Judgment:
B.N. Mahapatra, J.
1. In this writ petition, the petitioner challenges the action of the R.T.O., Rourkela, Sundargarh-O.P. No. 1 (hereinafter referred to as 'the R.T.O.'), refusing to transfer the ownership of Truck bearing Registration No. OR-14-C-7343 in the name of the petitioner, who purchased it in auction from the Orissa State Financial Corporation (hereinafter referred to as 'the Corporation') and to issue road permit for non-payment of arrears of tax outstanding against the said vehicle prior to the date of auction on the ground that such action of the R.T.O. is illegal and arbitrary.
2. The facts and circumstances giving rise to this petition are that one Rajib Kumar Pratihari availed a loan from the Corporation and purchased a Tata Truck bearing Registration No. OR-14-C-7343. As there was default in repayment of the loan to the Corporation, possession of the vehicle was taken over by the corporation under Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as 'the SFC Act') on 15.12.2001. After seizure of the vehicle, a notice for sale of the vehicle was published on 12.01.2002 in 'The Anupam Bharat'. In the meeting of Disposal-cum-advisory Committee held on 29.01.2002, the petitioner on negotiation agreed to purchase the vehicle for a consideration of Rs. 2.50 lakhs. The Corporation having accepted the offer of the petitioner issued a sale letter in his favour on 31.01.2002 (Annexure-1). Pursuant to the said sale letter, petitioner paid Rs. 1.50 lakhs including earnest money immediately and executed necessary documents to secure the balance amount of Rs. 1.00 lakh. After completion of all the formalities, Assistant Manager (Legal) of the Corporation issued a sale memo dated 01.02.2002 (Annexure-2) in favour of the petitioner authorizing him to take all necessary steps for transfer of ownership in his favour. The Branch Manager of the Corporation (O.P. No. 3) issued a vehicle release order dated 01.02.2002 (Annexure-3) in favour of the petitioner, on the basis of which the vehicle was released in his favour on 03.02.2002. The Branch Manager of the Corporation also issued a request letter vide Letter No. 2644 dated 01.02.2002 (Annexure-5) to the R.T.O. to transfer the ownership of the vehicle in question in favour of the petitioner. Thereafter, the petitioner approached the R.T.O. for transfer of ownership of the vehicle in question in his favour by submitting all necessary forms along with the letter dated 01.02.2002 issued by opposite party No. 3. The petitioner also deposited requisite fees (Annexure-6 series) on 08.02.2002 with the R.T.O. for transfer of the ownership in his favour and for grant of the road permit. But the R.T.O. refused to transfer the ownership of the vehicle on the ground that an amount of Rs. 94,000/- outstanding against the vehicle in question had not been paid by the previous owner. Hence, the writ petition.
3. Mrs. Sujata Jena, learned Counsel appearing on behalf of the petitioner submitted that immediately after purchase of the vehicle in auction the petitioner submitted necessary forms before the R.T.O. and also paid requisite fees for transfer of the ownership of the vehicle in his favour and for road permit. The R.T.O. should not have refused to transfer the ownership of the vehicle in favour of the petitioner, who became the owner of the said vehicle after purchasing it in auction on the ground of non-payment of arrears of tax and penalty by the previous owner, whose vehicle was seized by the Corporation under Section 29 of the SFC Act. Refusal by the R.T.O. to transfer the vehicle in the name of the petitioner is highly illegal, arbitrary and amounts to deliberate harassment to the petitioner for no fault on his part.
She further submitted that under no circumstances the petitioner should have been asked to pay the penalty, which was imposed on the previous owner of the vehicle. Referring to the letter dated 31.01.2002 (Annexure-1), Mrs. Jena submitted that in Paragraph-6 of the said letter it has been categorically mentioned that the Corporation shall write to the R.T.O. for transfer of ownership of the vehicle in favour of the petitioner, and the arrears of tax etc., if any, shall be payable by the original loanee. The petitioner being a bona fide purchaser of the vehicle for consideration, should not be asked to pay the tax and penalty that was payable by the previous owner. Mrs. Jena further submitted that in view of the provision contained in Section 39 of the Motor Vehicles. Act, 1988 the vehicle in question cannot be driven in any public place or in any other place by the petitioner unless the vehicle is registered in accordance with law. It was further argued that as per the Explanation to Section 3 of the Orissa Motor Vehicles Taxation Act, 1975 (hereinafter referred to as 'the OMVT Act') which was in force till 25.02.2005, only where there was a certificate of fitness and permit, it was presumed that the vehicle was plying. After purchase of the vehicle in auction, the Corporation has only handed over the possession of the vehicle to the petitioner, but the certificates of registration and fitness and road permit were not handed over to him. Moreover, since the ownership of the vehicle was not transferred in favour of the petitioner, the petitioner was not able to obtain the certificate of fitness and permit in absence of certificate of registration and tax clearance certificate. Therefore, the R.T.O. should have presumed that the vehicle was not plying and consequently no tax and penalty should be imposed on the petitioner for the period when there was no certificate of registration, fitness and permit to ply the vehicle.
