2026 (1) TMI 644 - SC - Indian Laws

Heavy earth-moving and construction equipment not 'motor vehicles' u/s 2(28); excluded from Gujarat motor tax

Whether heavy earth-moving/construction equipment constitute 'motor vehicles' under Section 2(28) MVA and are taxable under the Gujarat Motor Vehicles Tax ... Taxability under the Gujarat Motor Vehicles Tax Act, 1958 - Heavy Earth Moving Machinery or special services vehicles or any construction equipment vehicles such as Dumpers, Loaders, Excavators, Surface Miners, Dozers, Drills, Rock Breakers etc. are “motor vehicles” within the ambit of Section 2 (28) of the Motor Vehicles Act, 1988 or not - what is meant by “motor vehicle” or what are “motor vehicles”? - HELD THAT:- A simple and plain reading of Section 2 (28) of the Act would reveal that it is in two parts. The first part is inclusive and the second part is exclusive. The first part, in short, provides that a motor vehicle or a vehicle means any mechanically propelled vehicle which is adapted for use upon roads and includes the chassis to which a body has not been attached and a trailer. So, the above part of the definition of motor vehicle is inclusive in nature. The second part provides for the exclusion of certain vehicles from the definition of the motor vehicle. It provides that motor vehicle does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises. It means that the legislature has consciously provided for the exclusion of the vehicles of the special kind which have been adapted for use only in a factory or any other enclosed premises from the definition of motor vehicle. In other words, though the term motor vehicle is wide enough but it expressly excludes some of the motor vehicles which are of special type and have been adapted for use only in factory or in any other enclosed premises from its ambit. The vehicles in question used by the appellant are all in the nature of special vehicles as they are basically construction equipment vehicles which have been made suitable for use only in a factory and an enclosed premises rather than for use on roads. These vehicles may be capable of being used on road but essentially, they are meant to be used as a special vehicle inside the enclosed premises or in the factory premises alone and not outside on the road. Even for reaching the factory premises, or the so-called enclosed premises they do not ply on road and are taken on tractors and trailers from the place of their manufacturing to the place of their deployment - the vehicles used by the appellants are special type of vehicles meant to be used as construction equipment vehicle within the enclosed premises and as such ex-facie stands excluded from the definition of the motor vehicle as contained in Section 2 (28) of the Act, more particularly by virtue of the second part of the definition. The vehicles used by the appellant are “motor vehicles” within the first part of the definition under Section 2 (28) of the Act but they stand excluded from the definition of “motor vehicles” on account of their very nature of use and the place of the use by virtue of the second part of the definition. In the case of Natwar Parikh & Co. Ltd. vs. State of Karnataka & Ors. [2005 (9) TMI 644 - SUPREME COURT] a three-Judge Bench of this Court without over ruling Bolani Ores Ltd. [1974 (9) TMI 115 - SUPREME COURT] held that tractor-trailers used for transporting goods constitute a different category of “goods carriage” which requires permit under Section 66 of the Motor Vehicles Act. Therefore, in the absence of such a permit they are liable to tax under Section 3(2) of the Karnataka Motor Vehicles Taxation Act, 1957. A three-Judge Bench of this Court in Western Coalfields Limited vs. State of Maharashtra & Anr. [2016 (5) TMI 517 - SUPREME COURT] simply referring to the earlier decisions of this Court in Natwar Parikh & Co. Ltd. held that excavators fall within the meaning of the definition of “motor vehicles” as contained in Section 2(28) of the Act and therefore, would be liable for registration and payment of taxes. Thus, it is concluded that the vehicles used by the appellants are vehicles of special types, precisely construction equipment vehicles which are suitable and are meant for use for operation and use within the industrial area/factory premises/ defined enclosed premises and are not meant for use on roads or public roads. They are off-road equipments and as such stand excluded not only from the purview of the “motor vehicle” as defined under Section 2 (28) of the Act but also from tax as Entry 57 of List II of the Seventh Schedule of the Constitution only authorizes taxation of vehicles suitable for use on roads only. They are not even chargeable to road tax in view of Schedule I to Section 3(1) of the Gujarat Tax Act which do not prescribes any tax for such kind of vehicles i.e., construction equipment vehicles. However, if any such kind of vehicles are found using roads, they would not be free from the rigors of Section 2 (28) of the Act and Section 3 of the Gujarat Tax Act and may also be subject to proceedings for seizure and penalty in accordance with the law. The impugned judgments and orders dated 15.07.2011 and 19.12.2012 passed by the High Court of Gujarat are set aside - Appeal allowed. Issues: (i) Whether heavy earth moving machinery, special service vehicles or construction equipment vehicles such as dumpers, loaders, excavators, dozers, drills and rock breakers are 'motor vehicles' within the meaning of Section 2(28) of the Motor Vehicles Act, 1988 and therefore chargeable to tax under Section 3(1) of the Gujarat Motor Vehicles Tax Act, 1958.Analysis: A combined reading of Article 265 and Entry 57 of List II confines the State's power to tax to vehicles suitable for use on roads. Section 3(1) of the Gujarat Tax Act levies tax on 'all motor vehicles used or kept for use in the State' and Section 2(10) of that Act imports definitions from the Motor Vehicles Act, 1988. Section 2(28) of the Motor Vehicles Act defines 'motor vehicle' in two parts: an inclusive first part (any mechanically propelled vehicle adapted for use upon roads) and an exclusive second part (excluding vehicles of a special type adapted for use only in a factory or other enclosed premises). Rule 2(cab) of the Central Motor Vehicles Rules, 1989 defines 'construction equipment vehicle' as vehicles designed for off-highway operations. The vehicles in question are construction equipment/off-road machines, supported by uncontroverted manufacturer and expert certificates, not ordinarily run on public roads, transported on trailers and not issued road-worthiness certificates. Schedule I to the Gujarat Tax Act contains no specified tax rate for such construction equipment vehicles. Precedents recognizing the limit of taxation to vehicles that use public roads (including Bolani Ores Ltd.) support treating special off-road construction vehicles as outside the taxable category. Administrative circulars clarifying off-road status are relevant to departmental practice but do not override statute.Conclusion: The construction equipment and other special vehicles in question are excluded from the definition of 'motor vehicle' under Section 2(28) of the Motor Vehicles Act, 1988 by virtue of their being of a special type adapted for use only in factories or other enclosed premises, and consequently are not chargeable to road tax under Section 3(1) of the Gujarat Motor Vehicles Tax Act, 1958; result in favour of the assessee. If such vehicles are used on public roads, they remain subject to registration and tax laws and related proceedings.