Full Judgment Text
2026 INSC 43
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3352-3353 OF 2017
ULTRATECH CEMENT LTD. …APPELLANT(S)
VERSUS
THE STATE OF GUJARAT & ORS. …RESPONDENT(S)
WITH
CIVIL APPEAL NO. 3357 OF 2017
AND
CIVIL APPEAL NO. 3358 OF 2017
J U D G M E N T
PANKAJ MITHAL, J.
1. Heard Shri P. Chidambaram, senior counsel appearing for
the appellant-Ultratech Cement Ltd. in Civil Appeal
Signature Not Verified
Nos.3352-3353/2017 and Shri Nakul Dewan, senior counsel
Digitally signed by
geeta ahuja
Date: 2026.01.09
16:18:47 IST
Reason:
appearing for the appellant in Civil Appeal Nos.3357 and
1
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
1
the Motor Vehicles Act, 1988 and are liable to be taxed under
2
the Gujarat Motor Vehicles Tax Act, 1958 .
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
1
Hereinafter referred to as ‘the Act’
2
Hereinafter referred to as ‘the Gujarat Tax Act’
2
above two plants, it uses various Heavy Earth Moving
Machinery/construction equipment or special services
vehicle.
5.
In Civil Appeal Nos.3352-3353/2017, the vehicles used are
predominantly Dumpers and Loaders. In Civil Appeal
No.3357/2017, the vehicles are Excavators and Surface
Miners whereas in Civil Appeal No.3358/2017, the vehicles
used are Dozers, Drillers, Rock Breakers, Excavators and
Surface Miners.
6. The Regional Transport Officer, Bhuj, on 04.06.1996 issued
a letter acknowledging that the Dumpers used by the
appellants within the private premises do not require
registration under the Act. However, later on the Transport
Commissioner published a press advertisement in Gujarati
Daily ‘ Sandesh ’ on 20.11.1999, directing registration of all
special service vehicles including Dumpers as is mandated
by Section 39 of the Act and that the appellants are required
to pay road tax on those vehicles under the Gujarat Tax Act.
7. Pursuant thereto, in January 2000, the Regional Transport
Officer even conducted an inspection of the vehicles used by
3
the appellant and directed the appellant to get them
registered and pay tax under the Gujarat Tax Act.
8. The appellant protested against it and replied to the
Transport Commissioner on 02.02.2000 that these vehicles
were not strictly “motor vehicles” as defined under Section 2
(28) of the Act and, therefore, they are neither required to be
registered nor chargeable to tax under the Gujarat Tax Act.
The Transport Commissioner refused to accept the plea
taken by the appellant and insisted for the registration of
vehicles and payment of road tax.
9. It may be worth noting that the vehicles so used by the
appellants were not meant to be used “on-road”. They were
transported to the work premises of the appellant in a
dismantled condition on trailers and were confined to use
within the factory/enclosed premises.
10. M/s Bharat Earth Movers Limited, the
manufacturers/suppliers of the said vehicles, certified by
their letter dated 23.03.2000 that they have been
manufacturing and supplying heavy duty Dumpers amongst
other range of products for operating in mining/industrial
4
off-road activities. These products/vehicles that are
manufactured and supplied by them are designed as vehicles
of a special type to be adopted for use only in mining and
industrial off-road operations and are not meant for use on-
road. These products/vehicles are transported from their
place on trailers 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.
5
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 penalty
with effect from the year 1999 when aforesaid
vehicles/equipment were purchased by the appellant. The
appellant, after multiple correspondence, were pressurized to
get the said vehicles/equipment registered and to deposit a
sum of Rs. 1.36 crores. The appellant got the vehicles
registered and deposited Rs. 88.45 lakhs under protest.
15. In the above scenario, when the show cause notice was
issued, the appellant approached the High Court of Gujarat
for the quashing of aforesaid show cause notice dated
09.11.2006 and for the refund of the amount deposited by
them. The High Court dismissed the petition by common
judgment and order dated 15.07.2011 holding that the
6
vehicles/equipment used by the appellants particularly
Dumpers were “motor vehicles” under the Act and are
chargeable to tax.
16.
It is against the aforesaid judgment and order of the High
Court dated 15.07.2011 that the appellant is in appeal before
this Court. The appellants in other connected appeals are
also before this Court in a similar fashion. As said earlier, all
these appeals give rise to a common question of law as
framed previously hereinabove, therefore, we are dealing with
all of them together on the basis of the facts contained in Civil
Appeal Nos. 3352-3353/2017.
