Allahabad High Court
Citicorp Finance India Ltd. vs State Of U.P. And Others on 28 January, 2023
Bench: Suneet Kumar, Rajendra Kumar-Iv
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 42
Case :- WRIT - C No. - 68219 of 2009
Petitioner :- Citicorp Finance India Ltd.
Respondent :- State of U.P. and Others
Counsel for Petitioner :- Anubhav Chandra
Counsel for Respondent :- C.S.C.
Hon'ble Suneet Kumar,J.
Hon'ble Rajendra Kumar-IV,J.
Heard Shri Rahul Chaudhary holding brief of Shri Ankur Jaiswal, learned counsel for the petitioner, learned standing counsel appearing for the State and perused the record.
Petitioner is a company incorporated under the Companies Act having its office at Kanpur Nagar. Petitioner-company is engaged in the business of providing financial assistance to its customer for purchase of commercial vehicles.
By the instant writ petition, petitioners are challenging the order dated 03.12.2009, whereby, third respondent, Assistant Regional Transport Officer (Administration), Kanpur Nagar, has cancelled the trade certificate in respect of some of the vehicles financed by the petitioners. Petitioners, further, seek a direction to the State respondent to renew trade certificate and to register the vehicles financed by them.
Regulation 34 of the Central Motor Vehicles Rules, 1989, provides for application for grant and renewal of trade certificates and Regulation 35 further provides for grant and renewal of the trade certificates for carrying the business of vehicles as mentioned in Regulation 34(2) of the Central Motor Vehicles Rules, 1989. Regulation 37 of the Rules, further provides that the period of validity of the trade certificate would be 12 months from the date of its issuance and its applicability within the territory of India.
On an application made by the petitioner company, the second respondent, Regional Transport Officer, Kanpur Nagar, issued trade certificate which was renewed from time to time having Registration Number U.P. 78/TC No. 1796 of 2007. The aforesaid trade certificate was lastly renewed on 18.10.2008 with effect from 3.11.2008 upto 2.11.2009.
The coordinate Bench of this court vide a order dated 19.01.2010, stayed the effect and operation of the impugned order dated 03.12.2009, relying upon a decision rendered in State of Maharashtra and others vs. Sundaram Finance and others reported in (1999) 9 SCC 1. The order is reproduced:
"Supplementary affidavit filed today be kept on the record.
Learned Standing Counsel prays for and is allowed four weeks' further time to file counter affidavit.
Sri B.K. Srivastava, assisted by Sri Anubhav Chandra, appearing for the petitioner contends that petitioner is a financier who has been granted trade certificate, which is not being renewed on the ground that tax is due on two vehicles, which were financed by the petitioner. He submits that petitioner cannot be said to be operator nor the petitioner has any liability to pay road tax etc. He has placed reliance on a judgment of the Apex Court in the case of State of Maharashtra and others vs. Sundaram Finance and others reported in (1999)9 S.C.C. 1. The petitioner has made out a prima facie case of grant of interim relief.
Let a counter affidavit be filed as indicated above.
List thereafter for admission.
In the meantime operation of the order dated 3rd December, 2009 refusing renewal shall remain stayed. The petitioner may take steps for fresh registration of the vehicles, which have been financed by the petitioner and has been repossessed. It is further provided that petitioner's application for renewal of trade certificate shall be considered ignoring the order dated 3rd December, 2009."
Learned counsel for the petitioner submits that the issue with regard to liability of tax upon the registered owner vis.-a-vis. financier of motor vehicles has been considered by the Supreme Court in Mahindra and Mahindra Financial Services Ltd. vs. State of U.P. and Ors. (Civil Appeal No. 1217 of 2022) decided on 22.02.2022. It appears that the appellant, therein, had carried the Full Bench decision of this court rendered on 16.12.2019 (Writ Petition No. 4529 of 2018), wherein, it was held that the appellant as a financier in possession of the transport vehicle is liable to pay tax under the U.P. Motor Vehicles Taxation Act, 1997. In Mahindra and Mahindra (supra) the Supreme Court after considering the statutory provisions and the precedents held as follows:
"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, is liable to tax from the date of taking possession of the said vehicle under the said agreement. If, after the payment of tax, the vehicle is not used for a month or more, then such an owner may apply for refund under Section 12 of the Act, 1997 and has to comply with all the requirements for seeking the refund as mentioned in Section 12, and on fulfilling and/or complying with all the conditions mentioned in Section 12(1), he may get the refund to the extent provided in sub-section (1) of Section 12, as even under Section 12(1), the owner / operator shall not be entitled to the full refund but shall be entitled to the refund of an amount equal to one-third of the rate of quarterly tax or one twelfth of the yearly tax, as the case may be, payable in respect of such vehicle for each thirty days of such period for which such tax has been paid. However, only in a case, which falls under sub-section (2) of Section 12 and subject to surrender of the necessary documents as mentioned in sub-section (2) of Section 12, the liability to pay the tax shall not arise, otherwise the liability to pay the tax by such owner/operator shall continue."
Learned Standing Counsel on being confronted with the legal proposition submits that a fresh order shall be passed by the third respondent, Assistant Regional Transport Officer (Administration), Kanpur Nagar, in light of the decision rendered in Mahindra and Mahindra (supra).
In view thereof, on consent, writ petition is disposed of directing the third respondent, Assistant Regional Transport Officer (Administration), Kanpur Nagar to take a fresh decision on the representation in light of Mahindra and Mahindra (supra) with in a period of eight weeks from the date of filing of certified copy of this order alongwith the representation and copy of the writ petition.
It is clarified that the Court has not considered the claim of the petitioner on merits.
Order Date :- 28.1.2023
Mukesh Kr.
