The Supreme Court has ruled in favor of M/s Tarachand Logistic Solutions Ltd., holding that its vehicles used exclusively inside the restricted premises of Visakhapatnam Steel Plant (RINL) are not liable to pay road tax under the Andhra Pradesh Motor Vehicles Taxation Act, 1963.
Case Background
Tarachand Logistic Solutions, engaged in logistics and heavy equipment services since 1985, was awarded a contract by RINL in 2020 for handling iron and steel materials at its central dispatch yard. The company deployed 36 heavy vehicles, which operated only within the enclosed premises of the yard from April 2021 onwards.
The company argued that since these vehicles never used public roads, they should be exempted from motor vehicle tax. Despite this, the Transport Department raised a demand of ₹22.71 lakh, which the company paid under protest. Later, further demands were raised, leading Tarachand to approach the High Court.
- A Single Judge of the Andhra Pradesh High Court agreed with the company, ruling that the central dispatch yard was not a public place and directing the State to refund the tax.
- However, a Division Bench later overturned this decision, stating that the vehicles were “kept for use” under Rule 12A of the A.P. Motor Vehicles Taxation Rules and hence taxable.
The apex court, led by Justices Ujjal Bhuyan and Manoj Misra, disagreed with the Division Bench and restored the Single Judge’s order.
The Court highlighted:
“If the public have no right of access to a place, it cannot be termed a ‘public place’. Vehicles used only within the restricted premises of RINL are not liable to motor vehicle tax.”
It further clarified that the tax liability arises only when a vehicle is used or kept for use in a public place, not simply because it is registered.
On Rule 12A, the Court stated:
“Rule 12A must be read in harmony with Section 3 of the Act. Even without an intimation of stoppage, vehicles not used in a public place cannot be subjected to tax.”
The Supreme Court set aside the Division Bench’s order dated December 19, 2024, and restored the Single Judge’s ruling dated June 13, 2023, thereby allowing the appeal of Tarachand Logistic Solutions.
The company is now entitled to claim exemption for the period its vehicles were confined within RINL premises.
Case Name: M/s Tarachand Logistic Solutions Ltd. vs. State of Andhra Pradesh & Others
Case Type: Civil Appeal (Arising out of SLP (Civil) No. 1547 of 2025)
Civil Appeal No.: 11188 of 2025
Judgment Date: 29 August 2025
