The registered owner’s tax liability ceases upon possession of the vehicle by the financier, who assumes liability thereafter.

JUDGMENT

The 1^st petitioner is a company engaged in the business of providing financial assistance to purchase vehicles. The 2^nd petitioner is a registered owner of two goods carriage vehicles bearing Registration No.KL-63-9441 and Registration No.KL-40B-9355, which were purchased by the said petitioner by availing credit facility from the 1^st petitioner.

2. The challenge raised in this writ petition is against Exts.P7 and P8 demand notices issued by the 1^st respondent and Exts.P9 and P10 notices issued by the 2^nd respondent, for recovering the motor vehicle tax arrears in respect of the said vehicles, from the 2^nd petitioner, the registered owner. The challenge is raised, mainly on the ground that, as far as the said vehicles are concerned, the same were taken possession by the 1^st petitioner owing to the default on the part of the 2^nd petitioner in making the payment of monthly installments towards the credit facilities and later sold to third parties. To be precise, the vehicle bearing Registration No.KL-40B-9355 was taken possession by the 1^st petitioner on 29.11.2022, whereas, the vehicle bearing Registration No.KL-63-9441 was surrendered at the office of the 1st petitioner on 22.12.2022. Thereafter, the vehicle bearing Registration No.KL-63-9441 was sold by the 1^st petitioner on 16.05.2023 to a third party and the vehicle bearing Registration No.KL-40B-9355 was also sold on the same day to another party. According to the petitioners, as the vehicles were sold to third parties, the recovery proceedings cannot be initiated against the petitioners. It was in these circumstances this writ petition is submitted.

3. I have heard Sri.Binoy Vasudevan, learned Counsel for the petitioners and learned Government Pleader for the respondents.

4. As far as the issue raised by the petitioners is concerned, the legal position is already settled by this Court in Rubeesh Shamsudheen v. Joint Regional Transport Officer [2025 (4) KLT 910] , wherein, this Court held that, in cases where, the financier of the vehicles has taken possession of the vehicle, the liability of the registered owner shall be only up to the date of such taking possession and thereafter the person in possession of the vehicle shall be held responsible for the period after taking possession. In this case, it is discernible that, the vehicles were surrendered by the 2^nd petitioner and the 1^st petitioner had taken possession of the said vehicles on 29.11.2022 and 22.12.2022 . The said vehicles were sold by the 1^st petitioner on 16.05.2023 to third parties. Therefore, going by the Section 3 read with Section 9 of the Kerala Motor Vehicles Taxation Act , and also in the light of the principles laid down by this Court in Rubeesh Shamsudheen (supra), up to the date of surrender of the vehicles, the liability to pay the tax in respect of the said vehicles shall be upon the 2^nd petitioner and thereafter, the liability shall be upon the 1^st petitioner. It is to be noted in this regard that, admittedly the vehicles were sold by the 1^st petitioner on 16.05.2023, whereas, the tax liability as per Ext.P7 in respect of vehicle bearing Registration No. KL-40B-9355, is for the period from 01.04.2020 to 30.06.2023 and as per Ext.P8, the motor vehicle tax arrears for vehicle bearing Registration No.KL-63-9441, is for the period from 01.07.2021 to 30.06.2023. Therefore, since the vehicles were sold on 16.05.2023, I am of the view that, up to the quarter ending on 30.06.2023 from the date of surrender of the vehicles, the liability shall be upon the 1^st petitioner, as the person in possession of the said vehicles.

In such circumstances, this writ petition is disposed of, directing the 1^st respondent to determine the amount payable by the petiti