17. The primary submission on behalf of the appellants is that
Entry 57 of List II of the Seventh Schedule of the Constitution
of India permits taxation only of vehicles “suitable for use on
roads”, therefore, vehicles not used in public places or public
roads or not suitable for use on roads are outside the purview
of the definition of “motor vehicles” and are not chargeable to
road tax. Secondly, it has been submitted that the
manufacturer’s specifications and the certificates of the
experts on record clearly demonstrate that the vehicles in
7
question are off-road vehicles. The certificates and
contentions have not been refuted by the State and the Court
has simply ignored them by saying that the expert certificates
and manufacturer’s specifications are not material.
18. It has also been contended that the Ministry of Road
Transport and Highways (MoRTH) vide circular dated
13.07.2020 expressly states that such vehicles as used by
the appellants are “off-road equipment” and they do not
qualify to be “motor vehicles” which may require registration.
3
19. Moreover, Bolani Ores Ltd. vs. State of Orissa , 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
4
& Ors. , wherein it has been held that vehicles operating
3
(1974) 2 SCC 777
4
2025 SCC OnLine SC 1851
8
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
which falls within the ambit of “motor vehicles”, whether
meant for on-road or off-road use, is subject to payment of
road tax. No distinction can be made between the vehicles on
the basis of their use. The words “public place” or “public
road” have not been used in Section 3 of the Gujarat Tax Act
and are of no relevance.
23. The circular of the Ministry of Road Transport and Highways
(MoRTH) dated 13.07.2020 has not been issued in exercise of
9
any rule making power under the Act. It is not relevant and
is not binding as it cannot override the express provision of
the statute. Moreover, the said circular operates
prospectively and would not apply to the vehicles which have
been purchased earlier.
24. The decision of Tarachand Logistic (supra) relied upon on
behalf of appellants is of no help, rather, the decisions
rendered by this Court in Chief General Manager,
5
Jagannath Area & Ors. vs. State of Orissa & Anr. and
State of Gujarat & Ors. vs. Akhil Gujarat Pravasi V.S.
6
Mahamandal & Ors., would prevail.
25. Before embarking upon the question of law i.e., whether
heavy earth moving machinery or special service vehicle or
any construction equipment vehicles are “motor vehicles”
within the ambit of Section 2 (28) of the Act and are
chargeable to tax under the Gujarat Tax Act, it would be
necessary for us to refer to certain provisions of the
Constitution of India, then to the charging Section of the
5
(1996) 10 SCC 676
6
(2004) 5 SCC 155
10
Gujarat Tax Act and then the definition of the “motor vehicle”
as contained in the Act itself.
26. Article 265 of the Constitution of India clearly provides that
tax shall not be levied or collected except by the authority of
law. If we read the above Article in consonance with Entry 57
of List II of the Seventh Schedule of the Constitution, it would
be evident that taxes can be imposed on vehicles which
impliedly include “motor vehicle” suitable for use on roads.
27. Entry 57 of List II of Seventh Schedule of the Constitution
reads as under:
“57. Taxes on vehicles, whether mechanically
propelled or not, suitable for use on roads,
including tram-cars subject to the provisions of
Entry 35 of List III.”
28. Upon a conjoint reading of Article 265 and Entry 57 of List II
of the Seventh Schedule of the Constitution, it is evident that
the State is competent to levy and collect tax on vehicles i.e.,
motor vehicles if 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
11
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 used or kept for use in
the State. A plain reading of the aforesaid provision would
reveal that tax can be levied and collected from all motor
vehicles irrespective of the fact as to whether they are
actually used or kept for use.
31. It may be pertinent to note that Entry 57 of List II of the
Seventh Schedule of the Constitution permits imposition of
tax on vehicles suitable for use on roads. Section 3 of the
Gujarat Tax Act authorizes levy and collection of tax on all
motor vehicles used or kept for use in the State without
12
specifying whether suitable for use on roads or not. It is on
account of the conspicuous absence of the qualification
“suitable for use on roads” in the Gujarat Tax Act that the
vehicles used by the appellants which are said to be off-road
vehicles are sought to be taxed. The Gujarat Tax Act cannot
travel beyond Entry 57 of List II of Seventh Schedule of the
Constitution of India so as to tax vehicles which are not
suitable for being used on roads.
32. Now, the basic issue is: what is meant by “motor vehicle” or
what are “motor vehicles”.
