Road Tax Exempted for Hybrid Vehicles: Allahabad HC Orders Refund Without Interest Post-Govt Policy Shift [Read Order]
The petitioner's previously paid tax was no longer necessary in light of the newly granted exemption, acknowledging the importance of this official policy change
![Road Tax Exempted for Hybrid Vehicles: Allahabad HC Orders Refund Without Interest Post-Govt Policy Shift [Read Order]](https://images.taxscan.in/h-upload/2025/06/24/2053943-site-img-36.webp "Road Tax Exempted for Hybrid Vehicles: Allahabad HC Orders Refund Without Interest Post-Govt Policy Shift [Read Order]")
The Allahabad High Court has directed the Uttar Pradesh state authorities to refund road tax collected from a hybrid vehicle owner, following the government's decision to exempt such vehicles from road tax.
The Division Bench comprising Justices Siddharth and Harvir Singh, however, clarified that no interest would be payable on the refunded amount.
Planning smarter for FY 2025–26? Don’t miss this trusted guide used by thousands of tax professionals & CA students! Click here
The petitioner, Anjana Agarwal had approached the Court challenging the imposition and collection of road tax on her hybrid electric vehicle.
During the course of the proceedings, the Additional Chief Standing Counsel appearing for the State Government submitted that the State had recently on June 28, 2024 formally taken a policy decision to grant exemption from road tax to various categories of hybrid electric vehicles. These include hybrid electric vehicles, strong hybrid electric vehicles, plug-in hybrid electric vehicles, series hybrid electric vehicles, and series-parallel hybrid electric vehicles.
The Court noted that the petitioner's previously paid tax was no longer necessary in light of the newly granted exemption, acknowledging the importance of this official policy change. Considering this, it is evident that the petitioner's road tax payment was exempt, the Bench noted.
Accordingly, the Court directed the respondent authorities to refund the entire road tax amount collected from the petitioner. The refund is to be made within a period of six weeks from the date of the order. The Bench, however, categorically stated that no interest shall be payable to the petitioner on the refunded sum.
The Court’s direction denying interest on the refunded amount indicates a balance between public interest and administrative practicality.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
