Jatinder Kumar vs. State Of Haryana And Others

Facts

The petitioner, Jatinder Kumar, purchased a vehicle (Registration No. HR-70T-0069) in a public auction conducted by the State of Haryana on April 3, 2024. He paid the bid amount of Rs. 2,70,000/- and GST of Rs. 48,600/-, totaling Rs. 3,18,600/-, as per the auction terms. The vehicle was sold on an 'as is where is' basis with its existing registration number. The petitioner used the vehicle in Chandigarh and subsequently applied for a No Objection Certificate (NOC) from the State Transport Commissioner, Haryana, to register the vehicle in Chandigarh. The respondent authorities demanded road tax, penalty, and interest amounting to Rs. 26,565/- for non-payment of tax within 30 days from the purchase date, relying on Rule 33E of the Haryana Motor Vehicle Rules, 1993. The petitioner contested this demand, arguing that the notifications cited by the respondents were inapplicable to vehicles purchased in auction and that he only required an NOC, not registration in Haryana.

Held

The Court allowed the petition. It found that the respondent's reliance on Rule 33E of the Haryana Motor Vehicle Rules, 1993, was misconceived. The Court noted that Rule 33E(1) deals with the sale of government vehicles and mandates that registration marks of 'GV' series or preferential marks shall be surrendered to the Transport Department, with an alternative mark assigned. The auction notice's terms and conditions, particularly clause 14, indicated that the indenting department had the prerogative to retain or allow the transfer of the registration number. If the department allowed transfer, the bidder had to deposit requisite government fees. In this case, the indenting department handed over the vehicle with its existing registration number without retaining it or asking the petitioner to pay fees for retaining a preferential number. The Court reasoned that the vehicle was sold on an 'as is where is' basis, and the petitioner paid the bid amount and GST as per the terms. The petitioner was not seeking registration in Haryana but merely an NOC for registration in Chandigarh. The Court held that the respondent had no authority to charge tax, interest, and penalty for the purpose of issuing an NOC, especially when the transaction was governed by the auction terms and the vehicle was sold with its existing registration number. The petitioner was not obligated to pay charges for retaining a preferential number as he did not intend to retain it, and it was the respondents' duty to arrange an alternative number if they intended to retain the original. Therefore, the demand for tax, interest, and penalty was quashed, and the petitioner was entitled to the NOC.

Key Issues

1. Whether the demand for road tax, interest, and penalty by the respondent authorities is legally sustainable when the petitioner purchased a vehicle in a public auction and only seeks an NOC for registration in another jurisdiction? (Mixed question of law and fact, turning on the interpretation of auction terms and conditions, Rule 33E of the Haryana Motor Vehicle Rules, 1993, and the nature of the transaction). Petitioner's arguments: The petitioner contended that the terms and conditions of the auction, specifically clauses 11, 12, and 14, governed the transaction. Clause 14 stipulated that if the indenting department allowed the transfer of the registration number, the bidder had to deposit requisite government fees to the transport department. In this case, the indenting department handed over the vehicle with its existing registration number without retaining it or asking the petitioner if he wished to retain it and pay the associated fees. Therefore, the petitioner argued that he was not liable for road tax, interest, or penalty. He also asserted that the notifications relied upon by the respondents were applicable to new vehicles or vehicles being transferred into Haryana, not to auction purchases. Respondents' arguments: The State counsel argued that the petitioner was bound to pay motor vehicle tax within 30 days as per Rule 33E of the Haryana Motor Vehicle Rules, 1993, read with a notification dated September 29, 2017. Failure to do so rendered him liable for interest and penalty, totaling Rs. 26,565/-. They asserted that upon deposit of the due tax, NOC would be issued.