[APMV Act] Vehicles Which Are Not Plying On Public Roads & Are Only Plying Inside Central Deposit Yard Are Exempted From Tax: Andhra Pradesh HC

Finding that the Petitioner (Dealer/Taxpayer) is plying the vehicles in the Central Deposit Yard premises itself proves that the premises do not fall under the definition of “public place” as under Section 2(34) of the Andhra Pradesh Motor Vehicles Taxation Act, the Andhra Pradesh High Court directed the Respondents (Commercial tax department) to refund an amount of Rs.22,71,700/- to the Petitioner.

“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 point 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”, observed a Single Judge Bench of Justice V. Sujatha.

Advocate Jyothi Ratna Anumolu appeared for the Petitioner before the High Court.

In this case, the petitioner company, engaged in the business of providing logistics support since 1985, was awarded with a contract for Handling and storage of Iron and Steel Material at Central Dispatch Yard situated inside of Visakhapatnam Steel Plant. In furtherance of the terms and conditions of the contract, the petitioner commenced to deploy 36 vehicles and had paid the Motor Vehicle Tax and attained Fitness Certificate, Insurance Certificate and Pollution Under Control Certificate. Upon allotment of the contract, the motor vehicles in batches were deployed to Central Deposit Yard premises and were to only inside the Central Deposit Yard premises and not leave the compound at any point of time till the end of the contract for any other use. While the matter being so, the petitioner had intimated the first respondent regarding ‘non-use’ of the motor vehicles on public roads and requested exemption from payment of tax as the motor vehicles were no longer plying on public roads. However, after inspecting the motor vehicles, the fourth respondent raised a demand of Rs.7,37,960/- without disclosing calculation how the tax and penalty arrears were raised in the demand notice.

In pursuance of the same, the petitioner has paid a total sum of Rs.22,71,700/- towards Motor Vehicle Tax under protest, as seizure of the vehicles would cause irreparable, consequential loss resulting the halting of RINL operations itself. Thereafter, the petitioner sought for refund of the amount paid under protest on the ground that the demand order has been passed without providing any reasonable opportunity to the petitioner and without conducting any assessment proceedings and a reasoned order under Section 6 of the A.P.M.V. Act. Since no heed was paid to this request, the petitioner had approached the High Court.

After considering the submission, the Bench observed that 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 APMV Act would not apply to the said Yard.

“Even this Court, earlier W.P.No.6206 of 2022 has 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 for payment of tax upon the company producing all such material or evidence necessary to demonstrate that the vehicles of the company have not been use or kept for use on the public roads in the State of Andhra Pradesh”, added the Bench.

The Bench further found that though the petitioner has submitted representations seeking for grant of exemption from payment of tax and refund, the same was rejected by stating that RINL is a government company and therefore falls within the definition of ‘public place.'

Accordingly, the High Court allowed the petition.

Cause Title: Tarachand Logistics Solutions Limited v. State of Andhra Pradesh

Click here to read/download the Order