33. The phrase “motor vehicle” has not been defined under the
Gujarat Tax Act rather sub-Section (10) of Section 2 of the
said Act provides that words and expressions not defined
under the said Act shall have the same meaning as assigned
to them under the Act.
34. Section 2 (10) is reproduced herein below:
“2. In this Act, unless the context otherwise
requires:-
……………………………………………………………..
(10) other words and expressions used, but not
defined, in this Act, shall have the meanings
respectively assigned to them in the Motor
Vehicles, 1988 or the rules made thereunder.”
13
35. In view of the above provision of Section 2 (10) of the Act as
motor vehicle has not been defined under the Gujarat Tax
Act, it has to be assigned the same meaning as is contained
in the Act.
36. The Act defines “motor vehicle” under Section 2 (28) of the
Act. It reads as under:
“ 2. Definitions -In this Act, unless the context
otherwise requires.-
……………………………………………………………..
(28) “motor vehicle” or “vehicle” means any
mechanically propelled vehicle adapted for the
use upon roads whether the power of propulsion
is transmitted thereto from an external or
internal source and includes 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
14
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.
38. 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
15
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 various certificates of the
manufacturers and suppliers as well as those issued by the
Automotive Research Association of India amply demonstrate
that the aforesaid vehicles used by the appellant are special
type of vehicles meant for use only within the factory
premises or the enclosed premise. They are all off-road
vehicles that do not ordinarily ply on roads. Since, they do
not run on the roads, the manufacturers and suppliers do
not even issue any certificate of road worthiness in respect of
these vehicles. In short, 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
stands excluded from the definition of the motor
ex-facie
16
vehicle as contained in Section 2 (28) of the Act, more
particularly by virtue of the second part of the definition.
39. In view of the above, we can safely conclude that though 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.
40. There is another reason for excluding the above vehicles used
by the appellant from the ambit of the motor vehicles. The
Central 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
17
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 exceeding the maximum rate specified in the first, second
and third Schedule of the Act. If we go to the first schedule
to the Gujarat Tax Act, we find that against each type of
motor vehicles maximum annual rate of tax has been
specified. However, under Item (ii) of Item (f) under Item VI of
the First Schedule, though we find mention of motor vehicles
exceeding particular specification and/or any construction
equipment vehicles but there is no corresponding rate of tax.
18
If the aforesaid entry in the Schedule I is read, it would
demonstrate that the Schedule prescribes no rate of tax on
construction equipment vehicles i.e., the vehicles as used by
the appellant. Therefore, it can again be concluded that the
vehicles used by the appellants are special type of vehicles
which stand excluded from the definition of motor vehicles
and, at the same time, being construction equipment
vehicles, are not chargeable to tax. The Gujarat Tax Act itself
does not provide for any rate of tax for collection of any tax
from such vehicles.
43. It is for the above reason that the Ministry of Road Transport
and Highways (MoRTH) had issued circular dated
13.07.2020 to clarify that vehicles as used by the appellants
i.e., vehicles of special type or those used in construction
activity, if are not being run on roads, do not qualify to be
motor vehicles and regular registration. The said circular
may not override the express provisions of law but
nonetheless, is binding upon the departmental authorities as
7
has been held in K.P. Varghese vs. ITO .
7
(1981) 4 SCC 173
19
44. On a composite reading of Section 3 of the Gujarat Tax Act,
the definition of motor vehicles under Section 2 (28) of the
Act, the definition of construction equipment vehicles
contained in Rule 2 (cab) of the Rules and Schedule I of the
Gujarat Tax Act, it is crystal clear that the vehicles of the kind
used by the appellant which are special vehicles i.e.,
construction equipment vehicles may be suitable for plying
upon roads are essentially meant to be used in a factory or
an enclosed premises and as such are not chargeable to tax
under the Gujarat Tax Act. Even otherwise in view of the
language employed in Entry 57 of List II of Seventh Schedule
of the Constitution of India, no authority is authorized to levy
or collect tax on vehicles which are not suitable for use on
roads and have been designed for off-road use in 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
20
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 roads in the State. This
Court further observed that the vehicles such as dumpers,
rockers and tractairs are though suitable for use on roads
but in the light of the pleadings as they were used only within
the enclosed premises specifically for the industrial purpose,
they cannot be held liable for taxation. It was categorically
21
held that if a vehicle does not use the public roads, it cannot
be taxed. It was also observed that if a vehicle merely moves
from one place to another, it need not necessarily be a motor
vehicle. It also holds that vehicles though registered under
the Act as motor vehicles need not be subjected to tax if
otherwise those vehicles do not ply on roads.