In support of her contention, Mrs. Jena, learned Counsel appearing on behalf of the petitioner relied upon a decision of the Hon'ble Supreme Court in Ved Prakash Garg v. Premi Devi and Ors. : AIR 1997 SC 3854. It was also argued that since the fact on non-use of the vehicle after auction sale was not in dispute, the petitioner should not be asked to pay any tax and penalty unless and until the vehicle is transferred in the name of the petitioner and certificate of registration, fitness and permit are issued in favour of the petitioner and he is permitted to ply the vehicle. Moreover, the R.T.O. has not taken any step to recover the arrears of tax payable from the previous owner even though Sub-section (2) of Section 12 of the OMVT Act says that nothing contained in Section 12 shall be deemed to affect the liability of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle for payment of arrears of tax.
4. Learned Advocate General, appearing on behalf of the R.T.O. submitted that under Section 12 of the OMVT Act the petitioner is liable to pay both tax and penalty due from the previous owner of the vehicle, which remained unpaid on the date the petitioner purchased the vehicle in auction. It was vehemently argued that tax includes penalty.
In support of his contention, learned Advocate General relied on a decision of the Apex Court in C.A. Abraham v. Income Tax Officer, Kottayam and Anr. : AIR 1961 SC 609. Referring to the decisions of the Apex Court in Collector-cum-Chairman, RTA, Cuttack v. Pranab Kumar Parija Disposed of on 23.09.1997 : SC CA No. 6670 of 1994; Harnam Singh v. The State of Himachal Pradesh : AIR 1975 SC 236, Transport Commissioner v. Ashok Ranjan Mohanty 2002(7) SBR 165; Orissa State Financial Corporation v. Transport Commissioner-cum-Chairman, STA and Ors. (2005) 11 SCC 440 and decisions of this Court in Sachidananda Rath v. OSFC disposed of on 25.2.91 : O.J.C. No. 2613 of 1985 and Sri Rabindra Kumar Jena v. The Managing Director, OSFC and 3 Ors. : 93 (2002) CLT 670 : 2002 (Supp.) OLR (NOC) 806, it was argued that the petitioner is liable to pay the arrears of tax and penalty due from the previous owner of the vehicle. He further argued that the petitioner is also liable to pay the tax and penalty for the period from the date of purchase onwards. After seizure of the vehicle, neither opposite party No. 3 nor the previous owner-Rajib Pratihari has made any application under Section 10 of the OMVT Act for temporary discontinuance of use of the vehicle enclosing the documents of the vehicle as required under the law. In absence of any undertaking and intimation under Section 10 of the OMVT Act, it is to be presumed that the vehicle had been used or kept for use within the State as provided under Section 10(3) of the Act, and, therefore, the petitioner is liable to pay both the tax and penalty imposed on him for the post-purchase period. Tax and penalty amounting to Rs. 63,945/- and Rs. 1,27,890/- respectively in respect of the said vehicle have not been paid since April, 1998 till December, 2004.
5. Ms. S.L. Pattnaik, learned Counsel appearing on behalf of the Corporation, submitted that in Condition No. 2.7 of the letter dated 31.01.2002 (Annexure-1), it is clearly stated that the Corporation shall not be liable for any statutory dues, such as motor vehicle tax, road tax etc., if any, against the vehicle either prior to or after its sale. The Corporation is neither a transferee nor an owner of the vehicle, and, as such, Section 12 of the OMVT Act is not applicable to the Corporation. It was further argued that after seizure of the vehicle, on 14.12.2001 the Corporation wrote a letter to the R.T.O. on 31.12.2001 vide letter No. OSFC(B.M.)PR/2432/01-02 requesting to off-road the vehicle No. OR-14C/7343 (T. Truck) enclosing duly filled up Form-H as per rules. The said letter Form-H were sent to the R.T.O. by registered post under Annexures-A/2 and B/2 to the counter affidavit. She further submitted that the Corporation has also issued necessary intimation to opposite party nb.1 for change of ownership of the vehicle to the name of the petitioner.
