Tax Department has to prove Vehicle is found plying to levy Tax liability: Allahabad High Court quashes Order imposing Motor Vehicles Tax [Read Judgment]

The Allahabad High Court while quashing the order imposing motor vehicles tax held that a burden is cast upon the Taxation Officer to charge the tax and the additional tax only on being convinced that the vehicle is found plying as no tax can be levied in terms of Section 12(2) of the Motor Vehicles Taxation Act.

The petitioner, Shiv Dayal Singh was the owner of a Bus Vehicle manufactured in the year 1992 and was plying the vehicle for commercial purposes. The vehicle was rendered unfit after plying for more than 15 years as no fitness certificate was granted to the petitioner after April 13, 2009 in respect of the vehicle in question.

The fitness certificate was not granted and the petitioner surrendered all the documents i.e registration certificate and Permit Certificate of the said Vehicle after completing all the requisite formalities and the same was accepted by the concerned authority by an order.

The petitioner sold the vehicle in question to the scrap dealer and necessary application alongwith sale letter was duly submitted before the authority concerned for cancellation of the registration of the vehicle in question.

The counsel for the petitioner, Sandeep Kumar contended that despite the petitioner having moved an application for cancellation of the registration along with evidence of the vehicle being sold to the scrap dealer, the petitioner was served with a demand of Rs. 1,59,620/- towards tax dues for the vehicle in question.

The contention of Mr. Kumar is that the orders passed for recovery of additional tax are wholly arbitrary and illegal and prays that the same are liable to be set aside.

The single judge bench of Justice Pankaj Bhatia held that the petitioner was entitled for consideration of his case under Rule 22-A in view of the pleading by him before the Taxation Officer as well as the Appellate Authority to the effect that the vehicle had become non-existent which exercise has not been done in the present case.

The court in order to avoid any further delays, directed the petitioner to appear before the Taxation Officer along with the relevant documents in support of his contention of the vehicle having become non-existent and the Taxation Officer after conducting such enquiry as he may deem fit, shall pass fresh orders taking into account the benefit to which the petitioner is entitled under Rule 22-A of the Motor Vehicles Taxation Rules, as expeditiously as possible.