Supreme Court of India
M/S TARACHAND LOGISTIC SOLUTIONS LIMITEDversusSTATE OF ANDHRA PRADESH & ORS.
- Citation
- 2025 INSC 1052
- Decided
- 29 August 2025
- Disposal
- Appeal(s) allowed
- Bench
- MANOJ MISRA
Holding
The premises are not a 'public place'; therefore, vehicles confined therein are not liable to motor vehicle tax under Section 3, and the Single Judge’s exemption order is restored.
Summary
The appellant, a logistics company, was awarded a contract to handle and store iron and steel at the central dispatch yard of Visakhapatnam Steel Plant (RINL) and deployed 36 motor vehicles exclusively within the enclosed premises. It sought exemption from motor vehicle tax under Section 3 of the Andhra Pradesh Motor Vehicle Taxation Act, 1963, arguing that the yard was not a 'public place' and that the vehicles were not used on public roads. The State authorities rejected the claim, invoking Rule 12A which deems a vehicle kept for use unless a written non‑use intimation is filed, and levied tax. The High Court Single Judge held the yard was not a public place and ordered a refund; the Division Bench reversed this, relying on Rule 12A. The Supreme Court examined the definition of 'public place' under the Motor Vehicles Act, 1988, the scope of Section 3, and the relationship between the rule and the statute, concluding that the rule must be read to give effect to the charging provision and cannot expand tax liability beyond vehicles used in a public place. Consequently, the Court restored the Single Judge’s decision, finding the vehicles not liable for tax during the period they were confined within the restricted premises. The appeal was allowed and the refund order reinstated.
Issues considered
- Whether the premises of Visakhapatnam Steel Plant's central dispatch yard constitute a 'public place' under Section 3 of the Andhra Pradesh Motor Vehicle Taxation Act, 1963.
- Whether motor vehicles used exclusively within such premises are liable to tax under Section 3 or entitled to exemption under Rule 12A and Section 4(1)(b).
Legislation cited
- Andhra Pradesh Motor Vehicles Taxation Rules, 1963s. Rule 12A
- Andhra Pradesh Motor Vehicle Taxation Act, 1963s. 3, s. 4(1)(b)
- Constitution of Indias. Article 265
- Motor Vehicle Act, 1988s. 2(34)
Headnote
Issue for Consideration Whether the premises of Visakhapatnam Steel Plant where appellant’s vehicles are exclusively used for handling and storage operations, constitute a ‘public place’ under the Andhra Pradesh Motor Vehicle Taxation Act, 1963; whether such vehicles are liable thereof or entitled to exemption therefrom. Headnotes† Andhra Pradesh Motor Vehicle Taxation Act, 1963 – s.3 – Interpretation – Andhra Pradesh Motor Vehicles Taxation Rules, 1963 – r.12A – Motor Vehicle Act, 1988 – s.2(34) – ‘public
Subjects
Section 3 of Andhra Pradesh Motor Vehicle Taxation Act, 1963Public placeLiability to pay tax under Section 3 of Andhra Pradesh Motor Vehicle Taxation Act, 1963Exemption from payment of tax under Section 3 of Andhra Pradesh Motor Vehicle Taxation Act, 1963Visakhapatnam Steel PlantRashtriya Ispat Nigam Limited (RINL)Central dispatch yard premisesPremises of Visakhapatnam Steel Plant not a public placeRestricted areaRestricted premises of RINLEnclosed by compound wallsCISF personnelPublic have no right of accessMotor vehicles plying within the central dispatch yardTaxability of motor vehicles not used or kept for use in a public placeSection 2(34) of Motor Vehicle Act, 1988Rule 12A of Andhra Pradesh Motor Vehicles Taxation Rules, 1963Motor vehicle taxMotor vehicles not being used on public roadsVehicles exclusively used for handling and storage operationsVehicles confined and used within the premisesDemand towards motor vehicle taxSection 4 of Andhra Pradesh Motor Vehicle Taxation Act, 1963Payment of tax and grant of licence
Judgment
[2025] 8 S.C.R. 2297 : 2025 INSC 1052
M/s Tarachand Logistic Solutions Limited
v.
State of Andhra Pradesh & Ors.
(Civil Appeal No. 11188 of 2025)
29 August 2025
[Manoj Misra and Ujjal Bhuyan,* JJ.]
Issue for Consideration
Whether the premises of Visakhapatnam Steel Plant where
appellant’s vehicles are exclusively used for handling and storage
operations, constitute a ‘public place’ under the Andhra Pradesh
Motor Vehicle Taxation Act, 1963; whether such vehicles are liable
to pay tax u/s.3 thereof or entitled to exemption therefrom.
Headnotes†
Andhra Pradesh Motor Vehicle Taxation Act, 1963 – s.3 –
Interpretation – Andhra Pradesh Motor Vehicles Taxation
Rules, 1963 – r.12A – Motor Vehicle Act, 1988 – s.2(34) –
‘public place’ – Appellant was awarded a contract for handling
and storage of iron and steel materials at central dispatch
yard within Visakhapatnam Steel Plant, Andhra Pradesh, a
corporate entity of Rashtriya Ispat Nigam Limited (RINL) – It
deployed motor vehicles for plying within the central dispatch
yard premises, a restricted area with members of the public
not having access to enter the premises – Appellant sought
exemption from payment of motor vehicle tax u/s.3 for
the period the vehicles were confined and used within the
premises – However, Respondent No.4 raised demand towards
motor vehicle tax – Paid by the appellant under protest –
Eventually, Single Judge held that appellant was plying its
vehicles within the central dispatch yard which is not a ‘public
place’ and directed the respondents to refund the amount paid
to the appellant – Division Bench relying upon r.12A, set aside
the order of Single Judge – Challenge to:
Held: 1.1 Impugned judgment set aside and that of the Single
Judge is restored – s.3 is the charging provision authorizing the
State Government to impose tax on motor vehicles – The taxable
* Author
2298 [2025] 8 S.C.R.
Supreme Court Reports
event u/s.3 is when a vehicle is used or kept for use in a ‘public
place’ in the State – Therefore, the tax is on the user or intendment
for use of motor vehicle in a ‘public place’ – Thus, if a vehicle is
actually used in a ‘public place’ or kept in such a way that it is
intended to be used in a ‘public place’ then the tax liability accrues.