6. On the above rival contentions of the parties, the following questions fall for consideration of this Court:
i) Whether the petitioner, who purchased the vehicle in auction from the Corporation, is liable to pay the arrears of tax and penalty due from the previous owner of the vehicle that remained unpaid on the date of auction purchase?
ii) Whether the petitioner is liable to pay tax and penalty for post-auction period when the Corporation soon after seizure of the vehicle on 14.12.2001 wrote a letter to opposite party No. 1 on 31.12.2001 in Form-H requesting to off-road the vehicle and also both the Corporation and the petitioner approached the R.T.O. to transfer the ownership of the vehicle in favour of the petitioner which was refused and there is nothing on record to show that the vehicle was plying during such-period ?
7. The first question relates to liability of the petitioner for payment of tax and penalty payable by the previous owner, which remained unpaid at the time of purchase of the vehicle by the petitioner in auction from the Corporation. Section-12(1) speaks 'if tax leviable in respect of any motor vehicle unpaid by any person liable for payment thereof and such person before having paid the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle, shall be liable to pay the tax to the Taxing Officer.'
Sub-section (1) of Section 12 makes it amply clear that a transferee of the vehicle or the person who is in possession or control of the vehicle shall be liable to pay the arrears of tax payable by the previous owner or the person who had possession or control of such vehicle and remained unpaid at the time of transfer of the vehicle. Sub-section (2) of Section 12 speaks that nothing contained in this section shall be deemed to affect the liability of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle for payment of the said tax.
Thus, Section 12(1) only speaks of the unpaid tax and does not speak of anything about penalty. In view of such unambiguous statutory provision, it cannot be said that the petitioner is liable to pay the amount of penalty due from the previous owner and remained unpaid by the time the petitioner purchased the vehicle in auction.
This Court in Sri Sudhakar Patnaik v. Commissioner-cum-Chairman State Transport Authority and two Ors. 2004 (Supp.) OLR 840 held that no imposition of penalty is to be made for the period of confiscation, as the enforcement agencies making seizure of vehicles are not liable to submit off-road intimation. The auction purchaser is only liable to pay arrears of tax if not paid by the original owner of the vehicle or the enforcement agencies. It is the purchaser's discretion to initiate legal proceeding to recover such arrears of tax from the concerned party/parties.
8. Law is well settled that imposition of penalty is quasi-criminal in nature. It is imposed for failure to carry out a statutory obligation. Penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its statutory obligation.
The Hon'ble Supreme Court in Hindustan Steel Ltd. v. The State of Orissa : AIR 1970 SC 253, held as follows:
An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest or acted in conscious disregard of its obligation.
The Apex Court in Ved Prakash Garg (supra) held when an employee suffers from a motor accident injury while on duty on the motor vehicle belonging to the insured employer, the claim for compensation payable under the Workmen's Compensation Act along with interest thereon, if any, as imposed by the Commissioner under Section 3 and 4A(3) (a) of the Act will have to be made good by the insurance company jointly with the insured employer. But so far as the amount of penalty imposed on the insured employer under contingencies contemplated by Section 4-A (3)(b) is concerned, as that is on account of personal fault of the insured not backed by any justifiable cause, the insurance company cannot be made liable to reimburse that part of the penalty amount imposed on the employer. The latter because of his own fault and negligence will have to bear the entire burden of the said penalty amount with proportionate interest thereon, if imposed by the Workmen's Commissioner.
9. Thus, so far as the imposition of penalty is concerned, it is always on account of personal fault of the person concerned. It is always relatable to an offender. It is a personal liability and the same cannot be fastened on any person other than the offender. Tax and penalty are of different concepts.
