Point of Law: Section 12 of the Act, 1958 provides that any tax due and not paid as provided, be recoverable as an arrears of land revenue. Section 12 A of the said Act, puts restriction of use of motor vehicle to ply on the road, where the tax payable in respect of such motor vehicle remains unpaid. It is pertinent to note that Section 12B of the said Act empowers the authorities to seize and detain the vehicle until the tax, penalty and interest is paid. Therefore, even after recording of facts of transfer in the certificate of registration, the interest of State is not affected, so far arrears of tax is concerned, as the provisions of Bombay Motor Vehicle Tax Act, 1958, as referred to above, is comprehensive and authorities may take necessary action as provided under the Act.

JUDGMENT :

ILESH J. VORA, J.

1. We have heard Mr. Parth Bhatt, the learned counsel appearing for the writ applicant and Mr. Trupesh Kathiria, the learned AGP appearing for and on behalf of respondents - State.

2. By way of this petition under Article 226 of the Constitution of India, the writ applicant has prayed for an appropriate writ, order or direction to quash and set aside the communication dated 12.07.2019, by which the respondent Nos.3 and 4 – RTO authorities have refused to register the vehicles in question in the name of transferee - M/s. New Ruby Cargo Pvt. Ltd on the ground that there is an outstanding liability of tax penalty and interest on the said vehicles.

3. The facts in brief leading to present petition are as under:

3.1 The writ applicant is a Transporter and since 1998 he has been in the business of transport. The writ applicant is registered owner of 141 commercial trucks. Out of 141, the writ applicant intends to transfer the ownership of 39 trucks to his son, who is Director of M/s. New Ruby Cargo Pvt. Ltd. The writ applicant has submitted necessary prescribed forms within the time limits declaring the facts of transfer with necessary documents and also requested the authorities to record the transfer of ownership in the certificate of registration. The writ applicant has also requested the authorities to renew the permit and issuance of fitness of certificate and cancellation of hypothecation.

3.2 It is the case of the writ applicant that despite repeated reminders, the respondents have not acted upon the application as well as the forms submitted by him in recording of transfer of ownership in the certificate of registration. The respondent authorities have refused to record the facts of transfer of ownership on the ground that there is an outstanding liability of tax on the vehicles in question. The writ applicant has paid 50% amount of arrears of tax to show his bonafide and also gave an undertaking to pay the remaining amount of tax after recording of transfer of ownership, as due to slowdown in the business, he could not be in a position to pay the full amount of tax, interest and penalty. The respondent authorities vide communication dated 12.07.2019 informed the writ applicant that unless and until the arrears of tax will not honour, the recording of transfer of ownership as well as renewal of permit and fitness certificate cannot be processed.

3.3 In short, it is the case of the writ applicant that after transfer of 39 vehicles, the registering authority have refused to record the transfer of ownership in the certificate of registration on account of arrears of tax of the vehicles in question. Hence, present petition is filed seeking quashing and setting aside the communication dated 12.07.2019 and directing the respondent authorities to record the transfer of ownership of the vehicles in question in the certificate of registration and also issued the necessary fitness certificate, renewal of the permit and cancellation of hypothecation as per the decision of the authority dated 8.10.2020.

4. Mr. Parth Bhatt, the learned counsel appearing for the petitioner would submit that the authorities having no discretion to refuse to record the transfer of ownership in the certificate of registration on the ground that tax on the vehicles being not been paid by the registered owner. Referring to Section 50 of the Motor Vehicles Act, 1988 (for short, ‘the M.V. Act’) read with Rule 55 of the Central Motor Vehicle Rules, 1958 (for short, the M.V. Rules), he would submit that the provisions nowhere lays down that the registering authority can refuse to record the facts of transfer of ownership in the certificate of registration on account of arrears of tax on the vehicles. He would further submit that 50% of the tax amount has already been paid by writ applicant and also submitted an undertaking before the authority that he will pay the remaining amount after necessary entry made in the certificate of registration.