[Paras 45, 51]
1.2 Motor vehicle tax is compensatory in nature having a direct
nexus with the end use – The rationale for levy of motor vehicle
tax is that a person who is using public infrastructure, such as,
roads, highways etc. has to pay for such usage – Legislature has
consciously used the expression ‘public place’ in s.3 – If a motor
vehicle is not used in a ‘public place’ or not kept for use in a ‘public
place’ then the person concerned is not deriving benefit from the
public infrastructure; therefore, he should not be burdened with
the motor vehicle tax for such period – Under s.2(34), MV Act,
‘public place’ inter alia means a road, street, way or other place,
whether a thoroughfare or not, to which the public have a right of
access. [Paras 28.1, 46]
1.3 Further, there is omission of the expression ‘public place’ in
r.12A (Liability for payment of tax in respect of motor vehicles
kept for use) – Opening words thereof are ‘for the purpose of
Section 3 of the Act’ – Thus, purpose of r.12A is to give effect
to s.3 – Question is not of the motor vehicle being deemed to
be kept for use and hence liable to tax – Requirement of law is
that the motor vehicle should be used or kept for use in a ‘public
place’ – When admittedly the motor vehicles of the appellant were
confined for use within the RINL premises which is a closed area
then question of the vehicles being used or kept for being used
in a ‘public place’ does not arise – The words appearing in r.12A
i.e. ‘a motor vehicle shall be deemed to be kept for use’ has to
be read as ‘a motor vehicle deemed to be kept for use in a public
place’ – Also, s.4(1)(b) enables a person whose motor vehicle was
not used during the period for which the motor vehicle tax has been
paid to seek refund – The motor vehicles in question were used
or kept for use only within the restricted premises of RINL which
is not a ‘public place’ – Therefore, the said vehicles are not liable
to be taxed for the period the said vehicles were used or kept for
use within the restricted premises of RINL – Constitution of India –
Art.265, Entry 57 of List II, Entry 35 of List III. [Paras 47, 49, 50]
Andhra Pradesh Motor Vehicle Taxation Act, 1963 – s.3 –
Andhra Pradesh Motor Vehicles Taxation Rules, 1963 – r.12A –
[2025] 8 S.C.R. 2299
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
Liability for payment of tax in respect of motor vehicles kept
for use – Purpose and mandate of, stated:
Held: Purpose of r.12A is to give effect to s.3 – A rule cannot
traverse beyond the scope and ambit of the parent statute – r.12A
has to be interpreted in such a way so as to be in sync with s.3 –
Further, intimation in writing to the Licensing Officer would be
required only when there is stoppage of user of the motor vehicle,
be it in a ‘public place’ or in any other place – Therefore, such a
requirement is not attracted in a case like the present one where
the contention is that the motor vehicles of the appellant were
not being used or kept for use in a ‘public place’ – Even in the
absence of any intimation in terms of r.12A, motor vehicles of the
appellant cannot be subjected to motor vehicle tax for the period
those were used or kept confined within the restricted premises
of RINL. [Paras 29.1, 47, 48, 50]
Constitution of India – Art.265 – Taxes not to be imposed save
by authority of law:
Held: Levy of tax has to be explicit – There cannot be exaction of
tax by implication or by following an interpretative process – The
charging section is the core of a taxing statute – A taxing statute
has to be construed literally; this is more so in the case of a
charging section – A subject is not to be taxed unless the words
of the relevant taxing statute unambiguously imposes the tax on
him. [Paras 36, 37]
Words and Phrases – ‘public place’ – Definition – Motor Vehicle
Act, 1988 – s.2(34) – Andhra Pradesh Motor Vehicles Taxation
Rules, 1963 – r.12A – ‘a motor vehicle shall be deemed to be
kept for use’ – To be read as ‘a motor vehicle deemed to be
kept for use in a public place’. [Paras 28.1, 47]
Case Law Cited
Bolani Ores Limited v. State of Orissa [1975] 2 SCR 138 : (1974) 2
SCC 777; Travancore Tea Estates Co. Ltd. v. State of Kerala [1980]
3 SCR 1388 : (1980) 3 SCC 619; Commissioner of Customs v.
Dilip Kumar [2018] 7 SCR 1191 : (2018) 9 SCC 1 – relied on.
State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal [2004]
3 SCR 956 : (2004) 5 SCC 155 – distinguished.
State of Kerala v. Aravind Ramakant Modawdakar (1999) 7 SCC
400 – held inapplicable.
2300 [2025] 8 S.C.R.
Supreme Court Reports
List of Acts
Andhra Pradesh Motor Vehicle Taxation Act, 1963; Andhra Pradesh
Motor Vehicles Taxation Rules, 1963; Motor Vehicle Act, 1988.
List of Keywords
Section 3 of Andhra Pradesh Motor Vehicle Taxation Act, 1963;
Public place; Liability to pay tax under Section 3 of Andhra Pradesh
Motor Vehicle Taxation Act, 1963; Exemption from payment of tax
under Section 3 of Andhra Pradesh Motor Vehicle Taxation Act,
1963; Visakhapatnam Steel Plant, Andhra Pradesh; Rashtriya Ispat
Nigam Limited (RINL); Central dispatch yard premises; Premises
of Visakhapatnam Steel Plant; Premises of Visakhapatnam Steel
Plant not a public place; Restricted area; Restricted premises of
RINL; Enclosed by compound walls; CISF personnel; Public have
no right of access; Public have no right to access the central
dispatch yard; Motor vehicles plying within the central dispatch
yard; Central dispatch yard not a public place; Taxability of motor
vehicles not used or kept for use in a public place; Section 2(34)
of Motor Vehicle Act, 1988; Rule 12A of Andhra Pradesh Motor
Vehicles Taxation Rules, 1963; Motor vehicle tax; Motor vehicles
not being used on public roads; Vehicles exclusively used for
handling and storage operations; Vehicles confined and used
within the premises; Demand towards motor vehicle tax; Section 4
of Andhra Pradesh Motor Vehicle Taxation Act, 1963; Payment of
tax and grant of licence.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11188 of 2025
From the Judgment and Order dated 19.12.2024 of the High Court
of Andhra Pradesh at Amravati in WA No. 711 of 2023
Appearances for Parties
Advs. for the Appellant:
Vijay Hansaria, Sr. Adv., Sanjay Sarin, Ms. Gagan Deep Kaur,
Ms. Kavya Jhawar, Preshit D. Bagul, Dinkar Kalra.
Advs. for the Respondents:
Ms. Prerna Singh, Guntur Pramod Kumar, Dhruv Yadav.
[2025] 8 S.C.R. 2301
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
Judgment / Order of the Supreme Court
Judgment
Ujjal Bhuyan, J.
Leave granted.
2. This appeal arises out of the judgment and order dated 19.12.2024
passed by the High Court of Andhra Pradesh at Amravati (‘High
Court’ for short) in Writ Appeal No. 711/2023.
3. Facts of the case may be briefly noted.
4. Appellant is a company incorporated under the Companies Act,
1956. It is engaged in the business of providing logistic support
since the year 1985, further diversifying its business activities into
deployment of heavy lifting equipments required for infrastructure
and construction projects. Appellant is the owner of various motor
vehicles which are used as heavy lifting equipments.
5. Appellant was awarded a contract dated 17.11.2020 for handling and
storage of iron and steel materials at central dispatch yard within
Visakhapatnam Steel Plant, Andhra Pradesh, a corporate entity of
Rashtriya Ispat Nigam Limited (‘RINL’).
6. Pursuant to the contract and consequential work order dated
19.01.2021, appellant deployed 36 numbers of motor vehicles bearing
various registration numbers, details of which are mentioned in the
paperbook, for plying within the central dispatch yard premises.
7. It may be mentioned that prior to the contract, appellant had duly paid
the requisite tax for the aforesaid registered motor vehicles and had
obtained fitness certificate, insurance certificate and pollution under
control certificate as per requirement of the statutory provisions.
8. Upon allotment of the contract, appellant deployed the motor vehicles
inside the central dispatch yard premises and with effect from
01.04.2021 all the motor vehicles stopped plying on the public roads
as those were confined to within the central dispatch yard premises
only. Appellant was under obligation to retain these vehicles within
the premises till continuation of the contract period and not be used
on public roads.
2302 [2025] 8 S.C.R.
Supreme Court Reports
9. According to the appellant, the central dispatch yard is enclosed by
compound walls and ingress and egress thereto is regulated through
the gates where Central Industrial Security Force (CISF) personnel
are deployed. No member of the public has any right to access the
central dispatch yard. Only those persons who are authorized to
enter are given gate passes by the CISF to enter the premises of
the central dispatch yard.
