# Madan Singh v. State of U.P. & Ors

- **Citation:** (2023) 2 ILRA 1209
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-23
- **Case number:** Writ Tax No. 1120 of 2022
- **Bench:** Rajesh Bindal, C.J. J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/madan-singh-v-state-of-u-p-ors-49631
- **Pages:** 3

## Headnote

U.P. Motor Vehicles Taxation Rules , 1998Rule 18-Recovery citation on account of motor
vehicle
tax-impugned-the
vehicle
of
the
Petitioner hypothecated with finance companyunable to pay the loan-surrendered the vehicle
for recovery of loan amount-informed about the
surrendering
the
vehicle-no
liability
after
possession taken by the financer-financier liable
to pay tax-objection by the Petitioner to be
considered by the competent authority-liability
may be re-worked.

W.P. disposed. (E-9)

List of Cases cited:

Mahindra and Mahindra Financial Services Ltd.
Vs St. of U.P. & ors., (2022) 5 SCC 525

## Text

2 All. Madan Singh Vs. State of U.P. & Ors.
1209
(Crl.)192 and (iv) Zandu Pharmaceutical
Works Ltd. Vs. Mohd. Saraful Haq and
another, (Para-10) 2005 SCC (Cri.)283.

17. From the aforesaid decisions the
Apex Court has settled the legal position for
quashing of the proceedings at the initial stage.
The test to be applied by the court is to
whether uncontroverted allegation as made
prima facie establishes the offence and the
chances of ultimate conviction is bleak and no
useful purpose is likely to be served by
allowing criminal proceedings to be continue.
In S.W. Palankattkar & others Vs. State of
Bihar, 2002 (44) ACC 168, it has been held
by the Hon'ble Apex Court that quashing of
the criminal proceedings is an exception than a
rule. The inherent powers of the High Court
under Section 482 Cr.P.C itself envisages three
circumstances under which the inherent
jurisdiction may be exercised:-(i) to give effect
an order under the Code, (ii) to prevent abuse
of the process of the court ; (iii) to otherwise
secure the ends of justice. The power of High
Court is very wide but should be exercised
very cautiously to do real and substantial
justice for which the court alone exists.

18. The High Court would not
embark upon an inquiry as it is the
function of the Trial Judge/Court. The
interference
at
the
threshold
of
quashing
of
the
charge
sheet,
proceeding of the case and summoning
order in the case in hand cannot be
said to be exceptional as it discloses
prima
facie
commission
of
an
cognizable offence. In the result, the
prayer for quashing is refused. There is
no merit in this application filed under
Section 482 Cr.P.C. and is liable to be
dismissed.

19. In view of the discussions made
above, this application filed under Section
482 Cr.P.C., for the relief as prayed for, is
dismissed.
----------
(2023) 2 ILRA 1209
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 1120 of 2022

Madan Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Anshul Kumar Singhal

Counsel for the Respondents:
C.S.C., Ankur Agrawal (Standing Counsel)

U.P. Motor Vehicles Taxation Rules , 1998Rule 18-Recovery citation on account of motor
vehicle
tax-impugned-the
vehicle
of
the
Petitioner hypothecated with finance companyunable to pay the loan-surrendered the vehicle
for recovery of loan amount-informed about the
surrendering
the
vehicle-no
liability
after
possession taken by the financer-financier liable
to pay tax-objection by the Petitioner to be
considered by the competent authority-liability
may be re-worked.

W.P. disposed. (E-9)

List of Cases cited:

Mahindra and Mahindra Financial Services Ltd.
Vs St. of U.P. & ors., (2022) 5 SCC 525

(Delivered by Hon'ble Rajesh Bindal, C.J.
&
Hon'ble J.J. Munir, J.)

1. Recovery citation dated July 3,
2022 issued against the petitioner, on
1210 INDIAN LAW REPORTS ALLAHABAD SERIES
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
2 All. Madan Singh Vs. State of U.P. & Ors.
1211
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 the tax has not been paid, the
petitioner shall be liable to pay the same.

6. The writ petition is, accordingly,
disposed of and recovery citation against
the petitioner is quashed.
----------