Dismissed

The Manager v. Deputy Commissioner for Transport & Sr Regional

Karnataka HC14 Jun 2021CRL.P/9475/2018

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a criminal petition under Section 482 CrPC seeking quashing of proceedings against a bank for tax default on a repossessed vehicle. The Court held that under the Karnataka Motor Vehicles Taxation Act, both the registered owner and a person in possession are liable for tax.

What did the court decide?

Petition to quash criminal proceedings under Sections 12(1)(a) and (b) of the Karnataka Motor Vehicles Taxation Act was dismissed.

The Manager Vs Deputy Commissioner for Transport & Sr… — Cheque Dishonour | Karnataka HC (2021)

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Crl.P.No.9475/2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 14^TH DAY OF JUNE 2021

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S.MUDAGAL

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CRIMINAL PETITION No.9475/2018

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BETWEEN : THE MANAGER INDUS IND BANK NO.87, 2^ND FLOOR, BULL TEMPLE ROAD BASAVANAGUDI BENGALURU-19 REPTD. BY ITS AUTHORISED SIGNATORY MAHESH S. DUPUTY LEGAL … PETITIONER (BY SRI. NATARAJ G., ADVOCATE)

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AND :

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DEPUTY COMMISSIONER FOR TRANSPORT & SR. REGIONAL TRANSPORT OFFICER MANGALORE (D.K.) REPT. BY DCT & SR.RTO … RESPONDENT (BY SMT. NAMITHA MAHESH B.G., HCGP)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO QUASH THE CRIMINAL PROCEEDINGS IN C.C.NO.3802/2017 PENDING ON THE FILE OF JMFC-II, MANGALURU FOR THE OFFENCE P/U/S 3 AND 4 R/W 12(1)(a) AND (b) OF THE KARNATAKA MOTOR VEHICLES TAXATION ACT.

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Crl.P.No.9475/2018

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THIS CRIMINAL PETITION COMING ON FOR ORDERS THIS DAY, THROUGH VIDEO CONFERENCE THE COURT MADE THE FOLLOWING:

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O R D E R

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“Whether the proceedings in C.C.No.3802/2017 on the file of the JMFC II Court, Mangaluru against the petitioner amounts to abuse of the process of the Court?” is the question involved in this case.

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The petitioner is a Banking Company carrying on money lending business. The petitioner lent vehicle loan to one Shakuntala B for purchasing the commercial vehicle ‘210 Viking Passenger’ bearing registration No.KA-20-B-0124. Under the said money lending transaction, the petitioner entered into hypothecation agreement dated 13.02.2010 with the borrower.

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The borrower committed default in

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repayment of the loan. Therefore, as per the terms of the hypothecation agreement, the petitioner

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Crl.P.No.9475/2018

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repossessed the said vehicle on 07.01.2013 and sold the same to one Kurshid Ahmed in public auction.

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The respondent issued notice dated

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07.01.2014 calling upon the petitioner to pay the tax on the hypothecated vehicle. The petitioner replied that as per Annexure-D dated 17.03.2014 claiming that it was only a financier and the registered owner is liable to pay the tax. Thereafter, the respondent issued notice Annexure-E dated 27.07.2017 to the petitioner calling upon it to pay arrears of tax of Rs.27,04,714/- from 01.10.2010 to 30.09.2017 along with compounding charges failing which, it will be prosecuted.

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Since the fine was not paid, the respondent filed complaint before the J.M.F.C. II Court, Mangaluru seeking prosecution of the petitioner for the offences punishable under Section 12(1) (a) and (b) of the Karnataka Motor Vehicles, Act.

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Crl.P.No.9475/2018

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The petitioner seeks quashing of the said proceedings on the ground that only the registered owner of the vehicle was liable to pay tax, therefore, the impugned proceedings are abuse of the process of the Court.

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Section 3 of the Karnataka Motor Vehicles Taxation Act, 1957 (for short ‘the Act’) states that the tax at the rate specified in part-A of the schedule of the Act shall be levied on all the motor vehicles suitable for use on the roads except the one exempted under the said proviso. Admittedly, the vehicle in question is not covered under any of those exemptions.

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Section 4 of the Act deals with the liability

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of the person owning or possessing the vehicle which reads as follows:

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“4. Payment of tax.-(1) The tax levied under Section 3 shall be paid in advance by the registered owner or person having

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Crl.P.No.9475/2018

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possession or control of the motor vehicle, for a quarter, half-year or year, at his choice, within [fifteen days] from the commencement of such quarter, half-year or year, as the case may be:”

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9. Section 9 of the Act speaks of liability to

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pay arrears of tax which reads as follows:

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“9. Liability to pay arrears of tax.(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 having paid 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 to the [Taxation Authority.]

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(2) Nothing contained in this section shall be deemed to affect the liability of the person, who has transferred the ownership or has ceased

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Crl.P.No.9475/2018

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to be in possession or control of the vehicle, to pay the said tax.”

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Section 12(1) (a) and (b) are the penal

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clauses prescribing fine amount for commission of default in payment of arrears of tax. The sole contention of the petitioner is that under Sections 3, 4 and 9 of the Act only the registered owner of the vehicle is liable to pay the tax and not the financier, therefore, no prosecution lies against it. Petitioner does not dispute that it repossessed the vehicle and sold that.

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The reading of Sections 4 and 9 of the Act makes it clear that not only the registered owner of the vehicle but the person who was in possession of the vehicle is also liable to pay the tax. Therefore, the contention that only the registered owner was liable to pay the tax is untenable.

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The petitioner is liable to pay the tax for the period during which it was in possession of the

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Crl.P.No.9475/2018

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vehicle. Therefore, this Court does not find any error in the complaint or the Trial Court taking cognizance for the offence under Sections 12(1) (a) and (b) calling for quashing of the proceedings. Therefore, the petition is dismissed.

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Sd/JUDGE

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The Manager v. Deputy Commissioner for Transport & Sr Regional

Case brief

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The Manager v. Deputy Commissioner for Transport & Sr Regional

Case brief

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