SC Holds Off-Road Construction Equipment Not ‘Motor Vehicles’; Gujarat Road Tax Demands Quashed:

SC Holds Off-Road Construction Equipment Not ‘Motor Vehicles’; Gujarat Road Tax Demands Quashed Ultratech Cement Ltd. operated heavy earth-moving machinery such as dumpers, excavators, loaders, and surface miners exclusively within its factory and enclosed mining premises in Gujarat. The machinery was not used on public roads and was transported only in dismantled form on trailers. While the Regional Transport Officer initially accepted that registration was not required, the Transport Department later treated the equipment as “motor vehicles” and demanded registration, road tax, interest, and penalty under the Motor Vehicles Act, 1988 and the Gujarat Motor Vehicles Tax Act, 1958. The Gujarat High Court upheld the levy, leading Ultratech to appeal before the Supreme Court. Main Issue: Whether heavy earth-moving machinery used exclusively within a factory or enclosed premises can be treated as “motor vehicles” liable to registration and road tax. SC Decided: The Supreme Court allowed all the appeals and set aside the High Court judgments. The Court held that although such machinery may appear to fall within the inclusive part of the definition of “motor vehicle”, it is expressly excluded by the latter part of Section 2(28), which excludes vehicles of a special type adapted for use only in a factory or enclosed premises. The Court emphasised that taxation under Entry 57 of List II of the Seventh Schedule is permissible only for vehicles suitable for use on public roads. Off-road construction equipment, used solely within industrial premises and deriving no benefit from public road infrastructure, cannot be subjected to road tax. Relying on Bolani Ores Ltd. v. State of Orissa, the Court reiterated that “adapted for use upon roads” means “suitable for use on roads” and not merely capable of movement. It also noted that the Gujarat Motor Vehicles Tax Act does not prescribe any rate of tax for construction equipment vehicles. Therefore, the Court held that such off-road machinery is neither liable for registration nor for road tax unless it is actually used on public roads. To Read Full Judgment, Download PDF Given Below