‘One-Time’ Tax on Used Vehicles cannot be levied by RTO from Second Owners: Gujarat HC [Read Judgment]

The Gujarat High Court has that the Regional Transport Office (RTO) cannot levy ‘One Time Tax‘ on used vehicles from second owners since the first owner of the said vehicle has already paid such tax.

The facts leading to this case happened in 2011 when one of the respondents, Satish Nikka had availed off loan facility from the HDFC Bank to purchase a motor vehicle. Since he could not repay instalments, so he surrendered the vehicle to the Bank. Later, the said vehicle was put to auction. The brother of writ-applicant, Bhavesh Dhola purchased the vehicle in the auction conducted by the Bank and applied to the RTO to have it registered in his brother Vijay Dhola’s name. At that point in time, one of the issues raised by the RTO authorities was regarding the liability of the applicant to once again pay the lifetime tax. The First Owner Satish Nikka had already paid the lifetime tax at the relevant point of time in accordance with the rules. As the RTO authorities declined to transfer the vehicle in the requested name and also insisted on payment of the lifetime tax once again, the writ-applicant was left with no other option, but to come before the Court with a writ petition.

The bench, consisting of Justice J B Pardiwala and Justice BD Karia, while allowing the Writ Petition held, “We are dealing with a matter as regards the levy of tax. Such a levy should be provided under the provisions of the Act or the Rules framed therein. We are of the view that the insistence on the part of the RTO-authorities in asking the writ-applicant to once again pay the one-time tax is not justified in law.”.