Judgment :- (This Writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the notice dated 2-1-2008 issued by the first respondent vide Annexure-H and Etc.,). Writ petitioner by a financier-banker who had financed certain amount for the purchaser of a motor vehicle registered in the name of third respondent. It appears that the third respondent defaulted in payment of instalments due to the petitioner–bank and the petitioner-bank re-possessed the vehicle on 31-12-2002 for the reasons of realization of its dues from the time respondent. 2. A registered motor vehicle has some special qualities. It can be compared to Mithas and affects all those persons who touch the vehicle. Under the Karnataka Motor Vehicle Taxation Act, 1957 [for short, the Act], any person who is in possession of a registered motor vehicle will automatically incur liability for payment of motor vehicle tax so long such registered motor vehicle is possessed by the person. The liability is in addition to the liability fastened on the registered owner of the vehicle. 3. The petitioner banker having re-possessed the registered motor vehicle-an all India tourist mini bus-automatically stepped into the shoes of the registered owner so far as the liability for payment of motor vehicle tax is concerned and it is for this reason the petitioner promptly given a non-user intimation to the authority concerned with effect from the date of seizure and it appears that the vehicle was garaged at the transporters’ yard at Shimoga. It further transpires that the authority on 19-6-2004 permitted the petitioner to tow on the vehicle to garage at Bangalore. Further story is that the petitioner intimated the taxation authorities that the vehicle was scraped and sold to a scrap dealer in the terms of intimation dated 10-10-2005. The petitioner followed up with a request to the authorities under the Motor Vehicles Act, 1988 [for shot, MV Act] seeking for cancellation of the certificate of registration with effect form the date. 4. It appears as a follow-up action, on 14-11-2005 a senior motor vehicles inspector attached to the office of the regional transport office, Rajarajeswarinagar, Bangalore visited the garage i.e. the place where the vehicle had been parked earlier, and submitted a report indicating that the vehicle had been garaged at the place and it had been scrapped as on that date. .5. .5. The petitioner, thereafter, followed up its request for cancellation of the registration with letters dated 9-5-2006, 22-5-2006, 18-12-2006 and 22-1-2007, copies of which are produced at Annexure-D to G respectively to the writ petition. While it is not very clear whether the RTO, Bangalore acted upon the request of the petitioner for cancellation of registration, it appears that the authorities had not paid much attention to the request of the petitioner for cancellation, may be for the ostensible reason, as submitted by Ms Niloufer Akbar, learned Additional Government Advocate, that such a request should can from the registered owner and not a person like the petitioner, as per Section 55 of the MV Act, but on the other hand, issued a demand notice dated 2-11-2007 [Annexure-H to the .writ petition], calling upon the petitioner to remit a sum of Rs. 3,31,284/- being the tax due for the period beginning from 1-2-2002 to 31-1-2003, adding up a sum of Rs. 2,75,070 being the tax due with 20% thereof being the compounding fee i.e. Rs. 55,214/-, within seven days form the date of receipt of the notice, failing which recovery action will be initiated under the Act. It is questioning this demand, the petitioner, it appears, preferred an appeal before the Deputy Commissioner for Transport, Shimoga under Section 15 of the Act. A copy of the memorandum of appeal is produced at Annexure-K to the writ petition. 6. Unfortunately for the petitioner, it appears, this appeal was returned with an endorsement dated 26-12-2007 [Annexure-L to the writ petition] indicating that as the petitioner had not produced satisfactory proof of payment of admitted tax or amount not disputed in the appeal, the appeal papers were being returned for re-presentation after compliance with the requirements in terms of Section 15(2)(a) of the Act read with Rule 31(A)(1)(a) of the Karnataka Motor Vehicles Taxation Rules, 1957[for short, the Rules]. 7. To compound the misery of the petitioner, the respondent-authorities followed up with a fresh demand notice dated 28-1-2008[Annexure-M to the writ petition], calling upon the petitioner to pay as sum of Rs 7,24,870/-with penalty at the rate of 20% on this amount , purporting to be the tax due for the vehicle for the period 1-2-2002 up to 31-1-2003. However this demand notice did not cover the tax liability for the period 1-2-2003 to 31-4-2004 and also a credit of a sum of Rs. However this demand notice did not cover the tax liability for the period 1-2-2003 to 31-4-2004 and also a credit of a sum of Rs. 25,000/-, which had been paid earlier. 8. It is aggrieved by the action on the part of the appellate authority in issuing the endorsement at Annexure-L, returning the appeal papers, and also the fresh demand under Annexure-M dated 28-1-2008, the petitioner-banker presented this writ petition. 9. Notice has been issued to the respondents. Respondents 1 and 2 are represented by Ms Niloufer Akbar, learned Additional Government Advocate and the third respondent has remained unrepresented. 10. The matter is taken up for disposal and I have heard Sri Prasanna, learned counsel for the petitioner and Ms Niloufer Akbar, learned AGA for respondents 1 and 2. 11. Submission of Sri Prasanna is that in the first instance the demands preceded by a reasoned order to support the same and therefore the demands at Annexure-H and M are to be quashed. .12. The alternative submission is that the appellate authority was not justified in returning the appeal with an endorsement to re-present it after making payment of admitted tax for the reason that the petitioner had disputed the entire tax amount in the appeal and there was no admitted tax and there .is no occasion for issue an endorsement of this nature, even in terms of Section 15(2)(a) of the Act. 10.13. Ms. Niloufer Akbar, learned Additional Government Advocate, appearing for the first and second respondents, on the other hand, submits that the petitioners is obviously in arrears of tax; that it is for the petitioner to produce proof of payment of admitted tax or no objection from the authority and it is also for the petitioner to satisfy the appellate authority to this effect, as the appeal papers are only returned and the appeal is not rejected and therefore the matter need not be examined by this court. It is also submitted that the action taken not only by the taxation authorities but also by the appellate authority is well justified in terms of the provisions of section 15 of the Act. 114. Section 15 of the Act, which reads as under: 115. Appeals- Any person, who is aggrieved by any order of a [Taxation Authority] made under this Act, may within the prescribed time and in the prescribed manner, appeal to the prescribed authority. 