TaxTMI 
TaxTMI 
2026 (1) TMI 644
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....he appellant in Civil Appeal Nos. 3357 and 3358/2017. Shri K. Parameshwar, senior counsel has been heard in opposition on behalf of respondent-State of Gujarat. 2. All the aforesaid four civil appeals are based on similar facts and raises a common question of law, namely; whether 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 ['the Act'] and are liable to be taxed under the Gujarat Motor Vehicles Tax Act, 1958 ['the Gujarat Tax Act']. 3. The Civil Appeal Nos. 3352-3353/2017 are the leading appeals and, therefore, the necessary facts in respect of those appeals only are being narrated for the sake of convenience. 4. The appellant-Ultratech Cement Ltd. is a public limited company engaged in manufacturing and marketing of clinker and cement products. It has two cement plants known as Gujarat Cement Works and Narmada Cement Works in Gujarat. In connection with the manufacturing work at the above two plants, it uses various Heavy Earth Moving Machinery/co....
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....ilers to the destination and since these are meant for off-road operations, they do not issue any road worthiness certificate for the above products/vehicles. 11. A similar certificate was issued by M/s Hindustan Motors Limited on 17.03.2000 regarding the various models of Dumpers manufactured and supplied by them. 12. Even M/s Automotive Research Association of India also certified on 04.06.2004 that such Heavy Earth Moving Machineries are meant for off-road use and not on-road. These are carried from one location to another in the knocked down condition only on trailers or trucks. 13. These certificates were placed on record by the appellant-Ultratech Cement Ltd. and were not controverted by the respondent-State of Gujarat. 14. The Assistant Regional Transport Officer on 16.01.2002 again informed the appellant that the above vehicles/equipment used by it fall within the definition of "motor vehicles" and are liable for registration and payment of road tax. Subsequently, on 09.11.2006, the Regional Transport Officer issued a show cause notice demanding a sum of Rs. 59,39,401/- towards registration fee, tax, arrears of tax along with 2 per cent interest and 25 per cent ....
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.... 2 SCC 777, squarely answers the question raised in these appeals wherein it has been held that the phrase "adapted for use upon roads" means vehicles which are suitable for plying on the roads and as such, vehicles and equipment not meant to be used on-roads are beyond taxation. 20. The aforesaid decision has been followed in Tarachand Logistic Solutions Limited vs. State of Andhra Pradesh & Ors. 2025 SCC OnLine SC 1851, wherein it has been held that vehicles operating within closed premises and vehicles which do not derive benefit from public road infrastructure, are not taxable. Merely because the vehicles in question have been registered under the Act, the appellants are not estopped from challenging its liability to pay road tax on the said vehicle. 21. The case laws relied upon by the State or the High Court in holding otherwise are distinguishable and are not applicable. 22. In response to the arguments advanced on behalf of appellants as aforesaid, Shri K. Parameshwar, senior counsel appearing for the State of Gujarat submits that Section 3(1) of the Gujarat Tax Act is the charging provision and it uses the word "all motor vehicles" and, therefore, any vehicle whic....
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.... they are suitable for use on roads. 29. Section 3 of the Gujarat Tax Act provides for levying tax on motor vehicles. The relevant part of it stipulates as under: "3. (1) Subject to the other provisions of this Act, on and from the 1st day of April 1958, there shall be levied and collected on all motor vehicles used or kept for use in the State, a tax at the rates fixed by the State Government, by notification in the Official Gazette, but not exceeding the maximum rates specified in the First, Second and Third Schedules: Provided that in the case of any motor vehicle (irrespective of whether they are specified in the First Schedule or the Second Schedule or Third Schedule kept by a dealer in, or manufacturer of, such vehicles, for the purpose of trade, there shall be levied and collected annually such amount of tax not exceeding Rs.5000 as the State Government may, by notification in the Official Gazette specify on those motor vehicles only which are permitted to be used on the roads in the manner prescribed by rules made under the Motor Vehicles Act, 1988: " 30. The aforesaid charging Section contemplates to levy and collect tax on all motor vehicles either....
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....des a chassis to which a body has not been attached and a trailer; but 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 or a vehicle having less than four wheels fitted with engine capacity or not exceeding twenty-five cubic centimeters;" 37. A simple and plain reading of the aforesaid provision 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....
