1 CGHC010094392025 2026:CGHC:37735 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 1412 of 2025 Order Reserved on 29.07.2026 Order Delivered on 24.08.2026 1 - Smt. Malti Singh W/o Shri Goverdhan Singh Aged About 59 Years R/o Mahuapara, Manendragarh Tahsil Manendragarh, Distt. Korea (C.G.) Now Distt. M.C.B. (C.G.) ... Petitioner(s) versus 1 - State Of Chhattisgarh Through Secretary, Department Of Transport, Mantralaya, Mahanadi Bhawan, New Raipur (C.G.) 2 - District Transport Officer, Koria Distt. Koria (C.G.) Now Distt. M.C.B. (C.G.) 3 - Taxation Authority, (Karadhan Adhikari) District Tansport Office, Koria Distt. Koria (C.G.) Now Distt. M.C.B. (C.G.) 4 - Smt. Babita Shrivastava W/o Shishir Shrivastava Aged About 52 Years R/o Ward No. 1, Manendragarh Distt. Koria (C.G.) Now Distt. M.C.B. (C.G.) ... Respondents VISHAKHA BEOHAR Digitally signed by VISHAKHA BEOHAR 2 (Cause-title taken from the Case Information System) ----------------------------------------------------------------------------------------- For Petitioner :- Mr. Shakti Raj Sinha, Advocate along with Mr. Pawas Sharma, Advocate For State :- Mr. Soumitra Kesharwani, P.L. For Respondent No.4:- None, as the notice is unserved (due to death) ----------------------------------------------------------------------------------------- SB- Hon'ble Shri Justice Amitendra Kishore Prasad CAV Order 1. By way of this petition, the petitioner has called in question the order dated 12.12.2024/09.12.2024 passed by respondent No.2, whereby the representation submitted by the petitioner has been decided holding that the petitioner continues to be the owner of vehicle bearing registration No. CG-16A/0482, despite the petitioner's specific assertion that the said vehicle had already been sold to Smt. Babita Shrivastava, W/o Shri Shishir Shrivastava, pursuant to the sale agreement dated 25.04.2011; it is further contended that despite repeated requests made by the petitioner, no action was taken and, therefore, the petitioner submitted a representation dated 20.07.2018, which remained pending, and thereafter, pursuant to the direction issued by this Court vide order dated 09.07.2018 passed in W.P.(C) No.198 of 3 2017, the said representation came to be considered and decided by respondent No.2 by passing the impugned order. 2. Following reliefs have been prayed in this petition:- “10.1 The Hon'ble Court may kindly be pleased to set-aside/quash the order dated 12.12.2024/09.12.2024 issued by the respondent no.2 treating the petitioner is owner of the Mini Bus bearing registration no. CG-16-A-0482 is illegal and against their own letter dated 30.11.20211. 10.2 That, the Hon'ble Court may further be pleased to set- aside/quash the letter dated 09/12.12.2024 issued by the respondent no.3 whereby the tax has been assessed from 01.04.2011 to 31.12.2024 of Rs. 5,21,141/- against the petitioner. 10.3 That, the Hon'ble Court may further be pleased to direct the respondent no.2 & 3 to re-asses the tax on the vehicle bearing registration no. CG-16-A-0482 against the respondent no.4 by exempting the petitioner to pay the same in light of letter dated 30.11.2011 and in light of agreement dated 25.04.2011. 10.4 Any other relief which this Hon'ble Court may deems fit and proper looking to the facts and circumstances of the case may also be awarded to the petitioner including the cost and expenses of this petition.” 4 3. The case of the petitioner, in brief, is that she is engaged in passenger transport business on the strength of a permit granted by the Transport Authority and was the registered owner of mini bus bearing registration No. CG-16-A/0482, which was sold by her to respondent No.2 pursuant to sale agreement dated 25.04.2011, whereunder the liability towards payment of taxes was agreed to be borne by respondent No.4 and possession of the vehicle was also handed over accordingly; however, on account of non-payment of tax in respect of the said vehicle, the other buses operated by the petitioner were also seized by the authorities, compelling her to submit a representation dated 20.07.2018 before respondent No.2, and as the said representation was not acted upon, the petitioner approached this Court in W.P.(C) No.198 of 2017, wherein vide order dated 09.07.2018, a direction was issued to the competent authority to consider and decide the representation, but despite the said direction, the matter remained pending for several years and ultimately, by the impugned order dated 12.12.2024/09.12.2024, the representation was rejected/decided on the ground that the petitioner continued to be the registered owner of the vehicle and was, therefore, liable for the outstanding tax, pursuant to which respondent No.3 assessed a sum of Rs.5,21,141/- 5 against the petitioner, comprising tax of Rs.1,90,400/-, penalty of Rs.1,82,722/- and interest of Rs.1,48,019/.; the petitioner further relies upon the letter dated 30.11.2011 issued by respondent No.3 assessing tax of Rs.31,360/- for the period from May, 2011 to November, 2011, contending that the same demonstrates that the authorities had already been informed regarding the sale of the vehicle, and hence, the petitioner has called in question the aforesaid order and consequential demand in the present petition. 4. Mr. Shakti Raj Sinha and Mr. 4. Mr. Shakti Raj Sinha and Mr. Pawas Sharma, learned counsel appearing for the petitioner, submit that the impugned order dated 09.12.2024/12.12.2024 is illegal, arbitrary and contrary to law, inasmuch as the petitioner had already sold vehicle bearing registration No. CG-16-A/0482 to respondent No.4, Smt. Babita Shrivastava, pursuant to the sale agreement dated 25.04.2011, whereunder possession of the vehicle was also handed over and the liability towards payment of future tax was specifically agreed to be borne by the purchaser. Despite the said transaction having been brought to the notice of the authorities, the petitioner has been saddled with the entire tax liability on the ground that she continues to be the registered owner of the vehicle. It is further submitted that the authorities themselves, vide letter dated 30.11.2011, had 6 assessed the tax in respect of the said vehicle for the period from May, 2011 to November, 2011, which demonstrates that the authorities were aware of the sale transaction. Learned counsel further submits that despite the specific direction issued by this Court vide order dated 09.07.2018 passed in W.P.