Transport vehicle tax liability attaches to financier in possession; non-use does not itself avoid payment under the statutory scheme.

A financier in possession of a transport vehicle under a hire-purchase, lease, or hypothecation arrangement is treated as the owner for tax purposes under the U.P. Motor Vehicles Taxation Act, 1997, and tax liability arises from the date possession is taken. The charging provisions require payment in advance before the vehicle is used in a public place, while the refund and exemption scheme shows that non-use does not by itself suspend liability. Relief for non-use is available only through the prescribed statutory procedure, including surrender of the relevant documents where required. The recovery and first-charge provisions reinforce that the person in possession remains liable to pay tax.

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Issues: Whether a financier in possession of a transport vehicle under a hire-purchase, lease, or hypothecation agreement is liable to pay tax under the U.P. Motor Vehicles Taxation Act, 1997 from the date of taking possession, and whether non-use of the vehicle postpones or avoids that liability.

Analysis: The statutory scheme treats a person in possession under a hire-purchase, lease, or hypothecation agreement as an owner. The charging provision for transport vehicles requires the tax to be paid in advance before the vehicle is used in a public place. The provisions governing payment and refund show that the legislature contemplated first payment of tax and only thereafter a refund claim if the vehicle is not used for the relevant period and the prescribed conditions are satisfied. The provision for surrender of registration, token, and permit confirms that exemption from tax for non-use is available only on compliance with the statutory procedure. The provisions relating to recovery and first charge further support the conclusion that liability attaches to the owner or operator in possession.

Conclusion: The financier in possession is liable to pay tax from the date of taking possession, and mere non-use does not by itself prevent that liability.

Final Conclusion: The appeal failed, and the High Court's view fixing tax liability on the financier-in-possession was left undisturbed.

Ratio Decidendi: Where a transport vehicle is held under a hire-purchase, lease, or hypothecation arrangement, the person in possession is treated as the owner and must pay tax in advance before use, with non-use giving rise only to a statutory refund or exemption upon compliance with the prescribed conditions.

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