Supreme Court Excludes Private Premises from 'Public Place' for Motor Vehicle Tax Liability

The Supreme Court while hearing the matter in case of Ms. Tarachand Logistic Solutions Limited v. State of Andhra Pradesh & Ors., in Civil Appeal No. 11188 of 2025, delivered an important judgment which clarifies on the motor vehicle tax on vehicle exclusively operating within private, challenging the judgment of Andhra Pradesh High Court.

The Apex Court held that restricted private premises are exempt from motor vehicle tax. The appellant herein has 36 vehicles which are used solely within the Visakhapatnam Steel Plant's central dispatch yard—a restricted area with no public access—were deemed not liable for tax.

On the 'Principle of Strict Interpretation of Taxing Statutes' the Apex Court that the charging sections must be interpreted strictly and literally. No tax can be levied by implication, and the burden of proof is on the State to show that the words of the statute unambiguously impose the tax.

The Apex Court emphasized that tax liability under Section 3 of the A.P. Motor Vehicle Taxation Act, 1963, arises only when a vehicle is "used or kept for use, in a public place in the State". Reaffirming the definition from the Motor Vehicles Act, 1988, the Court reiterated that a "public place" is one "to which the public have a right of access", and since the central dispatch yard restricts public entry, it does not qualify as a public place.

Supreme Court also clarified that Rule 12A of the A.P. Rules, 1963, regarding intimation of non-use, must be read in consonance with Section 3, implying "kept for use in a public place". The ruling, relying heavily on the Bolani Ores Limited precedent, underscores the compensatory nature of motor vehicle tax, linking it to the use of public infrastructure.

Coram: Justice Manoj Misra and Justice Ujjal Bhuyan.