46. The vehicles used by the appellant undeniably are not used
on roads and are not even kept for use on roads.
47. However, in the case of Natwar Parikh & Co. Ltd. vs.
8
State of Karnataka & Ors. a three-Judge Bench of this
Court without over ruling Bolani Ores Ltd. (supra) 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.
48. The aforesaid decision in the case of Natwar Parikh & Co.
Ltd. (supra) has simply held that the “goods carriage”
requires a permit under the Motor Vehicles Act and therefore,
8
(2005) 7 SCC 364
22
they are “motor vehicles”. However, it failed to consider
whether the vehicles in question which are allegedly special
type vehicles or construction equipment vehicles specially
designed to be used in factory premises or in the enclosed
premises and not on the public roads would be covered by
motor vehicles. Therefore, the above decision has no
application to the facts and circumstances of the present
case.
49. A three-Judge Bench of this Court in Western Coalfields
9
Limited vs. State of Maharashtra & Anr . simply referring
to the earlier decisions of this Court in Natwar Parikh &
Co. Ltd. (supra) 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.
50. Since, the decision in the case of Western Coalfields
Limited (supra) is based upon Natwar Parikh & Co. Ltd.
(supra) in holding that excavators fall within the meaning of
definition of “motor vehicles” as contained in Section 2 (28)
9
(2016) 11 SCC 613
23
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 &
10
Ors. , Union of India and Ors. vs. Chowgule and Co. Pvt.
11
Ltd. & Ors. , M/s Central Coal Fields Ltd. vs. State of
12
Orissa & Ors. , Chief General Manager, Jagannath Area
& Ors. (supra) , Bose Abraham vs. State of Kerala &
13
Anr. , 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 specific exclusion as contained in the second
10
(1980) 3 SCC 619
11
1992 Supp (3) SCC 141
12
1992 Supp (3) SCC 133
13
(2001) 3 SCC 157
24
part of Section 2 (28) of the Act which defines “motor
vehicles”. As stated earlier, the vehicles or the construction
equipment vehicles used by the appellants are “motor
vehicles” within the first part of the definition as contained in
Section 2 (28) but they stand excluded by virtue of the second
part of the said definition. This aspect of the matter has not
been specifically considered by any of the above decisions.
Moreover, all these decisions simply brushes aside Bolani
Ores Ltd. (supra) without actually ruling it out on the ground
that it relates to “motor vehicles” as defined under the old Act
without realising that there was no material change between
the definition of “motor vehicles” in the old or present Act.
52. If the principle laid down by the above decisions that vehicles
either used or kept for use in the State irrespective of whether
they are suitable for plying on roads or not or whether they
are special type of vehicles meant to be used only in enclosed
premises are subjected to tax is accepted, it will lead to an
anomaly. It may be noted that aircrafts specially those
belonging to Air Force are capable of landing on the highways
and they can after taxing on the highway can also take-off
25
from there, and as such would be vehicles suitable for use on
roads which will make them motor vehicles liable for
registration under the Act and payment of road tax within the
ambit of various State Acts. Similar would be the case with
the tanks belonging to Army inasmuch as they are also
suitable to ply on roads if necessary and keeping them for
use within any State would attract their registration as motor
vehicles liable to payment of tax. This cannot be the intention
of the legislature in prescribing the definition of the motor
vehicles under the Act and to impose tax thereupon. In this
view of the matter, the principle laid down by the above
decisions cannot be accepted and applied in an absolute form
on all motor vehicles ignoring the distinction between normal
motor vehicles and the motor vehicles of special kind such as
heavy construction equipment or special type of vehicles
which are meant to be used within a specified area and not
on public roads.
53. One another decision in the case of Chairman, Rajasthan
State Road Transport Corporation & Ors. vs. Santosh &
26
14
Ors. was cited. The 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
14
(2013) 7 SCC 94
27
concerned is not deriving any benefit from the public
infrastructure, he should not be burdened with the motor
vehicle tax.
55.
In view of the aforesaid discussion specially considering the
pleadings and the material on record, we are of the conclusive
opinion 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
28
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.
56.
Accordingly, the impugned judgments and orders dated
15.07.2011 and 19.12.2012 passed by the High Court of
Gujarat are set aside and the appeals are allowed with no
order as to cost.
.............……………………………….. J.
(PANKAJ MITHAL)
.............……………………………….. J.
(PRASANNA B. VARALE)
NEW DELHI;
JANUARY 08, 2026.
