Summary
Heavy earth-moving and construction equipment vehicles (dumpers, loaders, excavators, surface miners, dozers, drills, rock breakers) used only inside the appellants' factory or enclosed premises, and carried there on trailers, are special-type vehicles excluded by the second limb of Section 2(28) of the Motor Vehicles Act, 1988. They are not taxable under the Gujarat Motor Vehicles Tax Act, 1958, both because Entry 57 of List II permits taxing only vehicles suitable for use on roads and because the First Schedule prescribes no rate for construction equipment vehicles.
Issues
- Whether heavy earth-moving machinery, special service vehicles and construction equipment vehicles used only within factory or enclosed premises are 'motor vehicles' under Section 2(28) of the Motor Vehicles Act, 1988.
- Whether such vehicles are liable to tax under Section 3 of the Gujarat Motor Vehicles Tax Act, 1958.
Provisions considered
- Article 265 and Entry 57 of List II of the Seventh Schedule, Constitution of IndiaRead together, they confine the State's power to levy tax to vehicles suitable for use on roads; the Gujarat Act cannot go beyond Entry 57 to tax vehicles not suitable for road use and designed for off-road use in enclosed premises. (¶¶ 26, 27, 28, 31, 44, 55)
- Section 3(1), Gujarat Motor Vehicles Tax Act, 1958The charging provision levies tax on all motor vehicles used or kept for use in the State at notified rates within the Schedule maxima; the absence of the words 'suitable for use on roads' could not extend it beyond Entry 57. (¶¶ 22, 29, 30, 31, 42)
- Section 2(10), Gujarat Motor Vehicles Tax Act, 1958As 'motor vehicle' is not defined in the Gujarat Act, this provision imports the meaning given in the Motor Vehicles Act, 1988. (¶¶ 33, 34, 35)
- Section 2(28), Motor Vehicles Act, 1988Read in two parts: a wide first part covering mechanically propelled vehicles adapted for use upon roads, and an excluding second part for, among others, vehicles of a special type adapted for use only in a factory or other enclosed premises. The appellants' vehicles fall within the first part but are excluded by the second. (¶¶ 36, 37, 38, 39, 55)
- Rule 2(cab), Central Motor Vehicles Rules, 1989The definition of 'construction equipment vehicle' (excavators, loaders, dumpers, dozers and similar vehicles designed for off-highway operations) supported treating the appellants' vehicles as a special category rather than ordinary motor vehicles. (¶¶ 40, 41, 44)
- First Schedule, Item VI(f)(ii), Gujarat Motor Vehicles Tax Act, 1958The entry mentions construction equipment vehicles but prescribes no corresponding rate of tax, so no tax can be collected on them. (¶¶ 42, 55)
Held
- The State can levy tax only on vehicles suitable for use on roads; a State taxing statute cannot travel beyond Entry 57 of List II to tax vehicles that are not suitable for road use. (¶¶ 28, 31, 44)
- Vehicles of a special type that are meant for, and confined to, use within a factory or enclosed premises are excluded from 'motor vehicle' by the second part of Section 2(28) even if capable of road use. On the unrebutted certificates of manufacturers and of the Automotive Research Association of India, the appellants' vehicles were off-road equipment carried to site on trailers without road-worthiness certificates, and so fell within that exclusion. (¶¶ 13, 37, 38, 39, 46)
- Being construction equipment vehicles for which the First Schedule prescribes no rate of tax, the vehicles are in any event not chargeable to tax under Section 3(1) of the Gujarat Act. (¶¶ 42, 44)
- The MoRTH circular dated 13.07.2020, clarifying that special-type and construction vehicles not run on roads do not qualify as motor vehicles for regular registration, cannot override the statute but binds the departmental authorities. (¶ 43)
- The view follows the three-Judge Bench decision in Bolani Ores Ltd. v. State of Orissa, which construed 'adapted for use upon roads' as 'suitable for use on roads' and held that vehicles used only within enclosed premises are not taxable even if registered; there was no material change in the definition between the 1939 and 1988 Acts. Natwar Parikh, Western Coalfields, Rajasthan SRTC v. Santosh and the Division Bench decisions relied on by the State did not consider the exclusion in the second part of Section 2(28) and were held inapplicable. (¶¶ 45, 47, 48, 49, 50, 51, 53, 54)
- Taxing every vehicle merely because it is capable of road use, regardless of whether it is a special vehicle used only in enclosed premises, would produce anomalies such as treating military aircraft or tanks as taxable motor vehicles. (¶ 52)
- If such vehicles are actually found using roads, they remain subject to Section 2(28) of the Motor Vehicles Act and Section 3 of the Gujarat Act and may face seizure and penalty in accordance with law. (¶ 55)
Result
Appeals allowed; impugned judgments of the Gujarat High Court set aside; no order as to costs.