📷 Image: Wikimedia Commons / Shiraz Husain
Business
Rajasthan High Court rules tax on out-of-state private vehicles illegal
✍️ The Hawk
🗓 04 Nov 2026, 04:32 AM
👁 12
The Rajasthan High Court has declared that levying tax on private vehicles registered outside the state is unlawful, overturning earlier fee collections.
The Rajasthan High Court, sitting in Jaipur, delivered a landmark judgment that the state cannot impose a tax on private vehicles whose registration lies outside Rajasthan. The bench held that such levies lack statutory backing and violate the constitutional principle of free movement of goods and persons across state borders.
The ruling came after a petition filed by a group of vehicle owners challenging the state's practice of collecting a periodic fee at entry points. The court examined the relevant provisions of the Motor Vehicles Act and concluded that the state government had exceeded its authority.
Following the decision, the court directed the Rajasthan Transport Department to cease all collection activities and to refund any amounts already paid by affected owners. The department has been asked to submit a compliance report within 30 days.
Legal experts say the verdict could have broader implications for other states that impose similar charges on out-of-state vehicles, potentially prompting a re‑examination of inter‑state tax policies nationwide.
The ruling came after a petition filed by a group of vehicle owners challenging the state's practice of collecting a periodic fee at entry points. The court examined the relevant provisions of the Motor Vehicles Act and concluded that the state government had exceeded its authority.
Following the decision, the court directed the Rajasthan Transport Department to cease all collection activities and to refund any amounts already paid by affected owners. The department has been asked to submit a compliance report within 30 days.
Legal experts say the verdict could have broader implications for other states that impose similar charges on out-of-state vehicles, potentially prompting a re‑examination of inter‑state tax policies nationwide.