(C) No.198 of 2017 to consider and decide the petitioner's representation dated 20.07.2018, the respondents kept the matter pending for several years and ultimately, after an unexplained delay of more than six years, passed the impugned order, thereby fastening upon the petitioner the liability towards tax, penalty and interest, including penalty of Rs.1,82,722/- and interest of Rs.1,48,019/-, which have accrued substantially on account of the respondents' own inaction and administrative delay. It is contended that the State cannot be permitted to take advantage of its own wrong and thereafter impose upon the petitioner the financial consequences arising from its failure to decide the representation within the time stipulated by this Court. 5. Learned counsel further submits that the respondents have themselves adopted an inconsistent approach in respect of another vehicle bearing registration No. CG-16-A/0713, wherein, in the very same proceedings, the petitioner's tax liability was discharged despite similar circumstances, 7 whereas in respect of the vehicle in question a contrary view has been taken, which is arbitrary and discriminatory. Placing reliance upon the judgment of the Hon'ble Supreme Court in Mahindra & Mahindra Financial Services Ltd. v. State of U.P. AIR Online 2022 SC 185, learned counsel submits that, for the purpose of determining tax liability, the expression "owner" cannot mechanically be confined to the person whose name continues to stand in the registration certificate, particularly when actual possession, control and enjoyment of the vehicle have already been transferred to another person. It is, therefore, submitted that, after the sale and delivery of possession on 25.04.2011, the tax liability arising in respect of the vehicle ought to have been fastened upon respondent No.4, who was in actual possession and enjoyment thereof, and not upon the petitioner. Learned counsel further submits that the petitioner had also intimated the competent authorities, including the Commissioner, Collector and Transport Department, regarding the sale of the vehicle and, therefore, the respondents cannot now contend that the petitioner suppressed the transaction or continued to remain in possession and enjoyment of the vehicle. On these submissions, learned counsel prays that the impugned order and the consequential demand of Rs.5,21,141/- raised 8 against the petitioner be quashed and the respondents be directed to fasten the liability towards tax dues arising after the date of sale upon respondent No.4. 6. Learned State counsel, opposing the petition, submits that the impugned order has been passed by the competent authority after duly considering the representation of the petitioner and the relevant provisions governing levy and recovery of motor vehicle tax. It is submitted that admittedly the vehicle bearing registration No. CG-16-A/0482 continued to stand registered in the name of the petitioner and, therefore, so long as the requisite procedure for transfer of ownership under the Motor Vehicles Act was not completed and the name of the purchaser was not substituted in the registration records, the petitioner continued to be the registered owner and could not escape the statutory liability towards payment of tax merely on the basis of a private sale agreement. Learned State counsel further submits that any inter se agreement between the petitioner and respondent No.4 regarding payment of tax liability cannot bind the State or absolve the registered owner of the statutory liability. It is contended that the alleged sale agreement dated 25.04.2011, even if taken into consideration, does not by itself effect a valid transfer of registered ownership for the purposes of the Motor Vehicles Act, 9 particularly in the absence of compliance with the mandatory requirements relating to transfer of ownership. It is further submitted that the letter dated 30.11.2011 relied upon by the petitioner does not amount to recognition of transfer of ownership by the competent registering authority and cannot override the statutory records. 7. Learned State counsel also submits that the tax, penalty and interest have been calculated in accordance with the applicable provisions and the petitioner cannot seek waiver of the statutory dues merely on the ground that her representation remained pending. The subsequent delay in deciding the representation does not extinguish the substantive tax liability of the registered owner, nor can the same confer any right upon the petitioner contrary to the statutory provisions. It is further submitted that the judgment relied upon by learned counsel for the petitioner in Mahindra & Mahindra Financial Services Ltd. (Supra) is distinguishable on its facts and does not absolve a registered owner from the statutory liability where the transfer of ownership has not been duly recorded in accordance with law. On these grounds, learned State counsel prays for dismissal of the writ petition, contending that no illegality, arbitrariness or 10 perversity is made out in the impugned order or the consequential demand raised against the petitioner. 8. I have heard learned counsel appearing for the petitioner as well as learned State counsel and have perused the material available on record. 