ORDER :

1. Recovery citation dated July 3, 2022 issued against the petitioner, on account of motor vehicle tax, is under challenge in the present petition.

2. The argument raised by the learned counsel for the petitioner is that he had purchased three Tata Sumo Cars bearing registration Nos. UP 16AT 2265, UP 16AT 2266 and UP 16AT 2267. The same were hypothecated with M/s Magma Fincorp Limited. Being unable to pay EMI of loan, the petitioner surrendered the vehicles bearing registration nos.UP 16AT 2266 and UP 16AT 2267 on July 31, 2015 and bearing registration no. UP 16AT 2265 on August 12, 2015 with request to sale out the vehicles for recovery of the loan amount. Thereafter, the petitioner has moved application dated December 20, 2015 before the Regional Transport Officer, Gautam Buddh Nagar informing him about surrendering of the vehicles to the Finance Company. Petitioner has already paid tax in respect of the vehicles in question up to March 31, 2015. After possession of the vehicle was taken by the financer, the liability of the tax cannot be put on the petitioner as in that case the financer will be liable to pay the tax. In support of the argument reliance has been placed upon judgment of Hon'ble the Supreme Court in Mahindra and Mahindra Financial Services Ltd. vs. State of U.P. and others, (2022) 5 SCC 525.

3. Learned counsel for the State submitted that the issue will be examined in the light of judgment of Hon'ble the Supreme Court in Mahindra and Mahindra Financial Services' case (supra).

4. After hearing the learned counsel for the parties, we find merit in the submission made by learned counsel for the petitioner as he stated that possession of the vehicles in question was taken by the financer in August 2015 and in view of the judgment of Hon'ble the Supreme Court in Mahindra and Mahindra Financial Services' case (supra), the liability for payment of tax thereafter cannot be fastened on the petitioner. Relevant paragraph 12 of the aforesaid judgment is reproduced hereinbelow:

"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."

(emphasis supplied)

5. In view of aforesaid, the petitioner may file objection against the recovery citation dated July 3, 2022 in terms of Rule 18 of the Rules, mentioning that possession of the vehicles in question was taken by the financer in August 2015. In case, the petitioner files objection, the same be considered by the competent authority and from the date of possession of the vehicles was taken by the financer, the liability may be re-worked out in terms of judgment of Hon'ble the Supreme Court in Mahindra and Mahindra Financial Services' case (supra). However, for any period prior to that, if