10. Appellant wrote to respondent No. 1 i.e. State of Andhra Pradesh
represented by its Principal Secretary, Transport Department vide
letters dated 07.12.2020 and 05.10.2021 intimating the state authority
that the motor vehicles of the appellant used in the central dispatch
yard premises belonging to Visakhapatnam Steel Plant of RINL
were not being used on public roads and, therefore, requested for
exemption from payment of motor vehicle tax for the period the
vehicles were confined and used within the central dispatch yard
premises. The aforesaid prayer was made in terms of Section 3 of
The Andhra Pradesh Motor Vehicle Taxation Act, 1963 (briefly ‘the
A.P. Act, 1963’ hereinafter).
11. Respondent No. 3 i.e. Regional Transport Officer, Gajuwaka did
not pass any order on the request made by the appellant. On the
contrary, the fourth respondent i.e. Motor Vehicle Inspector, Gajuwaka
inspected the motor vehicles stationed in the central dispatch yard
premises and, thereafter, raised a demand of Rs. 7,37,960.00 against
such motor vehicles on 16.11.2021. In addition, a further demand of
Rs. 15,33,740.00 were raised against the other vehicles stationed
in the said premises towards motor vehicle tax. Appellant paid the
said amount of Rs. 7,37,960.00 and Rs. 15,33,740.00, totaling
Rs. 22,71,700.00, towards motor vehicle tax under protest. It is stated
that appellant was compelled to pay the amount demanded under
protest as it was threatened with seizure of all the motor vehicles
operating within the premises of the central dispatch yard of RINL.
While making the payment, appellant stated that it reserved its liberty
to seek exemption from payment of such tax under the A.P. Act, 1963.
12. On 25.02.2022, appellant wrote to the third respondent for refund
of the amount paid under protest. However, there was no response.
13. At that stage, appellant filed a writ petition before the High Court
being W.P. No. 6206 of 2022 which was disposed of vide order dated
26.04.2022 directing the respondents to consider the prayer of the
[2025] 8 S.C.R. 2303
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
appellant expressed vide letters dated 07.12.2020 and 05.10.2021
for grant of exemption from payment of motor vehicle tax. Relevant
portion of the order dated 26.04.2022 reads as under:
11. Accordingly, the Writ Petition is disposed of with a
direction to the respondents to consider the representations
of the petitioner dated 07.12.2020 and 05.10.2021 for grant
of exemption from payment of tax. Needless to say, the
2nd respondent shall also permit the petitioner to produce
all such material or evidence necessary to demonstrate
that the vehicles of the petitioner have not been used or
kept for use on the public roads in the State of Andhra
Pradesh and shall pass an order, setting out reasons, after
due opportunity of hearing being given to the petitioner.
12. Thereupon, the respondents shall either refund or retain
the amounts collected from the petitioner in accordance
with the orders passed by the 2nd respondent. The said
exercise is to be completed, within a period of eight weeks
from the date of receipt of this order. No coercive steps
shall be taken against the petitioner pending disposal of the
said representations. There shall be no order as to costs.
14. In terms of the aforesaid order dated 26.04.2022, appellant submitted
a representation dated 25.05.2022 to respondent No. 3 seeking grant
of exemption from payment of motor vehicle tax and for refund of
Rs. 22,71,700.00 alongwith interest at the rate of 6 percent.
15. Vide order dated 14.06.2022, respondent No. 3 rejected the aforesaid
representation of the appellant. View taken by respondent No. 3 is
that RINL is a government company. Therefore, the premises of
RINL falls within the definition of a ‘public place’ which fulfills the
requirement of Section 3 of the A.P. Act, 1963.
16. Aggrieved by the aforesaid order of respondent No. 3 dated
14.06.2022, appellant preferred an appeal before the appellate
authority i.e. respondent No. 2 (Deputy Transport Commissioner,
Visakhapatnam) on 29.06.2022.
17. In the meanwhile, further demand was raised against the appellant
on account of motor vehicle tax for the quarters from 01.04.2022 to
30.06.2022 and from 01.07.2022 till 20.09.2022. Appellant prayed
for keeping in abeyance the demand during pendency of the appeal.
2304 [2025] 8 S.C.R.
Supreme Court Reports
However, appellate authority rejected the said prayer of the appellant
vide the order dated 27.08.2022 consequent whereupon, appellant
paid a further sum of Rs. 11,77,890.00 under protest.
18. Thereafter, appellant filed W.P. No. 6206 of 2022 before the High
Court assailing the order dated 14.06.2022 as well as the appellate
order dated 27.08.2022. The writ petition was contested by the
respondents by filing counter affidavit. Learned Single Judge vide
the judgment and order dated 13.06.2023 allowed the writ petition
by holding that appellant was plying its vehicles within the central
dispatch yard which is not a ‘public place’. Respondents were directed
to refund the amount of Rs. 22,71,700.00 to the appellant.
19. Aggrieved by the aforesaid judgment and order of the learned Single
Judge, respondents preferred a letters patent appeal before the
Division Bench of the High Court which was registered as Writ Appeal
No. 711 of 2023. Vide the judgment and order dated 19.12.2024,
Division Bench allowed the writ appeal and set aside the judgment
and order of the learned Single Judge.
20. It is against this judgment and order dated 19.12.2024 that the related
Special Leave Petition (Civil) No. 1547 of 2025 came to be filed. On
24.01.2025, this Court while issuing notice, stayed the operation of
the impugned judgment and order dated 19.12.2024 but clarified
that appellant would not be entitled to enforce the directions of the
learned Single Judge as contained in the judgment and order dated
13.06.2023.
21. Mr. Vijay Hansaria, learned senior counsel appearing for the appellant
submits that the issue involved in this case is with regard to liability
to pay motor vehicle tax under Section 3 of the A.P. Act, 1963.
Referring to Section 3, he submits that on a plain reading thereof it
is evident that a tax shall be levied on every motor vehicle if three
situations are satisfied:
(i) the tax is on a motor vehicle;
(ii) the motor vehicle is used or kept for use;
(iii) in a public place in the State.
21.1. Mr. Hansaria submits that the expression ‘in a public place’
is not only descriptive but also qualifies and limits both the
words ‘used’ and ‘kept for use’. Legislature has consciously
[2025] 8 S.C.R. 2305
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
fastened the liability to pay tax on a motor vehicle keeping
in mind that it is being used or kept for use in a public place;
liability to pay tax is not on ownership or registration. He,
therefore, submits that merely keeping a vehicle for use in
the State would not attract the liability to pay tax unless it is
used or kept for use in a ‘public place’.
21.2. Adverting to the expression ‘kept for use, in a public place’,
learned senior counsel submits that it means meant for use or
intended to be used in a ‘public place’. The motor vehicle must
be kept with the intention and purpose of using it in a ‘public
place’. Therefore, the primary determinant is the intention for
which the motor vehicle is kept. Negatively put, it means that
a motor vehicle which is not meant to be used or intended to
be used in a ‘public place’ would not attract the tax liability
under the A.P. Act, 1963.
21.3. He refers to Rule 12A of the Andhra Pradesh Motor Vehicles
Taxation Rules, 1963 (‘A.P. Rules, 1963’ hereinafter) and
submits that the said rule provides for the mechanism to seek
exemption from payment of tax in respect of motor vehicles
kept for use. He submits that Rule 12A does not use the
expression ‘kept for use in a public place’ but provides that a
motor vehicle shall be deemed to be kept for use unless the
registered owner of the motor vehicle or the person having
possession or control of the motor vehicle gives intimation
in writing to the licensing officer in advance that the motor
vehicle shall not be used after expiry of the period for which
tax has already been paid.
