Automatic License Plate Recognition (ALPR)is used in Intelligent Transportation systems wherein they are deployed for automatic ticketing of vehicles at car parking area, tracking vehicles during traffic signal violations and related applications. Out of the three major modules of ALPR systems, namely 1. localization of license plate from vehicle image, 2. segmentation of the characters images from the localized license plate and 3.Recognition of segmented characters images as license plate number, localization of potential license plate from the vehicle images is the most challenging task due to the huge variations in size, shape, color, texture and spatial orientations of license plate regions in such images. LP Localization fails often due to the presence of complex background and non-uniform illumination of license plate due to varying lighting conditions. In this paper, we propose a smart, simple and efficient algorithm for Indian license Plate Localization using Top Hat Transformation, which suppresses the background of image and remove the non uniform illumination. The algorithm is tested with live ALPR field images, confirming the robustness of the proposed method against adverse imaging condition.