10. Learned Advocate General vehemently argued that the word 'Tax' appearing in Section 12 of OMVT Act includes penalty. In support of his contention, he relied upon the decision of the Hon'ble Supreme Court rendered in C.A. Abraham (supra). In that case, the Apex Court held as under:
Section 44 of the Income-tax Act sets up machinery for assessing the tax liability of firms which have discontinued their business and provides for three consequences: (1) on the discontinuance of the business of a firm, every person who was at the time of its discontinuance a partner is liable, in respect of the income, profits and gains of the firm, to be assessed jointly and severally, (2) each partner is liable to pay the amount of tax payable by the firm, and (3) the provisions of Chapter IV, so far as may be, apply to such assessment.
The expression 'assessment' used in the sections of Chapter IV of the Income-tax Act is not used merely in the sense of computation of income and when Section 44 declares that the partners or members of the firm or association shall be jointly and severally liable to assessment, it refers to the liability to computation of income under Section 23 as well as the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof....
In the context of income tax assessment of a firm, the Apex Court observed that the imposition of penalty on one partner under Section 28 in case of assessment of a firm, which consisted of two partners, after the death of one of them, was valid. Therefore, the facts of that case are completely different from the facts of the case at hand and the principle decided in that case by the Apex Court has no application to the present case.
The law laid down by the Hon'ble Supreme Court in Pranab Kumar Parija (supra) is of no help to the opposite parties. The facts of that case are quite different from the facts of the present case. In that case, the respondent was the owner of a public carriage (bus) and was operating the same on the basis of temporary permit on the Bhubaneswar-Balasore route. There was default in payment of tax payable under the provisions of the OMVT Act and penalty to the tune of Rs. 80,248/-. The respondent deposited a sum of Rs. 10,000/- and applied for grant of a temporary permit. The said application was accompanied with tax clearance certificate indicating that the entire tax had been cleared up but the penalty remained unpaid. The said application of the respondent for grant of temporary permit was disposed of with a direction to issue a temporary permit for 28 days subject to the condition that the respondent would deposit 50% of the arrears of penalty dues and give an undertaking to clear up the balance amount in five equal monthly instalments. The appeal filed by the respondent against the said order was dismissed by the State Transport Appellate Tribunal. The order of the Tribunal was challenged before this Court in a writ petition and the same was allowed by this Court with a direction that the question of grant of temporary permit in respect of respondent's vehicle was to be considered notwithstanding the fact that levy of penalty under Section 13 of the Act was pending in appeal before the appellate authority. In that context, the Hon'ble Supreme Court held that the requirement regarding tax clearance certificate has been incorporated in the Rules for the purpose of ensuring that the person who applied for permit does not have any arrear outstanding against him. The Hon'ble Supreme Court further held that while considering the application of the respondent for grant of temporary permit the concerned authority could impose condition for payment of the outstanding penalty. In that case, the matter relates to issuance of temporary permit to the registered owner of the vehicle who himself defaulted in making payment of tax in time for which penalty had been imposed on him, i.e., registered owner. But, in the present case, so far as the first question is concerned, no penalty has been imposed on the petitioner for non-payment of tax in time. Therefore, the principle decided in the said case has no application to the present case.
Similarly, the decision of the Apex Court in Harnam Singh (supra) is of no help to opposite parties wherein the Apex Court held that every appeal against conviction abates on the death of the accused except an appeal from a sentence of fine. An appeal from a sentence of fine is expected from all-pervasive rules of abatement of criminal appeals for the reason that the fine constitutes a liability on the estate of the deceased and the legal representatives on whom the estate devolves are entitled to ward off that liability. In the case at hand, no estate of the previous owner has devolved on the petitioner. The petitioner is a bona fide purchaser of the vehicle in auction sale for adequate consideration. Therefore, the issues involved in both the cases are completely different.
The Apex Court in Ashok Ranjan Mohanty (supra) held that under Section 12 of the OMVT Act both the original owner and transferee or the person in possession or control of the vehicle are equally liable for arrears of tax. It is not incumbent upon the State to proceed first against the original owner and then only against transferee. In the said judgment, the Apex Court held about the liability of the successor with regard to payment of arrears of tax only in terms of Section 12 of the OMVT Act and not on the question of payment of arrear penalty.