29
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3352-3353 OF 2017
ULTRATECH CEMENT LTD. …APPELLANT(S)
VERSUS
THE STATE OF GUJARAT & ORS. …RESPONDENT(S)
WITH
CIVIL APPEAL NO. 3357 OF 2017
AND
CIVIL APPEAL NO. 3358 OF 2017
J U D G M E N T
PANKAJ MITHAL, J.
1. Heard Shri P. Chidambaram, senior counsel appearing for
the appellant-Ultratech Cement Ltd. in Civil Appeal
Signature Not Verified
Nos.3352-3353/2017 and Shri Nakul Dewan, senior counsel
Digitally signed by
geeta ahuja
Date: 2026.01.09
16:18:47 IST
Reason:
appearing for the appellant in Civil Appeal Nos.3357 and
1
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
1
the Motor Vehicles Act, 1988 and are liable to be taxed under
2
the Gujarat Motor Vehicles Tax Act, 1958 .
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
1
Hereinafter referred to as ‘the Act’
2
Hereinafter referred to as ‘the Gujarat Tax Act’
2
above two plants, it uses various Heavy Earth Moving
Machinery/construction equipment or special services
vehicle.
5.
In Civil Appeal Nos.3352-3353/2017, the vehicles used are
predominantly Dumpers and Loaders. In Civil Appeal
No.3357/2017, the vehicles are Excavators and Surface
Miners whereas in Civil Appeal No.3358/2017, the vehicles
used are Dozers, Drillers, Rock Breakers, Excavators and
Surface Miners.
6. The Regional Transport Officer, Bhuj, on 04.06.1996 issued
a letter acknowledging that the Dumpers used by the
appellants within the private premises do not require
registration under the Act. However, later on the Transport
Commissioner published a press advertisement in Gujarati
Daily ‘ Sandesh ’ on 20.11.1999, directing registration of all
special service vehicles including Dumpers as is mandated
by Section 39 of the Act and that the appellants are required
to pay road tax on those vehicles under the Gujarat Tax Act.
7. Pursuant thereto, in January 2000, the Regional Transport
Officer even conducted an inspection of the vehicles used by
3
the appellant and directed the appellant to get them
registered and pay tax under the Gujarat Tax Act.
8. The appellant protested against it and replied to the
Transport Commissioner on 02.02.2000 that these vehicles
were not strictly “motor vehicles” as defined under Section 2
(28) of the Act and, therefore, they are neither required to be
registered nor chargeable to tax under the Gujarat Tax Act.
The Transport Commissioner refused to accept the plea
taken by the appellant and insisted for the registration of
vehicles and payment of road tax.
9. It may be worth noting that the vehicles so used by the
appellants were not meant to be used “on-road”. They were
transported to the work premises of the appellant in a
dismantled condition on trailers and were confined to use
within the factory/enclosed premises.
10. M/s Bharat Earth Movers Limited, the
manufacturers/suppliers of the said vehicles, certified by
their letter dated 23.03.2000 that they have been
manufacturing and supplying heavy duty Dumpers amongst
other range of products for operating in mining/industrial
4
off-road activities. These products/vehicles that are
manufactured and supplied by them are designed as vehicles
of a special type to be adopted for use only in mining and
industrial off-road operations and are not meant for use on-
road. These products/vehicles are transported from their
place on trailers 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.
5
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 penalty
with effect from the year 1999 when aforesaid
vehicles/equipment were purchased by the appellant. The
appellant, after multiple correspondence, were pressurized to
get the said vehicles/equipment registered and to deposit a
sum of Rs. 1.36 crores. The appellant got the vehicles
registered and deposited Rs. 88.45 lakhs under protest.
15. In the above scenario, when the show cause notice was
issued, the appellant approached the High Court of Gujarat
for the quashing of aforesaid show cause notice dated
09.11.2006 and for the refund of the amount deposited by
them. The High Court dismissed the petition by common
judgment and order dated 15.07.2011 holding that the
6
vehicles/equipment used by the appellants particularly
Dumpers were “motor vehicles” under the Act and are
chargeable to tax.
16.
It is against the aforesaid judgment and order of the High
Court dated 15.07.2011 that the appellant is in appeal before
this Court. The appellants in other connected appeals are
also before this Court in a similar fashion. As said earlier, all
these appeals give rise to a common question of law as
framed previously hereinabove, therefore, we are dealing with
all of them together on the basis of the facts contained in Civil
Appeal Nos. 3352-3353/2017.
