Jaipur: The Rajasthan High Court has quashed the road tax demands raised on private cars and jeeps registered in other states, holding that the levy was illegal because the state never issued the statutory notification required before such vehicles can be taxed. A Division Bench of Chief Justice Sanjay K. Agrawal and Justice Sameer Jain delivered the judgment on November 2, allowing a batch of about 90 writ petitions and ordering that any tax recovered from the petitioners be refunded within 30 days of their producing a copy of the judgment.
Source: IANS
The lead petition was filed by Harpy Core Network India Private Limited, the owner of a Haryana-registered private car that was stopped by a Motor Vehicle Inspector's flying squad in Jaipur, challaned for running without Rajasthan tax and impounded. The company was asked to deposit Rs 6,78,274 (yaani about Rs 6.78 lakh) for the vehicle's release. The court quashed the challan and the letter dated March 17, 2025 issued against the vehicle, and the ruling applies to the entire batch of petitions.
Source: Pink City Post
The Bench held that Section 4(1)(c) of the Rajasthan Motor Vehicles Taxation Act, 1951 is the provision that governs vehicles registered outside the state and using its roads, and that it operates only through a notification prescribing the tax rates. The state has issued such notifications for goods and passenger vehicles, but placed nothing on record for private cars. The notification dated July 10, 2024, relied on by the government, was issued for one-time tax on non-transport vehicles under a different provision and does not meet the requirement of Section 4(1)(c), the court held. "In absence of notification prescribing rates of tax payable by those vehicle owners falling within the mischief of provisions contained in Rule 28(1)(i) of the Rules of 1951, levy of road tax would be unauthorized under the law," the Bench said, invoking Article 265 of the Constitution, under which no tax can be levied or collected except by authority of law.
Source: LawChakra
The Transport Department had argued that the vehicles had been kept and used in Rajasthan beyond the 30 days permitted under Rule 28 of the Rajasthan Motor Vehicles Taxation Rules, 1951, and were therefore liable to one-time tax. The petitioners, whose vehicles were registered in states including Haryana, Delhi, Punjab, Gujarat, Uttar Pradesh and Madhya Pradesh, submitted that lifetime road tax had already been paid in their home states at the time of registration, and that flying squads had intercepted the vehicles during routine inspections and begun enforcement proceedings without a legal basis.
The court noted that Rule 28 itself exempts out-of-state private vehicles for their first 30 days in Rajasthan without any application, and that the Act lays down a process of hearing and a reasoned computation before any tax can be enforced. It directed the Transport Department to release the seized vehicles immediately and refund the tax collected from the petitioners within 30 days. Invoking the state's own welcome slogan, the Bench wrote that "the true grandeur of Rajasthan lies not in the barriers it erects, but in the doors it opens."
What happens next: the judgment does not permanently exempt out-of-state private cars from Rajasthan tax. The court recognised the state's power to tax such vehicles within statutory and constitutional limits — but only after it issues a proper rate notification under Section 4(1)(c). Until then, demands raised on the basis of the July 2024 notification cannot be enforced against private non-transport cars registered in other states.