Supreme Court on Compensatory Nature of Motor Vehicle Tax – 2025 Judgment
Supreme Court on Compensatory Nature of Motor Vehicle Tax – 2025 Judgment
The Hon’ble Supreme Court in M/s. Tarachand Logistic Solutions Limited v. State of Andhra Pradesh (Neutral Citation: 2025 INSC 1052) observed that:
“.......... 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. ..........”
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