The issue before the Apex Court in Orissa State Financial Corporation (supra) was with regard to payment of arrears of tax in respect of a vehicle sold in auction. The Hon'ble Apex Court held that the first respondent is at liberty to proceed in accordance with law and recover the arrears of tax either from the previous owner or the second respondent, or the person who is in possession of the vehicle. Thus, in that case also, the Hon'ble Supreme Court did not hold that the purchaser of the vehicle in auction is liable to pay the arrears of penalty.
This Court in Sachidananda Rath (supra) held that liability for payment of the arrears of tax in respect of the vehicle seized by the opposite party is that of the auction purchaser and if he has not ascertained regarding the arrears of tax position prior to purchase of the vehicle in auction, he does so at his own risk. This judgment decides the liability of auction purchaser with regard to the arrears of tax only prior to the purchase and not about the arrears of penalty.
This Court in Sri Rabindra Kumar Jena (supra) also held that the subsequent transferee or purchaser is liable to pay the arrears of tax of the transferor in terms of Section 12 of the OMVT Act.
11. In view of the above, we are unable to accept the contention of the learned Advocate General that the term 'tax' appearing in Section 12 of the OMVT Act includes penalty. The petitioner therefore is liable to pay only the tax, which was due on the previous owner and remained un-paid on the date of purchase of the vehicle in auction from the Corporation.
12. To deal with the second question, it is necessary to quote here the relevant provisions contained in Sections, 3,3A, 4, 10 and 11 of the OMVT Act.
3. Levy of Tax - (1) Subject to the other provisions of this Act, there shall be levied on every motor vehicle used or kept for use within the State a tax at the rate specified in [Schedule-I]
(2) xx xx xx
(3) xx xx xx
Explanation - An owner who keeps a transport vehicle for which the certificate of fitness and the certificate of registration are valid, or an owner who keeps any other motor vehicle, of which the certificate of registration is valid, shall, for the purpose of this Act, be presumed to keep such vehicle for use:
Provide that if the Taxing Officer finds a motor vehicle having been used on any day during the period for which the registration certificate of a vehicle has been suspended or cancelled under the relevant provisions of the Motor Vehicles Act such vehicle shall be deemed to have been kept for use for the whole period without payment of tax.
(The above explanation to Section 3 has been deleted vide Orissa Act 3 of 2005 with effect from 25.2.2005)
xx xx xx
3-A. Levy of additional Tax - (1) Subject to the other provisions of this Act, there shall be levied on every public service vehicle and goods carriage used or kept of use within the State, an additional tax at a rate specified in [Schedule-I].
(2) XX XX XX
(3) XX XX XX
4. Payment of tax and declaration of liability - (1) The tax shall be paid in advance within such time and such manner as may be prescribed, to the Taxing Officer by the registered owner of person having possession or control of the vehicle. xx xx xx
10. Prior intimation of temporary discontinuance of use of a vehicle - (1) Whenever any motor vehicle is intended not to be used for any period, the registered owner or person having possession or control thereof shall on or before the date of expiry of the term for which tax has been paid, deliver to the Taxing Officer, an undertaking duly signed and verified in the prescribed form and manner specifying the period aforesaid and the place where the motor vehicle is to be kept along with such other particulars as may be prescribed and the registration certificate, fitness certificate, permit and tax token, then current and shall from time to time by delivering, further undertakings give prior intimation to the concerned Taxing Officer of the extension, if any, of the said period and the changes, if any, of the place where the motor vehicle shall be kept:
Provided that no such undertaking shall relate to a period exceeding one year at a time.
(2) If at any time during the period covered by an undertaking as aforesaid the motor vehicle is found being used or kept at a place in contravention of any such undertaking, such vehicle shall, for the purpose of this Act be deemed to have been used throughout the said period without payment of tax.
(3) In the absence of any undertaking delivered under Sub-section (1) every motor vehicle liable to tax under this Act shall be deemed to have been used or kept for use within the State.
11. Refund of tax - (1) When any person has paid tax in respect of a motor vehicle, he shall be entitled to a refund:
(a) Where an undertaking has been delivered under Sub-section (1) of Section 10 in respect of such motor vehicles, which has not, in the opinion of the Taxing Officer, been found to be false, by the time the application for refund is made, and the period specified in the said undertaking, comprises any period for which tax has been paid in respect of such vehicle, for each complete calendar month of the period for which tax has been paid and which remained unexpired on the date of delivery of the said undertaking, of an amount equal to one-twelfth of the annual tax payable on such vehicle;
(b) where excess tax has been paid for any period due to over assessment by the Taxing Officer or otherwise, of the amount paid in excess of the tax payable; and
(c) where, after payment of tax in respect of a vehicle, it is found that the vehicle is not subject to tax, of the tax so paid:
Provided that no such refund shall be made unless the person claiming the refund has made an application in that behalf to the concerned Taxing Officer within one year from the date on which the refund became due and every such refund shall be subject to such conditions as may be prescribed.
