Aditya Mohapatra vs. State Of Orissa

Facts

The petitioner, Aditya Mohapatra, participated in an e-auction for a vehicle (Ashok Leyland Flat Bed Trailer, Regd. No OD-02CN-5473) after the original owner, Santosini Mohanty (OP No.4), defaulted on a hire purchase loan from the State Bank of India. The bank repossessed the vehicle and sold it to the petitioner for Rs. 18,03,240/- plus 18% GST. Upon depositing the auction price and receiving the vehicle, the petitioner approached the Regional Transport Officer (RTO), Bhubaneswar (OP No.2) for a change of ownership. However, OP No.2 demanded payment of Rs. 1,08,000/- in tax and Rs. 1,98,000/- in penalty, totaling Rs. 3,06,000/-, which were due prior to the petitioner taking possession. The petitioner contended he was not liable for these dues as the vehicle was not used by him during the period they accrued.

Held

The Court acknowledged that an auction purchaser like the petitioner is generally liable to pay arrear tax, even for periods when the previous owner was in possession, as per Section 12 of the Orissa Motor Vehicles Taxation Act, 1975. However, the Court also recognized the petitioner's claim for exemption from paying tax when the vehicle was "off-road". Referring to the case of Rajkishore Rout vs. R.T.O.-cum-Taxing Authority, Balasore, the Court noted that liability for tax depends on the use of the vehicle or keeping it for use. If the vehicle was not used, there would be no liability. The Court observed that the bank had intimated the "off-road" status of the vehicle to the RTO via email on September 1, 2026. Since the petitioner had not formally approached the RTO for exemption regarding the "off-road" period, the Court directed the petitioner to make an appropriate application to the concerned RTO within seven days. The RTO was then instructed to pass an order in accordance with the law regarding the change of ownership and payment of tax and penalty, considering Section 12 and 13 of the Act and the "off-road" intimation. The Court found the current prayer not cognizable under its extraordinary jurisdiction.

Key Issues

1. Whether the petitioner, as an auction purchaser of a vehicle, is liable to pay the tax and penalty due on the vehicle prior to his taking possession, as per Section 12 of the Orissa Motor Vehicles Taxation Act, 1975? 2. Whether the petitioner is liable to pay tax and penalty for the period the vehicle was repossessed by the bank and allegedly kept "off-road", especially if no "off-road" intimation was formally made by the petitioner? Petitioner's Arguments: The petitioner argued that he is not legally liable for the tax and penalty that accrued before he took possession of the vehicle through the e-auction. He claimed that since the vehicle was not used by him during the period the dues were incurred, he should be exempt from paying them, particularly for the time it was repossessed by the bank. Revenue/State's Arguments: The judgment does not explicitly record arguments from the Opposite Parties (State of Odisha & others). However, their action of demanding the tax and penalty implies they contend the petitioner, as the current possessor and subsequent owner, is liable for all outstanding dues on the vehicle.