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.... Motor Vehicle Rules, 1989 framed under the Act vide Rule 2 (cab) defines "construction equipment vehicle" to mean rubber tyred, rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor roller, dumper, motor grader, mobile crane, dozer, fork lift truck, self-loaded concrete mixture or any other construction vehicle or combination thereof designed for off-highway operations in mining, industrial undertaking, irrigation and general construction, modified and manufactured with "on or off" or "on and off" highway capabilities. 41. In the light of the aforesaid definition, the vehicles used by the appellant though manufactured or modified for "on or off" or "on and off" highway capabilities are essentially construction equipment vehicles of special kind and are not simplicitor motor vehicles falling within the ambit of Section 2 (28) of the Act. They as such are special type of vehicles falling in the category of "construction equipment vehicles". 42. The charging Section i.e., Section 3(1) of the Gujarat Tax Act itself provides that tax on all motor vehicles shall be levied and collected at the rate fixed by the State Government but not exc....
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....factory or enclosed premises. 45. The view taken by us above finds full support from the three-Judge Bench decision of this Court Bolani Ores Ltd. vs. State of Orissa (supra). In the said case this Court was dealing with the definition of the motor vehicle as it existed in the Motor Vehicles Act of 1939 in reference to Bihar and Orissa Motor Vehicles Taxation Act,1930. The "motor vehicle" was defined in Section 2(18) of the aforesaid Act which used the phrase "adapted for use upon roads". In the light of the said definition, this Court considered whether dumpers, rockers and tractairs are taxable under the Bihar and Orissa Motor Vehicles Taxation Act, 1930. This Court while considering the meaning of the words "adapted for use" observed that they must be construed as "suitable for use or in other words fit for use on road". This connotation was based upon Entry 57 of List II of the Seventh Schedule of the Constitution. It was held that in view of Entry 57 of List II of the Seventh Schedule of the Constitution, the power to impose tax on motor vehicles is regulatory and compensatory in nature and that the said power can be exercised to impose taxes on motor vehicles which use the....
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....o. Ltd. (supra) in holding that excavators fall within the meaning of definition of "motor vehicles" as contained in Section 2 (28) of the Act and as such would be liable for registration and payment of tax but without going into the aspect whether such vehicles stands excluded from the definition of "motor vehicles" by virtue of second part of the definition contained under Section 2 (28) of the Act, it is of no use in the facts and circumstances of the case. 51. The decisions to the contrary cited at the Bar starting from Travancore Tea Estates Co. Ltd vs. State of Kerala & Ors. (1980) 3 SCC 619, Union of India and Ors. vs. Chowgule and Co. Pvt. Ltd. & Ors. 1992 Supp (3) SCC 141, M/s Central Coal Fields Ltd. vs. State of Orissa & Ors. 1992 Supp (3) SCC 133, Chief General Manager, Jagannath Area & Ors. (supra), Bose Abraham vs. State of Kerala & Anr. (2001) 3 SCC 157, State of Gujarat & Ors. (supra) are all decisions of the different Division Benches of this Court. No doubt, they hold that vehicles used or kept for use on the public roads of the State are exigible to tax, and if they are not so used they can claim exemption but all these decisions fail to take into account the ....
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....he said decision deals with the motorised cart "Jugaad" and it was held that it is a "motor vehicle" within the definition of Section 2 (28) of the Act and is exigible to road tax. The facts of the said case were quite distinct from the present case at hand in as much as in the said case the Court was only called upon to rule as to whether motorised cart "Jugaad" is a motor vehicle or not. The Court had not embarked upon to consider whether by virtue of its use it would stand excluded from the definition of the "motor vehicle". Therefore, the aforesaid decision is also of no use in the present case. 54. Contrary to the above, this Court recently in Tarachand Logistic Solutions Limited (supra) was called upon to decide whether the premises of Visakhapatnam Steel Plant, Andhra Pradesh, a corporate entity of Rashtriya Ispat Nigam Limited ('RINL') where the alleged special type vehicles were exclusively used constitute a "public place". This Court inter alia observed that if a motor vehicle is not used in a public place or is not kept for use in a public place and the person concerned is not deriving any benefit from the public infrastructure, he should not be burdened with the moto....