21.4. Further submission of learned senior counsel is that Rule 12A
has to be read in conjunction with Section 3. Read together,
there is no conflict between the two. However, if a view is
taken that Rule 12A is in conflict with Section 3 then the A.P.
Rules, 1963 being a subordinate piece of legislation cannot
travel beyond the primary legislation. Therefore, the mandate
of Section 3 will prevail over Rule 12A.
21.5. It is also submitted that the expression ‘public place’ is not
defined under the A.P. Act, 1963 but is traceable to Section 2(34)
of the Motor Vehicle Act, 1988 (briefly, ‘the M.V. Act’ hereinafter).
After referring to the above definition, learned senior counsel
2306 [2025] 8 S.C.R.
Supreme Court Reports
has taken us to the exemption application dated 07.12.2020
to contend that it is the clear case of the appellant that its
motor vehicles are plying inside the operational area only i.e.
within the enclosed premises of RINL, the corporate entity of
Visakhapatnam Steel Plant. The central dispatch yard situated
inside Visakhapatnam Steel Plant is evidently a restricted area
where the public is not allowed entry without prior permission.
The gates are guarded by CISF personnel. As such, central
dispatch yard cannot be treated as or deemed to be a ‘public
place’ as defined under Section 2(34) of the M.V. Act.
21.6. On a query by the Court, learned senior counsel submits that
appellant is not seeking exemption from payment of tax for
the entire period of registration of the vehicles; exemption has
been sought only for the limited period when the vehicles were
used exclusively within the enclosed premises of RINL which
is not a ‘public place’. He submits that the licensing authority
dismissed the exemption application of the appellant taking a
completely erroneous view that since RINL is a government
company, therefore, it is also a ‘public place’. This view is
wholly untenable and rightly interfered with by the learned
Single Judge. Placing reliance on a decision of a three-Judge
Bench of this Court in Bolani Ores Limited Vs. State of Orissa1,
learned senior counsel submits that learned Single Judge
rightly held that the central dispatch yard of RINL does not
constitute a ‘public place’ or a public road. Division Bench was
not at all justified in reversing such decision of the learned
Single Judge, that too, by erroneously placing reliance on a
two-Judge Bench decision of this Court in State of Gujarat Vs.
Akhil Gujarat Pravasi V.S. Mahamandal2. The issue regarding
taxability of motor vehicles not being used or kept for use in a
‘public place’ was not an issue in that case. He submits that
the interpretation given by the Division Bench would result in
a wholly incongruous situation, expanding the scope of the
tax much beyond what Section 3 contemplates.
21.7. Finally, learned senior counsel submits that the civil appeal
may be allowed and the impugned judgment and order of
1 (1974) 2 SCC 777
2 (2004) 5 SCC 155
[2025] 8 S.C.R. 2307
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
the Division Bench may be set aside, thereby restoring the
judgment and order of the learned Single Judge.
22. Learned State counsel Ms. Prerna Singh on the other hand submits
that appellant owns 36 vehicles and provides logistical support to
RINL on contractual basis. Appellant had paid quarterly road tax for
its 36 vehicles up to March 31, 2021.
22.1. On 07.12.2020, appellant wrote to the Regional Transport
Officer, Gajuwaka seeking exemption from payment of road
tax for vehicles operating within RINL premises. Appellant
again sought for exemption on 05.10.2021 contending that its
vehicles would not be used in a public place, further contending
that RINL premises was not a ‘public place’.
22.2. When demand for tax and penalty was raised by the Regional
Transport Officer, appellant paid the said amount.
22.3. Thereafter, appellant filed W.P. No. 6206 of 2022 before the
High Court for setting aside the demand of tax. Vide order dated
26.04.2022, High Court directed the Regional Transport Officer
to consider the request of the appellant. Pursuant thereto, a
hearing was held whereafter the request of the petitioner was
rejected by the Regional Transport Officer on 14.06.2022. It
was held that appellant was using vehicles in a ‘public place’,
receiving hiring charges from RINL. RINL being a government
funded body was a ‘public place’.
22.4. Appellant challenged the said order dated 14.06.2022 before
the appellate authority. However, the appellate authority
dismissed the appeal vide the order dated 27.08.2022 placing
reliance on Rule 12A. It was held that Rule 12A requires
complete non-use not merely non-use in a ‘public place’.
22.5. This order came to be assailed by the appellant before the
High Court in W.P. No.38285 of 2022 which was allowed by
the learned Single Judge vide the judgment and order dated
13.06.2023. Respondents were directed to refund the amount
of Rs. 22,71,700.00 to the appellant on the ground that RINL
premises was not a ‘public place’.
22.6. Aggrieved thereby, respondents herein preferred W.A. No. 711
of 2023. Division Bench of the High Court was of the view
2308 [2025] 8 S.C.R.
Supreme Court Reports
that the decision of this Court in Bolani Ores Limited (supra)
was distinguishable; rather, placed reliance on the decision of
this Court in Akhil Gujarat Pravasi V.S. Mahamandal (supra).
According to the Division Bench, liability to pay motor vehicle
tax is not contingent on actual use. Rule 12A of the A.P. Rules,
1963 creates a presumption that a motor vehicle is ‘kept for
use’ unless a written intimation of non-use is provided. Appellant
failed to provide such intimation. Therefore, judgment and
order of the learned Single Judge was reversed and the order
levying tax and penalty was upheld.
22.7. Learned counsel for the State submits that the Division
Bench of the High Court had rightly relied upon Akhil Gujarat
Pravasi V.S. Mahamandal (supra). She submits that actual
use of public roads is not a condition precedent for the levy
of motor vehicle tax. That apart, appellant had admitted that
though its vehicles would ply within the RINL premises, it
would incidentally use public roads outside the premises
within a radius of a few meters. Appellant had been collecting
hiring charges from RINL which included motor vehicle tax.
This would indicate that the burden of tax had shifted to the
consumer. Therefore, appellant would not be justified to seek
exemption. Relying on the decision of this Court in State of
Kerala vs. Aravind Ramakant Modawdakar3, learned counsel
submits that once a vehicle becomes liable for payment of
tax, the extent of use by the vehicle is not a decisive factor
for the purpose of levy of tax.
22.8. Learned counsel has placed heavy reliance on Rule 12A to
contend that the said provision creates a presumption that a
vehicle is deemed to be ‘kept for use’ and hence liable for
tax. This presumption is only rebutted if and when the owner
provides a written intimation of complete stoppage before
commencement of the next quarter. Appellant never submitted
intimation of stoppage as required under Rule 12A.
22.9. Finally, learned State counsel submits that impugned judgment
and order of the Division Bench has correctly decided the issue
3 (1999) 7 SCC 400
[2025] 8 S.C.R. 2309
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
and, therefore, there is no scope for interference. The appeal
being devoid of merit is liable to be dismissed.
23. Submissions made by learned counsel for the parties have received
the due consideration of the Court. Also, all the decisions cited at
the Bar have been considered.
24. At the outset, let us examine the relevant legal provisions. Entry 57
of List II covers the field of taxes on vehicles whether mechanically
propelled or not, suitable for use on roads, including tramcars subject
to the provisions of Entry 35 of List III, which is the concurrent list.
Entry 35 of the said list covers the field of mechanically propelled
vehicles including the principles on which taxes on such vehicles
are to be levied.