13. A conjoint reading of Sections 3, 3-A, 4,10 and 11 of the OMVT Act makes it clear that tax and additional tax shall be levied on every motor vehicle used or kept for use within the State at specified rate and, if any such tax has been paid in advance in respect of a motor vehicle and the said vehicle was not used after payment of the tax in advance for some period, the person who paid such tax is entitled to get refund of a portion of tax in respect of the period for which the vehicle was not in use, of course, subject to fulfilment of certain conditions as prescribed in Section 10. In other words, the intention of the Legislature is to levy tax on any vehicle upon its actual use. Otherwise, there would not have been any provision like Section 11 for refund of a portion of tax paid in advance for any period when the vehicle was not put to use. The preconditions like timely furnishing of undertaking with certain documents and other particulars provided in Section 10 is to plug the possibility of taking advantage of the provision of refund by unscrupulous vehicle owner or the person in possession or control of the vehicle even when the vehicle was in use. Section-11 further provides that a person is also entitled to refund who paid tax in excess of the tax payable by him or where, after payment of tax in respect of a vehicle, it is found that the vehicle is not subject to tax.
14. The reason given by the opposite parties to levy tax and penalty during the post-auction period is that the petitioner has never furnished prior intimation to the taxing authority along with certificate of registration, fitness, permit and tax token in terms of Section 10 of the OMVT Act and in absence of any such prior intimation by delivering undertaking in Form-H, as required under Section 10(1) read with Rule 19 of Orissa Motor Vehicle Taxation Rules, 1976, every motor vehicle liable to tax shall be deemed to have been used or kept for use within the State.
A thorough look to the provisions contained in Section 10 speaks of a prior intimation of temporary discontinuance of use of a vehicle which is fit in all respects for plying on the road but intended not to be used. This means the vehicle in respect of which prior intimation of temporary discontinuance of use of the vehicle is to be furnished before the taxing authority, as required under Section 10, must have registration certificate, fitness certificate, permit and tax token. Section 10 requires that whenever any motor vehicle is not intended to be used for any period, the registered owner or person having control or possession thereof shall on or before expiry of the term for which tax has been paid shall deliver to the Taxing Officer an undertaking in the prescribed form along with registration certificate, fitness certificate, permit and tax token. The head note of the Section 'prior intimation of temporary discontinuance of use of the vehicle' itself shows that prior intimation is in respect of a vehicle which is in use and intended not to be used temporarily. The further requirement of Section 10 is that undertaking shall be delivered to the Taxing Officer on or before the date of expiry of the term for which tax has been paid, which makes it clear that at the time of furnishing prior intimation by delivering an undertaking, the vehicle is fit for plying in all respects and is in use and tax has been paid in advance. Thus, owner of a vehicle or a person having possession or control thereof can deliver undertaking to the Taxing Officer as required under Section 10 only when he is in possession of registration certificate, fitness certificate, permit and tax token in respect of the vehicle concerned, which is in use or kept for use.