17. The primary submission on behalf of the appellants is that
Entry 57 of List II of the Seventh Schedule of the Constitution
of India permits taxation only of vehicles “suitable for use on
roads”, therefore, vehicles not used in public places or public
roads or not suitable for use on roads are outside the purview
of the definition of “motor vehicles” and are not chargeable to
road tax. Secondly, it has been submitted that the
manufacturer’s specifications and the certificates of the
experts on record clearly demonstrate that the vehicles in
7
question are off-road vehicles. The certificates and
contentions have not been refuted by the State and the Court
has simply ignored them by saying that the expert certificates
and manufacturer’s specifications are not material.
18. It has also been contended that the Ministry of Road
Transport and Highways (MoRTH) vide circular dated
13.07.2020 expressly states that such vehicles as used by
the appellants are “off-road equipment” and they do not
qualify to be “motor vehicles” which may require registration.
3
19. Moreover, Bolani Ores Ltd. vs. State of Orissa , 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
4
& Ors. , wherein it has been held that vehicles operating
3
(1974) 2 SCC 777
4
2025 SCC OnLine SC 1851
8
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
which falls within the ambit of “motor vehicles”, whether
meant for on-road or off-road use, is subject to payment of
road tax. No distinction can be made between the vehicles on
the basis of their use. The words “public place” or “public
road” have not been used in Section 3 of the Gujarat Tax Act
and are of no relevance.
23. The circular of the Ministry of Road Transport and Highways
(MoRTH) dated 13.07.2020 has not been issued in exercise of
9
any rule making power under the Act. It is not relevant and
is not binding as it cannot override the express provision of
the statute. Moreover, the said circular operates
prospectively and would not apply to the vehicles which have
been purchased earlier.
24. The decision of Tarachand Logistic (supra) relied upon on
behalf of appellants is of no help, rather, the decisions
rendered by this Court in Chief General Manager,
5
Jagannath Area & Ors. vs. State of Orissa & Anr. and
State of Gujarat & Ors. vs. Akhil Gujarat Pravasi V.S.
6
Mahamandal & Ors., would prevail.
25. Before embarking upon the question of law i.e., whether
heavy earth moving machinery or special service vehicle or
any construction equipment vehicles are “motor vehicles”
within the ambit of Section 2 (28) of the Act and are
chargeable to tax under the Gujarat Tax Act, it would be
necessary for us to refer to certain provisions of the
Constitution of India, then to the charging Section of the
5
(1996) 10 SCC 676
6
(2004) 5 SCC 155
10
Gujarat Tax Act and then the definition of the “motor vehicle”
as contained in the Act itself.
26. Article 265 of the Constitution of India clearly provides that
tax shall not be levied or collected except by the authority of
law. If we read the above Article in consonance with Entry 57
of List II of the Seventh Schedule of the Constitution, it would
be evident that taxes can be imposed on vehicles which
impliedly include “motor vehicle” suitable for use on roads.
27. Entry 57 of List II of Seventh Schedule of the Constitution
reads as under:
“57. Taxes on vehicles, whether mechanically
propelled or not, suitable for use on roads,
including tram-cars subject to the provisions of
Entry 35 of List III.”
28. Upon a conjoint reading of Article 265 and Entry 57 of List II
of the Seventh Schedule of the Constitution, it is evident that
the State is competent to levy and collect tax on vehicles i.e.,
motor vehicles if 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
11
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 used or kept for use in
the State. A plain reading of the aforesaid provision would
reveal that tax can be levied and collected from all motor
vehicles irrespective of the fact as to whether they are
actually used or kept for use.
31. It may be pertinent to note that Entry 57 of List II of the
Seventh Schedule of the Constitution permits imposition of
tax on vehicles suitable for use on roads. Section 3 of the
Gujarat Tax Act authorizes levy and collection of tax on all
motor vehicles used or kept for use in the State without
12
specifying whether suitable for use on roads or not. It is on
account of the conspicuous absence of the qualification
“suitable for use on roads” in the Gujarat Tax Act that the
vehicles used by the appellants which are said to be off-road
vehicles are sought to be taxed. The Gujarat Tax Act cannot
travel beyond Entry 57 of List II of Seventh Schedule of the
Constitution of India so as to tax vehicles which are not
suitable for being used on roads.
32. Now, the basic issue is: what is meant by “motor vehicle” or
what are “motor vehicles”.
