1996 (9) TMI 623 - SC - Indian Laws

Dumper vehicles held taxable under Orissa Motor Vehicles Taxation Act, Supreme Court affirms decision

The Chief General Manager Jagannath Area Versus The State Of Orissa & Anr

The Supreme Court upheld the Orissa High Court's judgment, confirming that dumpers are taxable under the Orissa Motor Vehicles Taxation Act. The Court ... - Issues Involved:1. Taxability of dumpers under the Orissa Motor Vehicles Taxation Act.2. Compensatory nature of the tax on motor vehicles.Issue-wise Detailed Analysis:1. Taxability of Dumpers under the Orissa Motor Vehicles Taxation Act:The primary issue before the Orissa High Court was whether the dumpers used within mining areas fall under the definition of 'Motor Vehicles' as per the Orissa Motor Vehicles Taxation Act (referred to as 'The Taxation Act'). The petitioners argued that dumpers, being used solely within mining areas and not on public roads, should not be classified as motor vehicles and thus should not be taxable under the Taxation Act.The definition of 'Motor Vehicle' under the Taxation Act includes any wheeled conveyance propelled mechanically and adapted for use upon the road, excluding vehicles running on fixed rails or those adapted for use only in a factory or enclosed premises. The petitioners contended that dumpers are too heavy to move on public roads and thus do not meet this definition.However, the Orissa High Court, relying on the precedent set in Central Coal Fields Ltd. vs. State of Orissa (1992 Supl. (3) SCC 133), dismissed the writ petition, stating that dumpers are indeed motor vehicles and are taxable. The Supreme Court upheld this decision, emphasizing that the crucial question is whether dumpers are motor vehicles and thus taxable under Section 3 of the Taxation Act.The Supreme Court noted that the argument regarding the dimensions of dumpers exceeding permissible limits under Motor Vehicle Rules (Rules 92 and 93) does not exclude them from being classified as motor vehicles. The Court reiterated that the term 'adapted' in the definition should be read as 'suitable,' meaning that dumpers, despite their size and weight, are suitable for use on roads. This interpretation aligns with the legislative history and previous decisions, such as Bolani Ores Ltd. vs. State of Orissa (1974) 2 SCC 777, which held that vehicles running on tyres are adapted for use on roads.The Supreme Court further referenced the case of Union of India & Ors. vs. Chowgule & Co. Pvt. Ltd. & Ors. (1992 Sup. (3) SCC 141), which confirmed that dumpers used within mining areas are still liable to tax as they are vehicles used for transporting goods and thus fall under the ambit of the Taxation Act.2. Compensatory Nature of the Tax on Motor Vehicles:The second argument presented by the petitioners was that the tax on vehicles is compensatory in nature and should only be levied if the vehicles use the roads for which the tax is imposed. The petitioners argued that since the dumpers do not use public roads, the tax should not apply.The Supreme Court addressed this by referring to the decision in Central Coal Fields Limited vs. State of Orissa, which held that the tax is compensatory as it is imposed for the use or potential use of public roads. The tax facilitates trade, commerce, and intercourse within the state by providing and maintaining roads. The Court cited Automobile Transport Ltd. vs. State of Rajasthan & Ors. (1963) 1 SCR 491, which clarified that the compensatory nature of the tax does not require the exact amount collected to be used for road maintenance. Instead, the tax is justified as it provides a service or convenience that can be availed by the vehicle owners.The Supreme Court also referenced the case of Regional Transport Officer-cum-Taxing Authority, Rourkela & Ors. 1995 (4) SCC 165, which reversed a decision by the Orissa High Court that had exempted vehicles used within the premises of the Steel Authority of India from the tax. This case reinforced that vehicles, even if used within enclosed premises, are taxable under the Motor Vehicles Taxation Act.Conclusion:The Supreme Court upheld the Orissa High Court's judgment, confirming that dumpers are taxable under the Orissa Motor Vehicles Taxation Act. The Court found no infirmity in the High Court's decision, concluding that dumpers are motor vehicles adapted for use on roads and thus fall within the scope of the Taxation Act. The compensatory nature of the tax was also upheld, emphasizing that the tax is justified for the maintenance and availability of public roads.