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As the liability to pay token tax/fees of the vehicles was on the buyer of the vehicle, the petitioners were just to collect the same from the buyer and deposit online. The petitioners were not to be benefitted by saving this tax.

Collection and deposition of GST – The petitioners prayed for quashing of order dated 22.06.2020 whereby they have been directed to deposit differential amount of token tax/fees of the vehicles sold by it from 01.08.2019 to 26.11.2019. The petitioner is an authorized dealer of Hyundai Motors Private Limited and charged the cost value of the vehicle and the taxes levied thereon. Registration of vehicles is the responsibility of the buyer. The state Transport Department increased the registration fee on the vehicles. After the increase of the token tax, the petitioner continued collecting that amount from the buyers, on the cost of the vehicles and deposited the same with the Department. The transport department issued a clarification on 26.11.2019 that the token tax has to be calculated on the basic cost plus GST. Thereafter, a communication dated 22.06.2020 was received from the respondent No.3 RTO directing the petitioner to deposit the differential tax for the period from 01.08.2019 to 25.11.2019. It was difference of registration fees on the amount of GST, which earlier was not included in the cost price of the vehicle. Thus the clarification issued by the department has put liability on the petitioner with retrospective effect even though, the basic liability to pay token tax is not of the petitioner. The court observed that provision of the Act shows that the liability to pay the tax is on the registered owner who has the possession of the vehicle and not that of the seller of the vehicle. The petitioners were just to collect the tax from the buyer and deposit online. Any clarification issued by the department to a notification cannot have retrospective effect. Held that:- The Hon’ble High Court allowed the petitions and quashed the communication directing the petitioner to deposit the differential amount of tax for the period from 03.08.2019 to 26.11.2019.
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