33. The phrase “motor vehicle” has not been defined under the
Gujarat Tax Act rather sub-Section (10) of Section 2 of the
said Act provides that words and expressions not defined
under the said Act shall have the same meaning as assigned
to them under the Act.
34. Section 2 (10) is reproduced herein below:
“2. In this Act, unless the context otherwise
requires:-
……………………………………………………………..
(10) other words and expressions used, but not
defined, in this Act, shall have the meanings
respectively assigned to them in the Motor
Vehicles, 1988 or the rules made thereunder.”
13
35. In view of the above provision of Section 2 (10) of the Act as
motor vehicle has not been defined under the Gujarat Tax
Act, it has to be assigned the same meaning as is contained
in the Act.
36. The Act defines “motor vehicle” under Section 2 (28) of the
Act. It reads as under:
“ 2. Definitions -In this Act, unless the context
otherwise requires.-
……………………………………………………………..
(28) “motor vehicle” or “vehicle” means any
mechanically propelled vehicle adapted for the
use upon roads whether the power of propulsion
is transmitted thereto from an external or
internal source and includes 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
14
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.
38. 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
15
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 various certificates of the
manufacturers and suppliers as well as those issued by the
Automotive Research Association of India amply demonstrate
that the aforesaid vehicles used by the appellant are special
type of vehicles meant for use only within the factory
premises or the enclosed premise. They are all off-road
vehicles that do not ordinarily ply on roads. Since, they do
not run on the roads, the manufacturers and suppliers do
not even issue any certificate of road worthiness in respect of
these vehicles. In short, 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
stands excluded from the definition of the motor
ex-facie
16
vehicle as contained in Section 2 (28) of the Act, more
particularly by virtue of the second part of the definition.
39. In view of the above, we can safely conclude that though 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.
40. There is another reason for excluding the above vehicles used
by the appellant from the ambit of the motor vehicles. The
Central 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
17
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 exceeding the maximum rate specified in the first, second
and third Schedule of the Act. If we go to the first schedule
to the Gujarat Tax Act, we find that against each type of
motor vehicles maximum annual rate of tax has been
specified. However, under Item (ii) of Item (f) under Item VI of
the First Schedule, though we find mention of motor vehicles
exceeding particular specification and/or any construction
equipment vehicles but there is no corresponding rate of tax.
18
If the aforesaid entry in the Schedule I is read, it would
demonstrate that the Schedule prescribes no rate of tax on
construction equipment vehicles i.e., the vehicles as used by
the appellant. Therefore, it can again be concluded that the
vehicles used by the appellants are special type of vehicles
which stand excluded from the definition of motor vehicles
and, at the same time, being construction equipment
vehicles, are not chargeable to tax. The Gujarat Tax Act itself
does not provide for any rate of tax for collection of any tax
from such vehicles.
43. It is for the above reason that the Ministry of Road Transport
and Highways (MoRTH) had issued circular dated
13.07.2020 to clarify that vehicles as used by the appellants
i.e., vehicles of special type or those used in construction
activity, if are not being run on roads, do not qualify to be
motor vehicles and regular registration. The said circular
may not override the express provisions of law but
nonetheless, is binding upon the departmental authorities as
7
has been held in K.P. Varghese vs. ITO .
7
(1981) 4 SCC 173
19
44. On a composite reading of Section 3 of the Gujarat Tax Act,
the definition of motor vehicles under Section 2 (28) of the
Act, the definition of construction equipment vehicles
contained in Rule 2 (cab) of the Rules and Schedule I of the
Gujarat Tax Act, it is crystal clear that the vehicles of the kind
used by the appellant which are special vehicles i.e.,
construction equipment vehicles may be suitable for plying
upon roads are essentially meant to be used in a factory or
an enclosed premises and as such are not chargeable to tax
under the Gujarat Tax Act. Even otherwise in view of the
language employed in Entry 57 of List II of Seventh Schedule
of the Constitution of India, no authority is authorized to levy
or collect tax on vehicles which are not suitable for use on
roads and have been designed for off-road use in 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
20
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 roads in the State. This
Court further observed that the vehicles such as dumpers,
rockers and tractairs are though suitable for use on roads
but in the light of the pleadings as they were used only within
the enclosed premises specifically for the industrial purpose,
they cannot be held liable for taxation. It was categorically
21
held that if a vehicle does not use the public roads, it cannot
be taxed. It was also observed that if a vehicle merely moves
from one place to another, it need not necessarily be a motor
vehicle. It also holds that vehicles though registered under
the Act as motor vehicles need not be subjected to tax if
otherwise those vehicles do not ply on roads.
