Public Place & Private Use – SC clarifies vehicle tax exemption

 

 

Judgment dated 29.8.2025 of the Supreme Court of India in Civil Appeal No.11188 of 2025 of M/s. Tarachand Logistic Solutions Limited   Vs.   State of Andhra Pradesh and others

Expression “kept for use in a public place” for MV tax excemption

The appellant is the owner of various motor vehicles used as heavy lifting equipments.  It was awarded contract for handling and storage of iron and steel materials within the central dispatch yard premises of Visakhapatnam Steel Plant.   The appellant had deployed 36 vehicles for the said works.  They were stopped plying on the public roads.

The appellant had sought for exemption from motor vehicle tax as per Section 3 of the Andhra Pradesh Motor Vehicle Taxation Act, 1963.

However, the appellant was asked to pay the tax of Rs.22,71,700 and threatened to seize all the vehicles.   The appellant paid the said tax under protest.

Rule 12A of the AP Motor Vehicles Taxation Rules, 1963, provides for exemption.

HELD that a motor vehicle which is not meant to be used or intended to be used in a public place would not attract MV tax liability under the AP Act, 1963.

Motor Vehicles are not taxable so long as they are working solely within the premises of the respective owners.

HELD that if a motor vehicle is actually used in a public place or kept in such a place that it is intended to be used in a public place then the tax liability accrues. MV Tax is compensatory in nature.   It has a direct nexus with the end use.

In the instant case, he Central Dispatch Yard situated in the Steel Plant is restricted area where the public is not allowed entry without prior permission.   The gates are guarded by CISF personnel. The motor vehicles were used or kept for use only within the restricted premises of Steel Plan which is not a public place.  Therefore, it cannot be treated as public place under section 2(34) of the MV Act.  As a result, the said vehicles are not liable to be taxed for the period of use in the restricted premises.

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 the Steel Plant.