25. The Andhra Pradesh Motor Vehicles Taxation Act, 1963, already
referred to as the A.P. Act, 1963, is an Act to consolidate and amend
the law relating to levy of a tax on motor vehicles in the State of
Andhra Pradesh. Section 3 is the charging section. Heading of Section
3 is ‘levy of tax on motor vehicles’. Sub-section (1) of Section 3 is
relevant and the same reads thus:
Section 3: Levy of tax on motor vehicles:
(1) The Government may, by notification, from time to
time, direct that a tax shall be levied on every motor
vehicle used or kept for use, in a public place in the State.
25.1. From a reading of Section 3(1), it is evident that the government
i.e. the State Government may by notification direct that a tax
shall be levied on every motor vehicle used or kept for use in a
‘public place’ in the State. Focus of sub-section (1) of Section
3 is on the motor vehicle which is used or kept for use in a
‘public place’ in the State. We will deal with this aspect in a
more detailed manner at a subsequent stage.
26. Section 4 deals with payment of tax and grant of licence. Sub-section
(1)(b) of Section 4 entitles a person whose vehicle has not been
used during the period for which the motor vehicle tax has been
paid, to seek refund of the tax paid subject to such conditions as
may be specified by the State Government by way of a notification.
Sub-section (1)(b) of Section 4 is as follows:
2310 [2025] 8 S.C.R.
Supreme Court Reports
4. Payment of tax and grant of licence:
1(a) * * * * *
(b) Where the tax for any motor vehicle has been paid
for any quarter, half-year or year and the motor vehicle
has not been used during the whole of that quarter, half-
year or year or a continuous part thereof not being less
than one month, a refund of the tax at such rates as may,
from time to time, be notified by the Government, shall be
payable subject to such conditions as may be specified
in such notification.
27. Section 2 is the definition clause. Clause (j) of Section 2 says that
words and expressions used but not defined in the A.P. Act, 1963
shall have the meanings assigned to them in the Motor Vehicles Act.
28. The expression ‘public place’ appearing in sub-section (1) of Section
3 of the A.P. Act, 1963 has not been defined. Therefore, in terms of
Section 2(j), we will have to fall back upon the definition of ‘public
place’ as provided in Section 2(34) of the Motor Vehicles Act, 1988
which defines ‘public place’ in the following manner:
‘public place’ means a road, street, way or other place,
whether a thoroughfare or not, to which the public have
a right of access, and includes any place or stand at
which passengers are picked up or set down by a stage
carriage.
28.1. Thus, as per the aforesaid definition, ‘public place’ means a
road, street, way or other place, whether a thoroughfare or
not, to which the public have a right of access, and includes
any place or stand at which passengers are picked up or set
down by a stage carriage.
29. This brings us to the A.P. Rules of 1963. In exercise of the powers
conferred by Sections 2, 5, 6, 8, 11, 12 and 16 of the A.P. Act, 1963,
the aforesaid rules have been framed. While Rule 12 deals with
payment of tax and penalty, Rule 12A deals with liability for payment
of tax in respect of motor vehicles kept for use. Since respondents
have placed heavy reliance on Rule 12A, relevant portion thereof
i.e. upto the first proviso is reproduced hereunder:
[2025] 8 S.C.R. 2311
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
12A. Liability for payment of tax in respect of motor
vehicles kept for use:
For the purpose of Section 3 of the Act, a motor vehicle
shall be deemed to be kept for use and is liable to
tax unless the registered owner or the person having
possession or control of the motor vehicle intimates in
writing to the Licensing Officer before the commencement
of the quarter for which tax is due that the motor vehicle
shall not be used after expiry of the period for which tax
has already been paid. The Licensing Officer shall on
receipt of the intimation, acknowledge its receipt.
Provided that in the case of non-transport vehicles, if the
owner of the vehicle fails to submit the stoppage report
within the period specified above but subsequently gives
an affidavit with full details to the effect that the vehicle
was not in existence or that it was already disposed of
to another person and that he is no more in possession
of it, or that the tax in respect of the vehicle was paid
elsewhere in the same State or in some other State
and as such he is not liable for payment of tax in the
jurisdiction of that Licensing Officer or proves to the
satisfaction of the Licensing Officer that the vehicle has
not been used, it may be deemed that the vehicle has
not been kept for use.
29.1. As can be seen, Rule 12A is intended to give effect to Section
3. This is manifest from the opening words of Rule 12A that
it is for the purpose of Section 3. That apart, what Rule 12A
contemplates is that ordinarily the registered owner or the
person having possession or control of a motor vehicle is
bound to pay the motor vehicle tax with the exception that
if he informs the Licensing Officer before commencement of
the quarter for which tax is required to be paid that the motor
vehicle in question shall not be used after expiry of the period
for which the motor vehicle tax has been paid, then he will
not be required to pay the tax after expiry of the said quarter.
Therefore, mandate of Rule 12A is that if the registered owner
etc. intimates the Licensing Officer that he is not going to
operate the motor vehicle after expiry of the period for which
2312 [2025] 8 S.C.R.
Supreme Court Reports
he has paid the motor vehicle tax, he would not be required
to pay the motor vehicle tax thereafter. We will examine the
interplay between Section 3 and Rule 12A in more detail at
a subsequent stage.
30. Let us now deal with the decisions referred to by the High Court
and also cited at the bar.
31. The first case is that of Bolani Ores Limited (supra) in which a
three-Judge Bench of this Court considered the question as to
whether dumpers, rockers and tractors were motor vehicles within
the meaning of the relevant state motor vehicles taxation acts and
were accordingly taxable thereunder. It was in that context the Bench
examined the meaning of the expression ‘motor vehicle’ in terms of
Section 2(c) of the Bihar and Orissa Motor Vehicles Taxation Act,
1930, as amended, which had the same meaning as in the Motor
Vehicles Act, 1939. The Bench also considered as to whether the
subsequent amendment of the definition in Section 2(18) of the
Motor Vehicles Act,1939 by the Motor Vehicles (Amendment) Act,
1956 would govern the definition of ‘motor vehicle’ for the purpose
of the said Act. Section 6 of the aforesaid Act imposed on every
motor vehicle a tax at the rate specified in the Second Schedule to
the said Act. The question, therefore, was as to what would be a
‘motor vehicle’ for the purpose of the Bihar and Orissa Motor Vehicles
Taxation Act, 1930.
31.1. This Court also examined the definition of ‘public place’ as
appearing in Section 2 (34) of the Motor Vehicles Act in view of
Section 3 of the Bihar and Orissa Motor Vehicles Taxation Act
which mandated that no person shall drive a motor vehicle in
any ‘public place’ unless he holds an effective driving license
issued to himself authorizing him to drive the vehicle and no
person shall so drive a motor vehicle as a paid employee or
shall so drive a transport vehicle unless his driving license
specifically entitled him to do so. It was in the aforesaid context
that this Court examined the meaning of the expression ‘public
place’ and held as under:
A ‘motor vehicle’ under Section 2(18) has been defined
as “any mechanically propelled vehicle adapted for
use upon road….” Having regard to the context of
the definition of “public place” in Section 2(24) of the
[2025] 8 S.C.R. 2313
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
Act, the regulatory character of the Act, and the use
of the word ‘road’ used in a public Act, road would
mean a “public road” which word as already noticed
has been used in the Andhra Pradesh (Andhra Area)
Motor Vehicles Taxation Act. The word “public place”
has been defined in Section 2(24) as meaning “a road,
street, way or other place whether a thoroughfare or
not, to which the public have a right of access”. If the
public have no right of access to any place which is
not a road, street, way or thoroughfare it will not be
a public place. A motor vehicle which is not adapted
for use upon roads to which the public have no right
of access is not a motor vehicle within the meaning
of Section 2(18) of the Act.