46. The vehicles used by the appellant undeniably are not used
on roads and are not even kept for use on roads.
47. However, in the case of Natwar Parikh & Co. Ltd. vs.
8
State of Karnataka & Ors. a three-Judge Bench of this
Court without over ruling Bolani Ores Ltd. (supra) 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.
48. The aforesaid decision in the case of Natwar Parikh & Co.
Ltd. (supra) has simply held that the “goods carriage”
requires a permit under the Motor Vehicles Act and therefore,
8
(2005) 7 SCC 364
22
they are “motor vehicles”. However, it failed to consider
whether the vehicles in question which are allegedly special
type vehicles or construction equipment vehicles specially
designed to be used in factory premises or in the enclosed
premises and not on the public roads would be covered by
motor vehicles. Therefore, the above decision has no
application to the facts and circumstances of the present
case.
49. A three-Judge Bench of this Court in Western Coalfields
9
Limited vs. State of Maharashtra & Anr . simply referring
to the earlier decisions of this Court in Natwar Parikh &
Co. Ltd. (supra) 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.
50. Since, the decision in the case of Western Coalfields
Limited (supra) is based upon Natwar Parikh & Co. Ltd.
(supra) in holding that excavators fall within the meaning of
definition of “motor vehicles” as contained in Section 2 (28)
9
(2016) 11 SCC 613
23
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 &
10
Ors. , Union of India and Ors. vs. Chowgule and Co. Pvt.
11
Ltd. & Ors. , M/s Central Coal Fields Ltd. vs. State of
12
Orissa & Ors. , Chief General Manager, Jagannath Area
& Ors. (supra) , Bose Abraham vs. State of Kerala &
13
Anr. , 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 specific exclusion as contained in the second
10
(1980) 3 SCC 619
11
1992 Supp (3) SCC 141
12
1992 Supp (3) SCC 133
13
(2001) 3 SCC 157
24
part of Section 2 (28) of the Act which defines “motor
vehicles”. As stated earlier, the vehicles or the construction
equipment vehicles used by the appellants are “motor
vehicles” within the first part of the definition as contained in
Section 2 (28) but they stand excluded by virtue of the second
part of the said definition. This aspect of the matter has not
been specifically considered by any of the above decisions.
Moreover, all these decisions simply brushes aside Bolani
Ores Ltd. (supra) without actually ruling it out on the ground
that it relates to “motor vehicles” as defined under the old Act
without realising that there was no material change between
the definition of “motor vehicles” in the old or present Act.
52. If the principle laid down by the above decisions that vehicles
either used or kept for use in the State irrespective of whether
they are suitable for plying on roads or not or whether they
are special type of vehicles meant to be used only in enclosed
premises are subjected to tax is accepted, it will lead to an
anomaly. It may be noted that aircrafts specially those
belonging to Air Force are capable of landing on the highways
and they can after taxing on the highway can also take-off
25
from there, and as such would be vehicles suitable for use on
roads which will make them motor vehicles liable for
registration under the Act and payment of road tax within the
ambit of various State Acts. Similar would be the case with
the tanks belonging to Army inasmuch as they are also
suitable to ply on roads if necessary and keeping them for
use within any State would attract their registration as motor
vehicles liable to payment of tax. This cannot be the intention
of the legislature in prescribing the definition of the motor
vehicles under the Act and to impose tax thereupon. In this
view of the matter, the principle laid down by the above
decisions cannot be accepted and applied in an absolute form
on all motor vehicles ignoring the distinction between normal
motor vehicles and the motor vehicles of special kind such as
heavy construction equipment or special type of vehicles
which are meant to be used within a specified area and not
on public roads.
53. One another decision in the case of Chairman, Rajasthan
State Road Transport Corporation & Ors. vs. Santosh &
26
14
Ors. was cited. The 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
14
(2013) 7 SCC 94
27
concerned is not deriving any benefit from the public
infrastructure, he should not be burdened with the motor
vehicle tax.
55.
In view of the aforesaid discussion specially considering the
pleadings and the material on record, we are of the conclusive
opinion 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
28
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.
56.
Accordingly, the impugned judgments and orders dated
15.07.2011 and 19.12.2012 passed by the High Court of
Gujarat are set aside and the appeals are allowed with no
order as to cost.
.............……………………………….. J.
(PANKAJ MITHAL)
.............……………………………….. J.
(PRASANNA B. VARALE)
NEW DELHI;
JANUARY 08, 2026.
29