9. The principal question which arises for consideration before this Court is as to whether, after the petitioner had admittedly sold the vehicle bearing registration No. CG-16-A/0482 to respondent No.4 and had handed over its possession to her, the petitioner could still be fastened with the liability to pay motor vehicle tax under the Chhattisgarh Motoryan Karadhan Adhiniyam, 1991, merely because the registration certificate continued to stand in her name. A further question which arises for consideration is as to whether tax could be demanded from the petitioner for the period subsequent to the sale, particularly when the petitioner asserts that she was neither the owner nor in possession or use of the vehicle during the relevant period. 10. It is not in dispute that the vehicle bearing registration No. CG-16-A/0482 was sold by the petitioner to respondent No.4 pursuant to the sale agreement dated 25.04.2011. It is also the specific case of the petitioner that possession of the vehicle was handed over to respondent No.4 and that, under 11 the terms of the agreement, the liability towards payment of future tax was to be borne by the purchaser. The petitioner has further placed on record the document dated 30.11.2011 issued by the taxation authority, wherein the tax liability in respect of the said vehicle for the period from May, 2011 to November, 2011 was assessed and, significantly, the name of the purchaser was also mentioned therein. 11. The aforesaid document dated 30.11.2011 assumes considerable significance for deciding the controversy involved in the present petition. The said document demonstrates that the competent taxation authority was not oblivious of the transaction of sale and, in fact, had knowledge that the vehicle had been transferred to another person. Thus, the contention of the respondents that the petitioner alone continued to be liable merely because her name continued to appear in the registration certificate cannot be accepted in a mechanical manner without examining the actual factual position relating to possession, use and operation of the vehicle after the date of sale. It is true that, ordinarily, the statutory requirements relating to transfer of ownership of a motor vehicle have to be complied with and a private agreement between the seller and purchaser cannot, by itself, override the statutory provisions governing 12 registration and taxation. However, the issue before this Court is not merely whether the private agreement dated 25.04.2011, by itself, effected a statutory transfer of registration. The question is whether, in the facts of the present case, the petitioner can be saddled with tax liability for a period during which she asserts, supported by contemporaneous material, that she had already sold the vehicle, parted with its possession and had ceased to have any control over or use of the vehicle. 12. The statutory liability to pay tax cannot be determined in complete isolation from the factual question as to who was actually in possession and use of the vehicle during the relevant period. If the petitioner had, in fact, sold the vehicle and had ceased to possess or ply the same, and the vehicle was thereafter in the possession and use of respondent No.4, the petitioner cannot be made liable for the tax merely because the purchaser failed to complete the requisite formalities for substitution of her name in the registration records. The State authorities, particularly when they were themselves put to notice of the transaction, were required to examine this factual aspect before fastening the entire liability upon the petitioner. 13 13. The material placed on record further indicates that the petitioner had approached the authorities and had brought the factum of sale to their notice. More importantly, the taxation authority, vide its communication dated 30.11.2011, had itself made reference to the purchaser in relation to the vehicle in question. Thus, the respondents cannot legitimately contend that the sale of the vehicle was an afterthought or that the authorities had no knowledge whatsoever of the transfer of possession. The impugned demand dated 09.12.2024/12.12.2024 has, however, been raised against the petitioner for a substantially long period, resulting in a demand of Rs.5,21,141/-, comprising tax, penalty and interest. The respondents, while issuing such demand, have proceeded principally on the basis that the vehicle continued to stand registered in the name of the petitioner. The impugned order does not disclose that the competent authority has undertaken any effective enquiry into the petitioner's specific contention that she had sold the vehicle on 25.04.2011, had handed over its possession to respondent No.4 and had thereafter neither possessed nor plied the vehicle. 14. The distinction between registration and actual possession and use of the vehicle becomes particularly 14 relevant in the present case. The petitioner cannot be made liable for a tax liability arising from the use or possession of a vehicle during a period when, if her assertion is found to be correct, she had already divested herself of the vehicle and had no control over its operation. The authority was, therefore, required to determine the factual issue as to who was actually in possession and use of the vehicle during the period for which the demand has been raised. 15. The respondents have also not been able to satisfactorily explain as to why the communication dated 30.11.2011, which is a contemporaneous document issued by the taxation authority itself and which contains reference to the purchaser, was not given due consideration while deciding the petitioner's representation. The said document is not a private document created by the petitioner; rather, it emanates from the taxation authority. Therefore, it cannot be brushed aside without recording appropriate reasons. 