SC Rules: No Vehicle Tax If Not Driven on Road

New Delhi (The Uttam Hindu): The Supreme Court has given a big and clear decision regarding motor vehicle tax, which can provide relief to lakhs of vehicle owners. The Supreme Court has said in its order that if a person is not using his vehicle on the road, highway or any other public place, then he is not obliged to pay motor vehicle tax.

A bench of Justice Manoj Mishra and Justice Ujjwal Bhuiyan has given this decision on a case related to Rashtriya Ispat Nigam Limited (RINL). RINL gave this order while hearing a petition filed against a December 2024 decision of the Andhra Pradesh High Court. In fact, about 36 vehicles run inside one of RINL's closed campuses, which never come on public roads.

During the hearing, the Supreme Court said, “Paying motor vehicle tax is mandatory, but it is for those who use public infrastructure like roads and highways.”

The court clarified that the RINL campus is enclosed on all sides and is a private property, not a “public place”. Hence, motor vehicle tax cannot be levied on vehicles plying inside the campus.

The Supreme Court upheld the decision of the Andhra Pradesh High Court, which ordered the state government to refund Rs 22,71,700 collected as tax from RINL. This decision has made it clear that tax can be collected only on those vehicles which are used in public places. This decision will set a precedent for large industrial units, mines and private townships.