M/s. Tarachand Logistic Solutions Limited vs The State of Andhra Pradesh & Ors.

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 11188 OF 2025 (ARISING OUT OF SLP (CIVIL) NO. 1547 OF 2025)

M/S. TARACHAND LOGISTIC SOLUTIONS LIMITED APPELLANT(S) VERSUS

STATE OF ANDHRA PRADESH & ORS. RESPONDENT(S)

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 Signature Not Verified Digitally signed by Pradesh at Amravati (‘High Court’ for short) in Writ Appeal babita pandey Date: 2025.08.29 15:30:45 IST

No. 711/2023.

Reason:

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.

2

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.

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

3 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,

4 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

5 respondents to consider the prayer of the 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

6 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.

However, appellate authority rejected the said prayer of the

7 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.

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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

9 limits both the words ‘used’ and ‘kept for use’. Legislature has

consciously 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

10 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

11 M.V. Act’ hereinafter). After referring to the above definition,

learned senior counsel 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 12 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.

1 (1974) 2 SCC 777 2 (2004) 5 SCC 155 13 21.7. Finally, learned senior counsel submits that the

civil appeal may be allowed and the impugned judgment and

order of 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.

14 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

15 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 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

16 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

3 (1999) 7 SCC 400 17 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 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.

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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.

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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:

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.

20

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

21 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:

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 22 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

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.

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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’

24 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 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

25 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 26 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.

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

4 (1980) 3 SCC 619 27 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 28 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 designated omnibuses’) a tax at the rates specified in the table below:

TABLE

Description of designated Annual rate of tax omnibuses

29

1. (a) Ordinary designated Rs 2700 per omnibuses permitted to be passenger permitted 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 not to be carried. more than twenty passengers.

(b) Luxury or tourist Rs 6000 per designated omnibuses passenger permitted

permitted to be carried more to be carried.

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 30 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.

(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

31 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 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

32 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

33 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

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

34 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.

35 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.

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

5 (2018) 9 SCC 1 36 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

37 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.

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 38 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: 39

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 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.

40

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 not be used

after expiry of the period for which tax has already been paid.

Division Bench held thus:

41

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 42 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.

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.

43

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 44 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’.

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

45 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

46 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 ‘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.

47

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.

……………………………J. [MANOJ MISRA]

……………………………J. [UJJAL BHUYAN] NEW DELHI;

AUGUST 29, 2025.

48