31.2. This Court held that the words ‘public place’ would mean a
road, street, way or other place whether a thoroughfare or not
to which the public have a right of access. If the public have
no right of access to any place which is not a road, street,
way or thoroughfare it will not be a public place. Thus, the
expression ‘public place’ would mean a road, street, way or
other place whether a thoroughfare or not to which the public
have a right of access. If the public have no right of access,
it will not be a ‘public place’. In the facts of that case it was
found by the Bench that there was no public road within the
leasehold premises. No member of the public was allowed
to enter into the leasehold premises without due permission
obtained beforehand. They had check gates on the approach
road to the leasehold area. All the machines were within the
leasehold area and never outside it. However, it came on
evidence that there was no fencing or barbed wire around
the leasehold premises but this Court held that the mere fact
that there was no fence or barbed wire was not conclusive
that the leasehold premises were not enclosed premises. The
evidence indicated that the public were not allowed to enter
the leasehold area without prior permission. No unauthorized
person had access to the leasehold area. Therefore, this
Court held that dumpers and rockers though registrable under
the Motor Vehicles Act were not taxable under the Bihar and
Orissa Motor Vehicles Taxation Act, 1930 as long as they were
working solely within the premises of the respective owners.
2314 [2025] 8 S.C.R.
Supreme Court Reports
32. In Travancore Tea Estates Co. Ltd. Vs. State of Kerala4, a Division
Bench of this Court considered the question as to whether motor
vehicles used or kept for use within the tea estates and not intended
to be used on public roads of the State would be liable to pay motor
vehicle tax under the Kerala Motor Vehicles Taxation Act, 1963.
According to the appellant, it had purchased the motor vehicles
solely and exclusively for use in the tea estates and intended to be
used only for agricultural purposes; those were not used nor kept for
use in the State as contemplated under Section 3 of the aforesaid
Act. Appellant had eight tea estates contiguous to each other. This
Court agreed with the contention of the appellant that the tax was
only exigible on vehicles used or kept for use on public roads. If
the words ‘used or kept for use’ in the State are construed as used
or kept for use on the public roads of the State, the said Act would
be in conformity with the powers conferred on the State legislature
under Entry 57 of List II. If the vehicles were suitable for use on
public roads, they were liable to be taxed.
33. This brings us to the case of Akhil Gujarat Pravasi V.S. Mahamandal
(supra) heavily relied upon by the respondents. In that case, the
High Court of Gujarat declared Section 3A (1) and (2) of the Bombay
Motor Vehicles Tax Act, 1958 and also Rule 5 of the Bombay Motor
Vehicles Tax Rules, 1959 ultra vires and those were accordingly struck
down. Consequential mandamus was issued to the State authority
not to recover any tax in pursuant thereto from the vehicles of the
respondents (writ petitioners in the High Court) which were kept but
were not being used.
33.1. Section 3(1) of the Bombay Motor Vehicles Tax Act declares
that there shall be levied and collected on all motor vehicles
used or kept for use in the State, a tax at the rates fixed by
the State Government. Section 3A(1) and (2) of the aforesaid
Act reads as under:
3-A. (1) On and from the 1st day of April, 1991, there
shall be levied and collected on all omnibuses which
are used or kept for use in the State exclusively as
contract carriages (hereinafter in this section and
sub-section (1-A) of Section 4 referred to as ‘the
4 (1980) 3 SCC 619
[2025] 8 S.C.R. 2315
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
designated omnibuses’) a tax at the rates specified
in the table below:
TABLE
Description of designated Annual rate of tax
omnibuses
1. (a) Ordinary designated Rs 2700 per
omnibuses permitted to passenger permitted
be carried not more than to be carried.
twenty passengers.
(b) Ordinary designated Rs 4050 per
omnibuses permitted to be passenger permitted
carried more than twenty to be carried.
passengers.
2. (a) Luxury or tourist Rs 4050 per
designated omnibuses passenger permitted
permitted to be carried to be carried.
not more than twenty
passengers.
(b) Luxury or tourist Rs 6000 per
designated omnibuses passenger permitted
permitted to be carried to be carried.
more than twenty
passengers.
Provided that in the case of the designated omnibuses
used solely for the purpose of transporting students of
educational institutions in the State in connection with
any of the activities of such educational institutions a
tax shall be levied and collected under sub-section
(1) of Section 3, and not under this sub-section.
(2)(a) The tax leviable under sub-section (1) shall be
paid in advance by every registered owner or any
person having possession or control of the designated
omnibuses either annually at the annual rate specified
in the table appearing in sub-section (1) or in monthly
instalments of one-twelfth of the annual rate.
2316 [2025] 8 S.C.R.
Supreme Court Reports
(b) The annual payment of tax or the payment of
monthly instalment of tax shall be made within such
period and in such manner as may be prescribed.
33.2. In sum and substance what Section 3A(1) says is that there
shall be levied and collected on all omnibuses which are used
or kept for use in the State exclusively as contract carriages
a tax at the rate specified in the table.
33.3. Rule 5 of the Bombay Motor Vehicles Tax Rules, 1959 as
amended reads thus:
5. (1) A registered owner or any person who has
possession or control of a motor vehicle in respect of
which tax is paid in advance, not intending to use or
keep for use such vehicle in the State and desiring to
claim refund of tax on that account shall before the
commencement of the period for which the refund
of tax is to be claimed, make a declaration in Form
NT for any specified period not exceeding beyond
the period for which the tax is paid in advance to the
taxation authority in whose jurisdiction such vehicle
is to be kept under non-use along with the certificate
of taxation as well as certificate of fitness in case of
transport vehicles and a fee of rupees ten:
Provided that where a vehicle is rendered incapable
of being used or kept for use on account of an
accident, mechanical defect or any other sufficient
cause, which makes it impossible to give an advance
declaration as aforesaid then such declaration shall
be given within a period of seven days from the date
of occurrence of such accident, mechanical defect or
such other cause, either in person or by registered
post acknowledgement due.
(2) If the taxation authority is satisfied that the motor
vehicle, in respect of which a declaration in Form
‘NT’ has been made, has not been used, or kept for
use for the whole or part of the period mentioned in
the declaration, it shall certify that the motor vehicle
has not been used or kept for use for the whole or
[2025] 8 S.C.R. 2317
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
part of such period as the case may be by making an
endorsement in the certificate of taxation to that effect:
Provided that nothing contained in this sub-rule shall
affect the right of the taxation authority to recover
the tax and penalty due for the period of non-use
so certified if, at any time, it is found that the vehicle
was actually used or kept for use in the State during
such period.
* * *
(3) The declaration in Form ‘NT’ given under the
proviso to sub-rule (1) shall be accompanied by the
certificate of taxation and documentary evidence, if
any, or any other proof evidencing such non-use of the
vehicle and the period thereof. Where the appropriate
taxation authority, on considering the evidence
adduced, if any, and on making such inquiries as it
deems fit, refuses to admit the declaration of non-use
or to certify the period of non-use, it shall record in
writing its reasons therefor and communicate to the
applicant.
33.4. This Court noted that the main ground of challenge of the writ
petitioners was that Section 3A mandated payment of tax in
advance even though the vehicle may not at all be used. It
was noted that the incidence of tax was on omnibuses which
were used or kept for use in the State. Section 3A nowhere
uses the expression ‘used or kept for use on a public road’
in the State. It was in that context this Court held that if a
vehicle is used or is kept for use in the State it becomes
liable for payment of tax, in which event the actual use or
quantum of use is not material. On the above reasoning this
Court held that Section 3A and Rule 5 were intra vires and
were perfectly valid.