16. At the same time, this Court is conscious of the fact that respondent No.4, being the alleged purchaser of the vehicle, has not appeared before this Court and, therefore, this Court cannot, at this stage, conclusively record a finding against her that she was in actual possession and use of the vehicle throughout the period for which the tax has been demanded. 15 The factual question as to whether respondent No.4 actually possessed and plied the vehicle after the date of sale requires determination by the competent taxation authority after affording due opportunity to all concerned. 17. Consequently, this Court is of the considered opinion that the impugned demand cannot be sustained in its present form. The competent authority, while reconsidering the matter, shall specifically examine the effect of the sale agreement dated 25.04.2011, the handing over of possession of the vehicle, the communication dated 30.11.2011 issued by the taxation authority, the representations submitted by the petitioner and all other relevant documents placed by the parties on record. 18. The competent authority shall further ascertain, by conducting an appropriate enquiry, as to whether the petitioner had actually ceased to possess or ply the vehicle after 25.04.2011 and whether respondent No.4 was thereafter in possession and use of the vehicle. If, upon such enquiry, it is found that the petitioner had sold the vehicle, handed over its possession and had neither possessed nor plied the vehicle during the relevant period, the petitioner cannot be saddled with the liability towards tax dues pertaining to such period merely because the registration continued in her 16 name. In such eventuality, the competent authority shall reconsider the liability in accordance with the applicable statutory provisions and may proceed against the person found liable in law. 19. Conversely, if, upon enquiry, it is found that the petitioner continued to possess or ply the vehicle, or that the factual assertions made by her regarding cessation of possession and use are not established, the competent authority shall be at liberty to determine the tax liability in accordance with law. Likewise, if respondent No.4 is found to have been in possession and use of the vehicle during the relevant period, the competent authority shall consider her liability for payment of the applicable tax dues in accordance with law, after providing her due opportunity of hearing. 20. So far as the penalty and interest component is concerned, the same shall also be reconsidered by the competent authority in the light of the aforesaid determination. The petitioner has specifically contended that the matter remained pending before the authorities for several years despite the direction of this Court to consider and decide her representation. Therefore, while reconsidering the demand, the competent authority shall also examine whether the levy of penalty and interest for the period attributable to the delay 17 in administrative decision-making is legally sustainable and shall pass a reasoned order on the said aspect as well. 21. It is made clear that this Court is not, at this stage, recording a final finding that respondent No.4 is liable for the entire tax demand. Such determination has to be made by the competent taxation authority after examining the actual possession and use of the vehicle during the relevant period and after affording an opportunity of hearing to respondent No.4. However, the petitioner cannot be held liable mechanically merely on the basis of her name continuing in the registration certificate when there is contemporaneous material indicating that the vehicle had already been sold and the authorities were aware of such transaction. 22. Accordingly, the impugned order dated 09.12.2024/12.12.2024 and the consequential demand raised against the petitioner are set aside to the extent they fasten the entire tax, penalty and interest liability upon the petitioner without determining the aforesaid factual aspects. The matter is remitted to respondent Nos.2 and 3 for fresh consideration. The Respondents No.2 and 3 shall issue notice to the petitioner as well as respondent No.4 and shall afford them reasonable opportunity to produce the relevant documents and place their respective contentions on record. Thereafter, 18 the competent authority shall determine, in accordance with law, the person liable for payment of tax for the relevant period, after specifically examining the date of sale, transfer of possession, actual use and operation of the vehicle, and the effect of the document dated 30.11.2011. 23. If it is found upon such enquiry that the petitioner had sold the vehicle on 25.04.2011, had handed over possession thereof to respondent No.4 and had not thereafter possessed or plied the vehicle, the tax liability for the subsequent period shall not be recovered from the petitioner merely because her name continued in the registration records, and the authority shall proceed against the person legally liable in accordance with the applicable provisions. The issue of penalty and interest shall also be determined consequentially and in accordance with law. 24. The entire exercise shall be completed by respondent Nos.2 and 3 expeditiously, preferably within a period of eight weeks from the date of receipt of a copy of this order. 25. It is clarified that this Court has not expressed any final opinion on the inter se rights or liabilities of the petitioner and respondent No.4, and the competent authority shall decide the matter independently on the basis of the material 19 available on record and the findings recorded pursuant to the enquiry directed herein. 26. With the aforesaid directions, the writ petition stands disposed of. Sd/- (Amitendra Kishore Prasad) Judge vishakha