Tax liability for vehicle ownership lapses upon surrendering possession to a financier.

JUDGMENT

The petitioner is a registered owner of a lorry bearing Reg. No.

KL-26M-7100. The said vehicle was purchased by the petitioner after availing a credit facility from the 6th respondent. As the petitioner could not repay the installment due to the 6th respondent, the vehicle was taken possession of by the 6th respondent in terms of the rights under the loan cum hypothecation agreement executed between the petitioner and the 6th respondent. The date of surrender was 02.11.2024, which is evident from Ext.P2. Now the petitioner is issued with Ext.P3 recovery notice demanding the arrears of motor vehicle tax. Even though Ext.P4 objection was submitted by the petitioner highlighting the surrender of the said vehicle, the recovery proceedings are being continued.

2. This writ petition is submitted by the petitioner in such circumstances seeking the following reliefs:

1. Issue a writ of certiorari or any other appropriate writ, order or direction, quashing the revenue recovery proceedings initiated against the Petitioner as per Exhibit P3.

2. Declare that the Petitioner is not liable to pay any road tax

or related dues in respect of the said vehicle for the period

after 02.11.2024, the date on which the vehicle was

surrendered to the 6^th respondent; and consequently, direct

the respondents to not take any recovery proceedings in

future against the petitioner with respect to the dues on the said vehicle.

3. Issue a writ of mandamus or any other appropriate writ, order or direction, directing the 6th respondent to produce before the 3^rd respondent, all documents relating to the sale/disposal of the vehicle and to complete the transfer of registration to the subsequent purchaser in accordance with law;

4. Issue a writ of mandamus or any other appropriate writ, order or direction, Directing the respondents 4 and 5 to not proceed with any coercive steps, including attachment, seizure or auction of movables or immovable property belonging to the Petitioner, in pursuance of the impugned revenue recovery;

5. Issue a writ of mandamus or any other appropriate writ, order or direction, directing the 3rd respondent to seize the vehicle, cancel/suspend it’s registration and to deal with the vehicle in accordance with law.

6. Grant such other and further reliefs as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice.

7. Grant exemption to the petitioner from filing translation of the vernacular documents.

3. A statement was submitted by the 3rd respondent in response to the averments contained in the writ petition. Even though the fact that the surrender of the vehicle to the financier is not disputed, it is averred that as per the data available in the office of the 3^rd respondent, the arrears of Motor Vehicle tax now demanded, pertain to the period from 01.07.2024 to 30.06.2025. It is also averred that a notice has been issued for Rs.61,920/- on

17.10.2025 to the financier for remitting the arrear of tax in respect of the said vehicle from 01.01.2025 to 30.06.2025. As far as the challenge raised by the petitioner is concerned, the same is mainly on the ground that, since the financier has already taken possession of the vehicle, the petitioner is not liable to pay the amount after the said period.

4. In fact, the question of law in this regard is already decided by this Court in the decision Rubeesh Shamsudheen v. Joint Regional Transport Officer, Aluva [2025 KLT Online 2688] , wherein, this Court, after referring to the various provisions under the Motor Vehicles Act , as well as the Kerala Motor Vehicle Taxation Act , held that, in a case where, the vehicle is taken possession by the financier, from the date on which the possession was handed over to the financier, the liability to pay the tax woul