The Mumbai Regional Transport Office (RTO) has issued show-cause notices to 19 luxury car dealers in the city and threatened to cancel their trade licences if they do not give a satisfactory explanation, according to reports by Mirror Now and The Times of India. The action follows an investigation into an alleged scheme to register high-end cars in the Union Territory of Daman and Diu, where motor vehicle tax is significantly lower, even though the vehicles were bought and are driven in Mumbai.

Source: Mirror Now

Investigators allege that some showrooms first registered newly bought cars temporarily in Mumbai and then moved their permanent registration to Daman and Diu. According to RTO officials cited in the reports, dealers allegedly used fabricated Leave and Licence agreements to make it appear that buyers lived or ran businesses in the Union Territory, while the buyers' Aadhaar cards showed permanent addresses in Maharashtra. In several cases, dozens of unrelated luxury vehicles were allegedly registered at the exact same rental address in Daman and Diu.

Source: The Times of India via PMN Sports

Transport Commissioner Rajesh Narvekar, who directed the probe, said the showrooms deliberately misled customers about their tax liabilities under the Maharashtra Motor Vehicles Tax Act, 1958, causing substantial losses to the state treasury, the reports said. Mirror Now reported that officials identified hundreds of high-end vehicles in the alleged racket: 68 luxury cars intercepted by the South Mumbai RTO, 104 vehicles in the eastern suburbs from Kurla to Mulund and Mankhurd, and 115 in the western suburbs between Bandra and Dahisar — 287 vehicles in total.

The 19 dealerships have been given seven days to respond to the show-cause notices. The RTO has said that if the responses are not satisfactory, the dealers' trade licences could be suspended or permanently cancelled. The allegations are the RTO's claims at the notice stage and have not been proved; the dealers' replies are awaited.