Admittedly, in the present case, the petitioner purchased the vehicle in auction from the Corporation when the vehicle was not in use or kept for use and at the time of such purchase some tax and penalty was outstanding against the previous owner. After purchase of the vehicle in question, the Corporation has only handed over the possession of the vehicle to the petitioner and the certificate of registration, fitness and permit were not handed over to the petitioner in respect of the said vehicle. The ownership of the vehicle was also not transferred in favour of the petitioner, even though he applied for the same along with necessary fees soon after purchase of the vehicle in auction. As per Rule 84(2) of the Orissa Motor Vehicle Rules, 1993 (hereinafter referred to as 'the OMV Rules') an application for grant of permit shall be accompanied by motor vehicle documents like, registration certificate, fitness certificate and insurance certificate along with the tax clearance certificate in respect of the motor vehicle obtained from the taxing authority. Similarly, Rule 22(2) of the OMV Rules requires that an application for grant or renewal of a certificate of fitness shall be made in Form-II accompanied by a tax clearance certificate in Form-Ill to the registering authority. Form-Ill requires a declaration by the registered owner to the effect that there is no arrear of tax, additional tax or penalty outstanding in respect of the vehicle. Since the dispute was going on regarding payment of tax and penalty payable by the previous owner, which remained unpaid on the date of auction, it was not possible on the part of the petitioner to obtain the tax clearance certificate which is necessary to get the fitness certificate. In absence of certificate of registration and tax clearance certificate, the petitioner was not able to obtain permit and certificate of fitness. No tax was also paid in advance. In such circumstance, it was not possible on the part of the auction purchaser to deliver to the Taxing Officer an undertaking along with registration certificate, fitness certificate, permit and tax token, as required under Section 10. The Corporation in its counter stated that after seizure of the vehicle on 14.12.2001, the Corporation wrote a letter to the R.T.O-O.P. No. 1 on 31.12.2001 vide letter No. OSFC (B.M) PR/2432/01-02 requesting to off-road the vehicle No. OR-14C/7343 (T. Truck) enclosing duly filled up Form-H as per rules. The said letter and Form-H were sent to the R.T.O., by regd. post with A.D. under Annexures A/2 and B/2. According to the R.T.O., the Branch Manager of the Corporation wrote a letter to him (Annexure-A/2) to off-road the vehicle bearing registration No. OR-14-C-7343 but the said letter was not accompanied by documents, as provided in Section 10 of the Act. Similarly, the R.T.O. admits that the Branch Manager of the Corporation also wrote a letter to him with a request to transfer the ownership of the vehicle in favour of the petitioner but the said letter was not accompanied by necessary documents. However, after purchase of the vehicle in question in auction the petitioner applied to the R.T.O. for transfer of the ownership of the same in his name. The petitioner also deposited requisite fees for transfer of ownership and issuance of road permit. But, the same was denied to the petitioner on the ground that the outstanding dues against the said vehicle had not been paid by the previous owner and immediately thereafter the petitioner has challenged the said action of the opposite parties in this writ petition. For the reasons stated above, the provisions contained in Section 10 have no application to the case of the petitioner. Thus, the contention of opposite parties that in absence of any undertaking delivered by the petitioner, as provided under Sub-section (1) of Section 10, the vehicle in question shall be deemed to have been used or kept for use within the State in view of the provisions contained in Section 10(3) of the OMVT Act is not acceptable. Moreover, on these facts, the Explanation to Section 3, which was in force till 25.02.2005, is applicable. In addition to that, there is also no material on record to show that after purchase of the vehicle in auction the petitioner has plied the said vehicle for any period without transfer of ownership, road permit, fitness certificate etc.
In these facts and circumstances, levy of tax as well as penalty for post-auction period by the R.T.O. is not permissible on the ground that requirement of Section 10 has not been complied with.
15. The decision of the Apex Court in Taxing Officer, Kalahandi v. Ajit Singh : (1987) 3 SCC 402 has no application to the case of the applicant since in that case owner of the vehicle did not pay the tax for the month of January, 1966 although he had paid the tax for February and March, 1966. He also did not intimate the Taxing Officer about the intent of non-use of the vehicle in January, 1966. On these facts, the Apex Court held that the owner of the vehicle is liable to pay the tax and penalty for the month of January, 1966.
In the present case, the ownership of the vehicle has not been transferred in the name of the petitioner and no certificate of fitness and permit have been issued to the petitioner from the date of purchase of the vehicle in auction and the disputes between the parties concerned in this case are pending from the month of purchase of the vehicle, i.e., February, 2002.
16. In view of the above, the petitioner is not liable to pay arrears of penalty payable by the previous owner. Petitioner is also not liable to pay tax and penalty for the post-auction period. However, only on payment of arrears of tax payable by the previous owner that remained unpaid on the date of purchase of the vehicle in auction, the ownership of the vehicle shall be transferred by the R.T.O. in favour of the petitioner subject to fulfilment of other condition(s), if any, as required by law.
17. The writ petition is allowed to the extent indicated hereinabove. There shall be no order as to costs.
B.S. Chauhan, C.J.
18. I agree.