Serious errors were found in legal documents relating to on-street parking spaces in Halifax town centre and Skircoat since 2008.
The council has been forced to suspend all on-street parking charges after a parking ticket was successfully challenged by a member of the public.
All affected parking charges have been suspended and could be for up to three months if the council are unable to obtain an emergency legal order.
Officers estimate that up to £200,000 could be lost in revenue from parking machines, and a further £200,000 in refunds for illegally issued parking tickets.
It is estimated that more than 7,000 penalty charge notices (PCN) will be refunded to those who were fined on those streets
However, the council will still issue PCNs where cars are parked on yellow lines, in loading bays, in disabled bays and in car parks.
Council leader Stephen Baines said: “The decision was made because it became clear that our traffic regulation orders for these areas cannot be legally enforced.
“There have been some errors in all the background information on these orders – they were small errors, but they were sufficient to make them enforceable.
“This doesn’t affect the car parks, loading bays, double yellow lines or disabled bay, because they’re under a different order.
“We are taking steps to make sure all of the parking charges are suspended and no tickets will be issued for these spaces.”
Calderdale Council’s Director of Economy and Environment, Ian Gray, said: “The charges for on-street pay and display parking, and for some residents’ parking in these areas have now been temporarily suspended. As the old order was unenforceable, drivers who have received a PCN after parking in the affected streets will be able to request a refund. We will write directly to all affected residents in Skircoat.”
For refund details, visit www.calderdale.gov.uk where you will find a Frequently Asked Questions section.