Common parlance classification of road construction equipment as plant and machinery, not motor vehicles, under VAT law

Road construction equipment such as mobile bitumen sprayers, pothole repairing machines, hot mix and drum mix plants, road sweepers, paver finishers and road rollers were held to be plant and machinery, not motor vehicles, under the Bihar Value Added Tax Act, 2005. Because the Act did not define either term, classification turned on the common parlance test. The equipment was used for road construction, not for transporting goods or passengers, and its wheels or chassis merely enabled movement to the work site. External definitions from other enactments were rejected, and the equipment fell within entry 91 of Schedule III.

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Issues: Whether road construction equipments such as mobile bitumen sprayers, pothole repairing machines, hot mix and drum mix plants, road sweepers, paver finishers and road rollers are classifiable as "motor vehicles" under the Bihar Value Added Tax Act, 2005, or as "plant and machineries" under entry 91 of Schedule III.

Analysis: The charging provision under Section 14 of the Bihar Value Added Tax Act, 2005 made the classification decisive for rate of tax. The Act did not define either "motor vehicle" or "plant and machinery", so the correct approach was the common parlance test. The equipments in question were not designed for transporting goods or passengers; they were used only for road construction and their wheels or chassis merely facilitated movement to the work site. External assistance from other enactments could not control the meaning of the entry in the Act of 2005. On the statutory scheme and commercial understanding, the equipments answered the description of plant and machinery and not motor vehicles.

Conclusion: The road construction equipments were not motor vehicles for the purpose of the Act of 2005 and were correctly held to fall within entry 91 of Schedule III as plant and machineries.

Ratio Decidendi: Where a taxing statute does not define the relevant expression, classification must be determined by common parlance, and movable road construction equipment used as an integral part of the manufacturing or construction process may be treated as plant and machinery if it is not designed for transport of goods or passengers.

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