34. Thus, the decision rendered in Akhil Gujarat Pravasi V.S. Mahamandal
(supra) is on an entirely different issue; the challenge was to the
constitutional validity of Section 3A of the Bombay Act and Rule 5
of the Bombay Rules where the expressions ‘public place’ or ‘public
road’ are conspicuously absent. Whether a motor vehicle is used or
2318 [2025] 8 S.C.R.
Supreme Court Reports
kept for use in a ‘public place’ in the State and hence liable to pay
motor vehicle tax was not an issue in Akhil Gujarat Pravasi V.S.
Mahamandal (supra). On the contrary, the three-Judge Bench of this
Court in Bolani Ores Ltd. (supra) has categorically held that if the
public have no right of access to any place which is not a road, street,
way or thoroughfare, it will not be a ‘public place’. A motor vehicle
which is not adopted for use upon roads to which the public have
no right of access is not a motor vehicle. It was held that dumpers
and rockers would not be taxable as long as those were working
solely within the private premises of the respective owners. Bolani
Ores Ltd. (supra) is directly on the point in issue.
35. Reliance placed by the respondents upon Aravind Ramakant
Modawdakar (supra) is also totally misconceived inasmuch as in that
case, this Court held that once a vehicle becomes liable for payment
of tax, the extent and quantum of use of the vehicle is not a decisive
factor for the purpose of levy of tax. In the present case, that is not
the issue. The question is as to whether the vehicles of the appellant
are at all liable for payment of motor vehicle tax under Section 3 of
the A.P. Act, 1963 during the period when those vehicles were used
exclusively within the central dispatch yard of RINL?
36. Article 265 of the Constitution provides that no tax shall be levied
or collected except by authority of law. Thus, what Article 265
contemplates is that:
(i) there must be a law;
(ii) that law must authorize levy of tax; and
(iii) the tax has to be levied or collected so authorized.
37. Levy of tax has to be explicit. There cannot be exaction of tax by
implication or by following an interpretative process. It is trite law
that the charging section is the core of a taxing statute. Generally
speaking, a taxing statute has to be construed literally; this is more
so in the case of a charging section. Rowlatte J. had expressed
succinctly that in a taxing statute one has to look merely at what
is clearly said. There is no room for any intendment. There is no
equity about a tax. There is no presumption as to tax. Nothing is to
be read in, nothing is to be implied. Natural corollary to this is that
a subject is not to be taxed unless the words of the relevant taxing
statute unambiguously imposes the tax on him.
[2025] 8 S.C.R. 2319
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
38. In Commissioner of Customs Vs. Dilip Kumar5, this Court has held
that insofar taxation statutes are concerned, Court has to apply strict
rule of interpretation. Article 265 of the Constitution prohibits the
State from extracting tax from the citizens without the authority of
law. It is axiomatic that taxation statute has to be interpreted strictly
because the State at its whims and fancies cannot burden the citizens
without the authority of law. In other words, when the competent
legislature mandates taxing certain persons/ certain objects in certain
circumstances, it cannot be expanded/interpreted to include those,
which were not intended by the legislature.
39. Let us now turn to the facts of the present case.
40. Regional Transport Officer vide the order dated 14.06.2022 rejected
the claim of the appellant. Appellant was directed to pay the due
taxes at the earliest. Primary reason given for rejecting the claim of
the appellant is as under:
But, the petitioner himself informed that he is operating
his vehicles in the premises of RINL, which is situated in
the State of Andhra Pradesh. As per the contract between
the petitioner and RINL, the petitioner is receiving hire
charges, but he is not willing to pay motor vehicle tax that
is due to the government.
It is also to be noted that RINL, Visakhapathnam, is a
government company established with government funds
and it is also a public place, for that matter. It is to be noted
that the other companies that are executing the contract
at RINL, and operating their vehicles in the premises of
RINL, are paying motor vehicles tax, for their vehicles. It
is also to be noted the actual use or non-use of public
roads cannot be a ground for escaping liability.
Thus, it is established beyond reasonable doubt that the
vehicles of the petitioner-owner, are under use in the State
of Andhra Pradesh and hence, liable to pay applicable
motor vehicles tax.
5 (2018) 9 SCC 1
2320 [2025] 8 S.C.R.
Supreme Court Reports
40.1. Thus, according to the Regional Transport Officer, appellant
was operating his vehicles in the premises of RINL for which
he was receiving hire charges. RINL is a government company
established with government funds; and thus it is a ‘public
place’. Other companies executing the contract at RINL and
operating their vehicles in the premises of RINL are paying
motor vehicle tax for their vehicles. Actual use or non-use of
public roads cannot be a ground for escaping tax liability. He
held that vehicles of the appellant were being used in the State
of Andhra Pradesh and hence liable to pay the applicable
motor vehicle tax.
41. Appellate authority had affirmed the aforesaid view taken by the
original authority. That apart, appellate authority was of the further
view that appellant had been operating its vehicles at the premises
of Visakhapatnam Steel Plant during the relevant period. Rule 12A
contemplates that motor vehicles shall not be used at all if exemption
is sought. Registered owner had not filed the stoppage/non-use
intimation to the Licensing Officer in terms of Rule 12A. Thus, the
appellate authority relied upon Rule 12A to deny the claim of the
appellant.
42. Learned Single Judge held that motor vehicles of the appellant
were deployed within the central dispatch yard and with effect from
01.04.2021, all the motor vehicles stopped plying upon the public
roads; those were being used exclusively for the purpose of executing
the contract of the appellant without leaving the compound of the
central dispatch yard. In such a scenario, the subject vehicles were
not liable to be taxed and entitled to get exemption. As the central
dispatch yard is a restricted area with members of the public not
having access to enter the premises, such premises does not fall
within the ambit of ‘public place’ under Section 2(34) of the Motor
Vehicles Act. Relevant portion of the order of the learned Single
Judge is extracted hereunder:
20. On a perusal of the affidavit filed by the petitioner and
as well as material papers placed on record, it is clear
that the subject motor vehicles were deployed to Central
Deposit Yard premises and with effect from 01.04.2021,
all the motor vehicles have stopped plying upon the public
roads and were being used exclusively for the purpose of
[2025] 8 S.C.R. 2321
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
contract of the petitioner and were only plying inside the
Central Deposit Yard but did not leave the compound of
the Yard at any period of time. In such a case, the subject
vehicles are not liable to be taxed and such vehicles are
entitled to get exemption as contemplated in the Act. As
the Central Deposit Yard is highly restricted area with no
ordinary member of the public having any access to enter
the premises, the definition of ‘public place’ under Section
2 (34) of the Act would not apply to the above said Yard.
21. Even this Court, earlier W.P.No.6206 of 2022 was
disposed of by directing the respondents to consider the
representation of the company dated 07.12.2020 and
05.10.2021 for grant of exemption from payment of tax
upon the company producing all such material or evidence
necessary to demonstrate that the vehicles of the company
have not been used or kept for use on the public roads in
the State of Andhra Pradesh, after giving due opportunity
of hearing to the company, the respondents shall refund or
retain the amount collected from the company thereafter.
22. In the present case, though the petitioner has submitted
representations to the 3rd respondent on 25.05.2022
seeking for grant of exemption from payment of tax and
refund of Rs.22,71,700/- along with interest @ 6%, which
was rejected by the 3rd respondent vide order dated
14.06.2022 by stating that RINL is a Government company
therefore falls within the definition of ‘public place’, which
is admittedly contrary to the above referred findings given
by the Hon’ble Apex Court, High Court of Bombay, High
Court of Madras and High Court of Gujarat, the fact that
the petitioner is plying the vehicles in the Central Deposit
Yard premises itself proves that the premises does not
fall under the definition of ‘public place’ as under Section
2 sub Section (34) of the Act.
