MUMBAI, Dec. 4 -- The Bombay High Court has set aside orders of the transport department cancelling the registration of a high-end Nissan Patrol, holding that an innocent purchaser cannot be penalised for a fraud committed by previous owners and agents. The court said the buyer had paid customs duty, interest and penalty as directed by the Central Excise and Service Tax Settlement Commission, despite having no role in the illegal import of the vehicle, and therefore cancelling the registration was disproportionate and unjust. The ruling was made on a writ petition filed by 47-year-old city businessman, Imran Chandiwala, who had challenged the Regional Transport Office Appellate Authority's September 9 order, affirming the cancellation of his vehicle's registration. The cancellation had been originally ordered on March 27 by the Deputy Regional Transport Officer under Section 55(5) of the Motor Vehicles Act. According to the case, the car was initially imported fraudulently in the name of a diplomatic officer, to illegitimately claim exemption from payment of customs duty. It was later registered in Manipur in the name of a certain Meenarani Devi, who eventually sold it to Chandiwala for Rs.1.22 crore. The registration was transferred to Chandiwala in December 2020 after due paperwork. The fraud, however, came to light in August 2021, when the Directorate of Revenue Intelligence (DRI) seized the car, stating that the import had been facilitated through forged documents to evade duty. After proceedings before the Central Excise and Service Tax Settlement Commission, the petitioner paid customs duty of Rs.66 lakh, interest of Rs.35.77 lakh and a penalty of Rs.5 lakh, and the car was released. The commission expressly recorded that Chandiwala was not involved in the conspiracy and had exercised normal precautions expected from a bona fide purchaser. Despite this, the transport department issued a show-cause notice, alleging that the car had been registered on the basis of forged documents and subsequently cancelled the registration. The Appellate Authority upheld the cancellation on the ground that even if the petitioner was not at fault, the registration had stemmed from falsified records. Allowing the writ petition, Justice NJ Jamadar said the authorities had failed to give due weight to the Settlement Commission's findings, which were conclusive under the Customs Act regarding the petitioner's lack of involvement in the smuggling operation. Invoking the doctrine of proportionality, the court observed that the cancellation effectively disabled the petitioner from using the car, amounting to excessive punishment under the circumstances....