You have no case against the DVLA. They saw a vehicle on public road and it was subject to a SORN as I understand from above. They were doing their job.
You are the registered keeper of the vehicle and the vehicle was kept on a public road without valid vehicle excise duty being paid. you as the registered keeper are responsible for this.
However the Garage has a duty of care to you. They have kind of admitted this by paying the release fee. Then by a devious means tried to claw this back from you, that's another matter called fraud. Let's park that for now.
Did you at any time make it clear to the Garage that the vehicle SHOULD NOT be kept on a public road. You would have recieved a reminder to renew tax/SORN so you cannot say that you were not aware.
So you have 2 choices.
1. Put it down to experience and handle the situation better next time.
2. settle with the DVLA providing mitigation if necessary. Then you sue the Garage for neglegence for the losses you have incurred. You might find a strong letter threting court action may suffice, but you may need to go to small claims. If you did not make it clear as above that vehicle must not be stored on road this may work against you as a reasonable person may assume that a customer's car would be taxed and insured.
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