43. Division Bench did not agree with the view taken by the learned Single
Judge. Division Bench relied upon Rule 12A and held that the said
provision deems a motor vehicle to be kept for use and thus liable
to tax unless an intimation is given in writing by the owner/possessor
or the person in control of the vehicle that the motor vehicle shall
2322 [2025] 8 S.C.R.
Supreme Court Reports
not be used after expiry of the period for which tax has already been
paid. Division Bench held thus:
32. In our opinion, the view expressed by the learned Single
Judge is not totally in consonance with the mandate and
spirit of the judgment rendered in the case of Akhil Gujarat
Pravasi (supra). This judgment specifically mandates
that irrespective of whether a vehicle is in use or is not
in use or is in use occasionally or for a short duration,
the tax would be leviable. It has been held that there is
a presumption that wherever a certificate of registration
is current, it shall be deemed that such a vehicle is to be
used or kept for use in the State.
33. In the instant case. Rule 12A of the Andhra Pradesh
Motor Vehicle Taxation Rules, 1963, also envisages a
deeming provision, which specifically provides that a motor
vehicle shall be deemed to be kept for use and liable to tax
unless the registered owner or a person having possession
or control of the motor vehicle intimates in writing to the
licensing authority before the commencement of the quarter
for which the tax is due, that the motor vehicle shall not
be used after expiry of the period for which the tax has
already been paid.
34. On a conspectus of the constitutional provisions as
contained in Entry 57 of List II of the Seventh Schedule,
the judgments above and the provisions of the Act of 1963
and the Rules framed thereunder, it, therefore, is clear that
the liability to pay tax, which is compensatory in character
on account of the obligation of the State to maintain the
roads and to make such roads fit for user by all vehicle
owners, who own vehicles, ‘suitable for use on the roads’
is not dependent upon the actual user of such roads.
35. In fact, Rule 12A of the Rules which is not specifically
under challenge, deems a motor vehicle to be kept for use
and liable to tax unless an intimation is given in writing by
the owner/possessor or the person who controls the vehicle
that the motor vehicle shall not be used after expiry of the
period for which tax has already been paid.
[2025] 8 S.C.R. 2323
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
36. The proviso to the said Rule 12A, however, further
envisages that where an owner of a non-transport
vehicle fails to submit the stoppage report but proves to
the satisfaction of the licensing officer that the vehicle
has been used, it may be deemed that the vehicle has
not been kept for use. Rule 12A therefore envisages a
‘stoppage report’ or a ‘non-use report’ which cuts across
the barriers of private and public spaces as regards user
of such vehicles.
Thus, the argument that the user of the vehicles in a
premises such as the CDY in the Visakhapatnam Steel
Plant, which is not a public place, would entitle the petitioner
to seek exemption from payment of tax. goes contrary to
Rule 12A, which specifically envisages a total stoppage of
the user of the vehicle liable to be taxed, in our opinion,
is without merit.
44. From a conspectus of the pleadings, relevant legal provisions and
judicial pronouncements, the core issue which calls for adjudication in
the present appeal is whether the premises of Visakhapatnam Steel
Plant where appellant’s vehicles are exclusively used for handling
and storage operations, constitute a ‘public place’ under the A.P.
Act, 1963? Corollary to the above, is the issue as to whether such
vehicles are liable to pay tax under Section 3 of the A.P. Act, 1963
or entitled to exemption therefrom?
45. We have already extracted Section 3 and Rule 12A. Section 3 is the
charging provision. It authorizes the State Government to impose
tax on motor vehicles. The taxable event under Section 3 is when
a vehicle is used or kept for use in a ‘public place’ in the State.
Therefore, the tax is on the user or intendment for use of motor
vehicle in a ‘public place’. Thus, if a vehicle is actually used in a
‘public place’ or kept in such a way that it is intended to be used
in a ‘public place’ then the tax liability accrues. We have already
noted that this Court in Bolani Ores Limited (supra) has held that
when the members of the public are not allowed access inside an
area without prior permission and when there is check on ingress
and egress to ensure that no unauthorized person have access to
the premises, the same would be an enclosed premise and not a
‘public place’.
2324 [2025] 8 S.C.R.
Supreme Court Reports
46. Motor vehicle tax is compensatory in nature. It has a direct nexus
with the end use. The rationale for levy of motor vehicle tax is that a
person who is using public infrastructure, such as, roads, highways
etc. has to pay for such usage. Legislature has consciously used
the expression ‘public place’ in Section 3. If a motor vehicle is not
used in a ‘public place’ or not kept for use in a ‘public place’ then the
person concerned is not deriving benefit from the public infrastructure;
therefore, he should not be burdened with the motor vehicle tax for
such period.
47. Coming to Rule 12A, we find that there is omission of the expression
‘public place’ in the said rule. Opening words of the said rule are:
‘for the purpose of Section 3 of the Act’. Thus, the purpose of Rule
12A is to give effect to Section 3. It is trite law that a rule cannot
traverse beyond the scope and ambit of the parent statute. Rule 12A
has to be interpreted in such a way so as to be in sync with Section
3. Question is not of the motor vehicle being deemed to be kept for
use and hence liable to tax. Requirement of law is that the motor
vehicle should be used or kept for use in a ‘public place’. When
admittedly the motor vehicles of the appellant were confined for use
within the RINL premises which is a closed area then question of the
vehicles being used or kept for being used in a ‘public place’ does
not arise. In the ultimate analysis, the core of the controversy lies in
interpretation of Section 3. Rule 12A, as already discussed above,
has to be read to give effect to the charging section. Therefore, the
words appearing in Rule 12A i.e. ‘a motor vehicle shall be deemed
to be kept for use’ has to be read as ‘a motor vehicle deemed to be
kept for use in a public place’.
48. Another way of looking at Rule 12A is that intimation in writing to the
Licensing Officer would be required only when there is stoppage of
user of the motor vehicle, be it in a ‘public place’ or in any other place.
Such a requirement would therefore not be attracted in a case like
the present one where the contention is that the motor vehicles of
the appellant were not being used or kept for use in a ‘public place’.
49. That apart, there is the provision of Section 4(1)(b) which enables
a person whose motor vehicle was not used during the period for
which the motor vehicle tax has been paid to seek refund.
50. In the instant case, the motor vehicles in question were used or kept
for use only within the restricted premises of RINL which is not a
[2025] 8 S.C.R. 2325
M/s Tarachand Logistic Solutions Limited v.
State of Andhra Pradesh & Ors.
‘public place’. Therefore, the said vehicles are not liable to be taxed
for the period the said vehicles were used or kept for use within the
restricted premises of RINL. Argument of the respondent that appellant
had not intimated non-use of the motor vehicles in terms of Rule 12A
does not carry much persuasion in view of what we have discussed
supra. Thus, even in the absence of any intimation in terms of Rule
12A, motor vehicles of the appellant cannot be subjected to motor
vehicle tax for the period those were used or kept confined within
the restricted premises of RINL.
51. For the reasons mentioned above, impugned judgment and order
dated 19.12.2024 passed by the Division Bench of the High Court
in Writ Appeal No. 711 of 2023 is set aside. Consequently, the
judgment and order of the learned Single Judge dated 13.06.2023
passed in Writ Petition No. 38285 of 2022 is hereby restored. Appeal
is accordingly allowed. However, there shall be no order as to cost.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Divya Pandey
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