The liability of the registered owner to pay motor vehicle tax is not absolved during the period when the vehicle is in possession and control of the financier.

R. V. RAVEENDRAN, J.

( 1 ) SRI. T. K. Vedamurthy, the learned Government Pleader, is directed to take notice for respondents 1 and 2.

( 2 ) PETITIONER claims to the registered owner of vehicle bearing registriation No. KA255656. The vehicle is hypothecated to the Karnataka State Financial Corporation (' KSFC' for short), the third respondent herein. As the petitioner committed default in paying the amounts due to the KSFC, the vehicle was seizeid by KSFC from the possession of the petitioner on 16-3-1996. Petitioner had paid to the motor vehicle tax in regard to the vehicle upto 31-3-1996. The motor vehicle tax for the period commencing from 1-4-1996 was not paid either by the petitioner or by the KSFC. The seizure of the v ehicle and non use of the vehicle as a consequence of such seizure, was not intimated to the first respondent either by the petitioner or by KSFC. It was only by a letter dated 21-5-1997, the KSFC informed the first respondent that the vehicle had been seized on 16-3-1996 and that the vehicle was still in its custody. Along with the said communication, KSFC sent an intimation of non use in Form No. 30 under Rule 34a of the Karnataka Motor Vehicles Taxation Rules, 1957 ('rules' for short ).

( 3 ) ON a report by the Inspector or motor vehicles about the seizure of the vehicle by KSFC, the first respondent sent a notice of demand dated 8-7-1996 (Annexure D) to KSFC in regard to the motor vehicle tax due for the period 1-4-1996 to 30-6-1996. This was followed by another notice dated 29-5-1997 to KSFC demanding Rs. 1,8 2,000/- as motor vehicle tax due from 1-4-1996 to 30-6-1997. In the meanwhile the petitioner took back possession of the vehicle from KSFC and is using it. As the tax for the period 1-4-1996 to 30-6-1997 remains unpaid, the first respondent sent a notice dated 9-12-1997 (Annexure F) to the petitioner claiming Rs. 1,82,000/- as M. V. tax for the period 1-4-1996 to 30-6-1997.

( 4 ) FEELING aggrieved, the petitioner filed an appeal before the second respondent. The second respondent allowed the Appeal by order dated Nil Annexure A) and remanded the matter to the first respondent for fresh disposal on the ground that first respondent had not initiatedi action for recovery of tax, against KSFC, in addition to the petitioner. The Appellate Authority has held that as no intimation of non use was sent as required under Section 16 (1) of the Karnataka Motor Vehicle Act, 1957 ('act' for short) read with notification dated 11-9-1980 and Rule 34a of the Rules, till 21-5-1997, both the petitioner and the KSFC are liable to pay the taxes for the period from 1-4-1996 to 30-6-1997 and the petitioner will have to pay the tax and then seek refund, if the vehicle is not in use under Section 7 of the Act. He held that the registered owner cannot escape liability to pay the tax having regard to Section 9 of the Act.

( 5 ) THE petitioner contends that the registered owner is not liable to pay the M. V. tax during the period when the venicle is seized and kept the financier and only the financier is liable to pay the M. V. Tax for such period and therefore the first respondent cannot demand the M. V. Tax from the petitioner for the period 1-4-1996 to 30-6-1997, when the vehicle was under the control and possession of KSFC. The petitioner also contends that instead of remanding the matter, the Appellate Authority ought to have allowed the Appeal by holding that petitioner was not liable and that the entire tax for the said period was payable by KSFC. He has therefore filed this petition for quashing the demand notice dated 9-12-1997 (Annexure F) and the appellate order dated Nil (Anneuxre L ).

( 6 ) THE question that arises for decision is whether the registered owner is liable to pay the M. V. Tax of the vehicle, for the period when it was in the possession of the financier in pursuance of seizure.

( 7 ) A brief reference to the relevant provisions of the Act is necessary to decide the question. 7. 1 Section 3 of the Act

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