No 4(1)(c) Notification, No Road Tax on Out-of-State Cars

No Section 4(1)(c) Notification, No Tax: Rajasthan High Court Quashes Road-Tax Demand on Out-of-State Private Cars

Published: 3 November 2026 · NyayVidhan

A Division Bench of the Rajasthan High Court held that Rajasthan cannot tax private cars registered in other States without a notification under Section 4(1)(c) of the Rajasthan Motor Vehicles Taxation Act, 1951 prescribing the rate, and that the notification of 10 July 2024 does not meet that requirement (paras 19, 31-32, 38). Deciding 90 writ petitions together, it quashed the lead challan and ordered refunds within 30 days (paras 2, 39-40).

Key holdings

Clauses (b) and (c) of Section 4(1) operate in distinct fields: (b) covers non-transport vehicles registered in Rajasthan, (c) vehicles registered outside the State (paras 19, 30).

A levy under Section 4(1)(c) depends on a notification prescribing the rate; none has been issued for private non-transport vehicles (paras 19, 31, 38).

The notification of 10 July 2024, including its proviso (iv) on vehicles registered outside the State, does not satisfy Section 4(1)(c) (paras 27, 32, 38).

Rule 28 cannot create a tax liability on its own, though it wholly exempts such cars for their first 30 days in Rajasthan (paras 24, 36).

Judgment digest by NyayVidhan: a summary of the court's judgment, not its text. The judgment itself is the authoritative version.

Brief Facts

The lead petitioner, a company, owns a private non-transport car registered in Haryana, on which lifetime tax had been paid in Haryana (paras 3, 39). A Motor Vehicle Inspector's flying squad intercepted the car in Rajasthan and issued a challan for running it without paying Rajasthan tax; a letter of 17 March 2025 followed, the car was impounded and Rs 6,78,274 was demanded for its release (paras 3-4). The State said the out-of-State vehicles in the batch had been kept in Rajasthan beyond the 30 days allowed by Rule 28 and were taxable under Section 4(1)(b) at the rates in the notification of 10 July 2024 (paras 5-8). Eighty-nine similar petitions were heard with it (para 2).

Court's Findings

Under Article 265, no tax can be levied without authority of law: the statute must fix the taxable subject, the person liable and the rate, and if the rate must be notified, no levy survives without the notification (paras 13-16). Section 4(1)(b) applies to non-transport vehicles registered in Rajasthan; out-of-State vehicles fall under the separate charging clause, Section 4(1)(c), which operates only through a notification prescribing the rate (paras 18-19). Rule 28 cannot independently create a tax liability, because a rule cannot enlarge the charging provision (para 24). The 10 July 2024 notification essentially sets rates for Section 4(1)(b) cases; notifications under Section 4(1)(c) exist for goods and passenger vehicles, but the State produced none for private cars (paras 27, 31). So the levy, seizure and demand were unconstitutional (para 32). Rule 28 wholly exempts such cars for the first 30 days, and the exemption is self-operative (para 36). Invoking 'Padharo Mahare Desh', the Court said every visitor should meet welcome, not an impediment unsupported by law (para 28).

Legal Principle

Article 265 requires a valid charge and a rate fixed in the manner the statute prescribes. Rajasthan can tax private cars registered in other States only at rates notified under Section 4(1)(c) of the Rajasthan Motor Vehicles Taxation Act, 1951; Section 4(1)(b), Rule 28 or a Section 4(1)(b) notification cannot supply that charge (paras 13, 19, 24, 27, 31).

NyayVidhan's view · Practice note

Why It Matters

For cars registered in other States, the judgment turns on a missing rate notification, not on how long the car stayed in Rajasthan. The Court found no notification under Section 4(1)(c) for private non-transport vehicles and held that the 10 July 2024 notification cannot fill that gap, so the lead challan was quashed with a refund due within 30 days, and the ruling applies mutatis mutandis to all 90 petitions (paras 31-32, 38-40). It does not rule out a future levy: taxing such cars needs an appropriate Section 4(1)(c) notification (para 31). Compare Sita Devi Educational Society, where the High Court held that executive instructions cannot impose pecuniary penalties that the parent Act and Rules do not provide.

Editorial comment by the NyayVidhan Editorial Desk. It is not part of the Court's judgment and is not legal advice.

Precedents Relied Upon

Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667
Relied Upon Discussed at ¶ 13, 14, 19
Noticed for the Article 265 requirement that a taxing statute must clearly convey the subject of the tax, the person liable and the rate, and that any ambiguity in these ingredients means there is no tax in law (para 14); applied in holding that no levy survives without the notified rate (paras 13, 19).
Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla & Ors. (1992) 3 SCC 285
Relied Upon Discussed at ¶ 15
Cited for the rule that there is no room for intendment in fiscal legislation: a specific provision is indispensable and nothing is to be read in or implied (para 15).
Consumer Online Foundation & Ors. v. Union of India & Ors. (2011) 5 SCC 360
Relied Upon Discussed at ¶ 16
Cited for the holding that a levy without the prescribed rate, or not prescribed in the manner required by law, offends Article 265 (para 16).

View all precedents (6)

Bimal Chandra Banerjee v. State of Madhya Pradesh 1970 (2) SCC 467
Relied Upon Discussed at ¶ 20, 24
Cited for the rule that no tax can be imposed by a bye-law, rule or regulation unless the parent statute specifically authorises the imposition (para 20); the Court then held that Rule 28 cannot independently create a tax liability (para 24).
Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan & Ors. 1962 SCC OnLine SC 21
Referred To Discussed at ¶ 21
A seven-Judge Constitution Bench decision, noted as reproducing Section 4 of the Rajasthan Motor Vehicles Taxation Act as the charging provision and making clear that no vehicle may be used or kept in Rajasthan unless tax at the appropriate rate in the statutory scheme is paid (para 21).
M/s. Tarachand Logistic Solutions Limited v. State of Andhra Pradesh & Ors. 2025 SCC OnLine SC 1851
Relied Upon Discussed at ¶ 24, 25
Cited for the holding that subordinate legislation cannot travel beyond or conflict with the parent charging provision (para 25), following the Court's statement that a rule cannot enlarge the charging provision (para 24).