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2024 (7) TMI 676 - HC - Indian LawsRecovery of arrears of tax on a vehicle purchase with penalty - HELD THAT - After adjusting the said sum of Rs. 51,120/- as above from Rs. 52,991/- paid by the petitioner on 17.09.2017, the excess amount of Rs. 1,871/- has been adjusted towards tax liability for period between 01.10.2020 and 31.12.2020 - the respondent has re-calculated the above said amount of Rs. 1,11,581/-, there is no justification in imposing penalty on the petitioner for no fault of the petitioner. The petitioner entertained a bona fide view that the petitioner was entitled to have the tax paid on life time basis and thus, had paid a sum of Rs. 52,991/- on 17.09.2017 for the period between 01.10.2017 and 14.12.2025. Therefore, imposition of penalty cannot be justified. Under these circumstances, the petitioner is directed to pay the differential tax due and payable by her together with 1% towards Government Labour Welfare Scheme through the Regional Transport Office. Petition disposed off.
Issues: Challenge to demand for arrears of tax on a vehicle purchase, calculation of tax liability, imposition of penalty, justification for penalty imposition, payment determination for petitioner.
Analysis: The petitioner contested an order from the respondent seeking payment of Rs. 2,27,340 as arrears of tax on a vehicle purchased in 2010. The petitioner had been paying taxes quarterly until September 2017, when a lump sum was paid for the period until December 2025. The respondent recalculated the tax liability, adjusting the previous payment and determining additional amounts due for various periods. The respondent revised the tax calculation, adjusting the previous payment and determining a new tax liability. However, the court found no justification for imposing a penalty on the petitioner, who had paid the tax in good faith on a lifetime basis. The court directed the petitioner to pay the differential tax amount due, along with a 1% contribution to the Government Labour Welfare Scheme through the Regional Transport Office. As per the court's decision, the petitioner was directed to pay a total of Rs. 54,702, broken down by tax amounts for specific periods and a 1% contribution. Upon payment of this sum, the name transfer of the vehicle would be facilitated. The judgment clarified that the prospective buyer could pay the Life Tax for the period starting from November 2023 to have the vehicle registered in their name. In conclusion, the Writ Petition was disposed of with the specified payment conditions for the petitioner, allowing for the transfer of the vehicle's ownership. No costs were awarded, and the connected Miscellaneous Petition was closed as a result of the judgment.
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