apply and claim the refund as per section 12 and get the refund subject to fulfilling all the requirements. can do.
“In these circumstances, the judgment and order passed by the Full Bench of the High Court does not warrant any intervention by this Court. The appeal is accordingly dismissed,” it said.
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