114. Section 15 of the Act, which reads as under: 115. Appeals- Any person, who is aggrieved by any order of a [Taxation Authority] made under this Act, may within the prescribed time and in the prescribed manner, appeal to the prescribed authority. has come to be amended by the Karnataka Act No 8 of 2007, which reads as under: 15. Appeals- (1) Any person, who is aggrieved by any order of a Taxation Authority made under this Act, may within the prescribed time and in the prescribed manner, appeal to the prescribed authority. .(2) (a) No appeal shall be entertained by the appellate authority unless it is accompanied by satisfactory proof of the payment of the tax not disputed in the appeal. (b) Not withstanding that an appeal has been preferred under sub-section (1), the tax or other amount shall be paid in accordance with the order against which the appeal has been preferred: Provided that the appellate authority may, in its discretion, give directions as it thinks fit in regard to the payment of the tax or other amount payable under clause (b), if the applicant furnishes sufficient security to its satisfaction in such form and in such manner as may be prescribed. .(3) Any appeal preferred after the prescribed period shall be dismissed. It is because of the language of the sub-section 2(a) of Section 15 of the Act, learned AGA submits that the retuning of the appeal papers by the appellate authority is justified. .15. While one course of action to the petitioner is to re-present the papers to the appellate authority pointing out that the petitioner having disputed the entire amount demanded in terms of Annexure-H, there was nothing required to be paid and therefore the appeal is to be entertained, by supporting the case from the language of the clause-(b) of Section 15(2) of the Act, even now to submit that the .demand in terms of Annexure-M is not to be frowned upon for the reason that notwithstanding the appeal having been preferred, the authorities can nevertheless enforce the demand and therefore it is valid. 16. 16. It is also submitted by the learned AGA that the liability under Section 4 is a liability which fastens on the registered owners as well as the person in possession of the vehicle; that the exemption which was granted conditionally is lost, the moment the condition is violated; that the petitioner having removed the vehicle which had been garaged at Bangalore without prior permission of the transport authorities, the petitioner automatically loses the benefit of exemption and when once the exemption is lost in terms of Section 4 of the Act, the entire liability for the period including the period during which the vehicle was in fact stationary and off the roads and further at 20% compounding fee on that, it is only proper that before either raising a demand of this nature or making the person liable to this pay amount, a proposition notice proposing the action and the reason for such action is indicated to the person who was given intimation of ‘non-user’, the person is heard and then proper demand raised in accordance with the Act and the Rules. Unfortunately, the authorities under the Act and the Rules are accustomed to raising such demands without any reason and without affording an opportunity to the person concerned. May be only because the tax is payable in advance under the scheme of the Act. While the tax may be payable in advance, in the normal course, in a situation of the present nature, when a person has given a specific intimation about the non-use [of the vehicle] and there are reports by the inspecting authority that the vehicle is off the road and parked till a particular point of time, during which time, the exemption from payment of tax operates, it is only proper that the authorities give a proper opportunity to the person like the petitioner, and then pass orders. It is for this reason, the demand in respect of the period subsequent to 1-2-2003 till 30-11-2005 part of Annexure-M-is quashed, by issue of a writ of certiorari, with liberty to the taxing authorities to put the petitioner and the third respondents on notice and then to pass orders in accordance with law. 17. It is for this reason, the demand in respect of the period subsequent to 1-2-2003 till 30-11-2005 part of Annexure-M-is quashed, by issue of a writ of certiorari, with liberty to the taxing authorities to put the petitioner and the third respondents on notice and then to pass orders in accordance with law. 17. In so far as the endorsement returning the appeal papers by the appellate authority in terms of Annexure-L is concerned, I am of the view that it was not necessary for the appellate authority to have returned the papers for the reason that the subject matter of the appeal was a demand under Annexure-H and the entire amount was being disputed by the petitioner whether justified or not, and if so, no admitted amount and there was no scope for the operation of clause-(a) of sub-section (2) of Section 15 of the Act. For this reason, Annexure-L is quashed, by issue of a writ of certiorari, and the appellate authority is directed to consider the appeal on merits and in accordance with law. The petitioner is directed to present the appeal within two weeks from today to the appellate authority. .18. In so far as the demands in respect of demand under Annexure-H, which is subject matter of appeal under Annexure-L, is concerned while it is no doubt true that the authorities can enforce demand notwithstanding the pendency of the appeal, but the appellate authority having been given a .discretion in terms of proviso to Section 15 to issue a direction with regard to the payment, part of it or in full or in any other manner, if the appellant-applicant who seeks for stay or direction satisfies the appellate authority by furnishing sufficient security etc., and as the appellate authority had no occasion to examine this possibility, it is only fair that the respondents-authorities do not enforce the demand under Annexure-H pending the appellate authority passing orders on the application, if any already file or to be filed by the petitioner, subject to the passing of orders on the request. 19. Writ petition is allowed accordingly. 20. Rule issued and made absolute.