1. Dispute regarding whether heavy earth moving machinery and construction equipment used within enclosed factory premises are motor vehicles liable for registration and tax under the Motor Vehicles Act. (Para 2 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 14 , 15 )
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2026 Supreme(SC) 48
SUPREME COURT OF INDIA
PANKAJ MITHAL, PRASANNA B. VARALE, JJ.
Ultratech Cement Ltd. – Appellant
Versus
The State of Gujarat & Ors. – Respondents
Civil Appeal Nos. 3352-3353 of 2017 With Civil Appeal No. 3357 of 2017 And Civil Appeal No. 3358 of 2017
Decided On : 08-01-2026
Advocates appeared:
For the Appellant : Mr. P. Chidambaram, Sr. Adv., Mr. Nakul Dewan, Sr. Adv., Mr. Mahesh Agarwal, Adv., Mr. Ankur Saigal, Adv., Mr. Rohan Talwar, Adv., Mr. Himanshu Saraswat, Adv., Mr. Uday Aditya Jetley Pocha, Adv., Mr. Naman Agarwal, Adv., Ms. Adya Joshi, Adv., Mr. Satyender Saharan, Adv., Mr. Rohan Andrew Naik, Adv., Ms. Ishika Garg, Adv., Mr. Sathvik Chandrashekar, Adv., Mr. E. C. Agrawala, AOR
For the Respondents: Mr. K. Parameshwar, Sr. Adv., Ms. Deepanwita Priyanka, AOR, Mr. Prasad Hegde, Adv., Ms. Veda Singh, Adv., Ms. Priyal Sheth, Adv.
For the Appellant : Mr. P. Chidambaram, Sr. Adv., Mr. Nakul Dewan, Sr. Adv., Mr. Mahesh Agarwal, Adv., Mr. Ankur Saigal, Adv., Mr. Rohan Talwar, Adv., Mr. Himanshu Saraswat, Adv., Mr. Uday Aditya Jetley Pocha, Adv., Mr. Naman Agarwal, Adv., Ms. Adya Joshi, Adv., Mr. Satyender Saharan, Adv., Mr. Rohan Andrew Naik, Adv., Ms. Ishika Garg, Adv., Mr. Sathvik Chandrashekar, Adv., Mr. E. C. Agrawala, AOR
For the Respondents: Mr. K. Parameshwar, Sr. Adv., Ms. Deepanwita Priyanka, AOR, Mr. Prasad Hegde, Adv., Ms. Veda Singh, Adv., Ms. Priyal Sheth, Adv.
Heavy Earth Moving Machinery, intended for off-road use only, do not qualify as 'motor vehicles' under the Motor Vehicles Act and are not subject to taxation, as confirmed by expert certifications.
Headnote:(A) Motor Vehicles Act, 1988 - Section 2(28) - Gujarat Motor Vehicles Tax Act, 1958 - Definition of 'motor vehicle' in context of Heavy Earth Moving Machinery and special services vehicles - The court ruled that such vehicles, not designed for road use and confirmed by expert certificates as off-road, do not qualify as 'motor vehicles' subject to taxation. (Paras 17, 36, 55)
(B) Taxation Authority - Competence of the State to levy tax on vehicles - Article 265 of the Constitution states taxation can only be levied where permitted by law. Vehicles not suitable for road use are excluded from taxation under the definition of 'motor vehicles'. (Paras 26, 31)
Facts of the case:
The appellant is engaged in cement manufacturing and utilizes heavy machinery for operations confined to enclosed premises. The issue arose after the Transport Commissioner demanded road tax on such vehicles, declaring them 'motor vehicles'.
Findings of Court:
The court concluded that the vehicles in question fall outside the definition of 'motor vehicles' due to their designated use being confined to non-road operations. Thus, they are not liable for road tax under the Gujarat Tax Act.
Issues: The main legal question is whether Heavy Earth Moving Machinery employed for operations entirely within a factory setting qualify as 'motor vehicles' and are subject to road taxation.
Ratio Decidendi: Vehicles designed solely for off-road operations do not meet the definition of 'motor vehicles' within the Act; hence, they cannot be taxed as such under the Gujarat Tax Act. Expert certifications support their non-road usage. (Paras 36, 55)
Result: Appeals allowed, judgments of the High Court set aside.
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Table of Contents
2. Appellants argue off-road vehicles are not suitable for road use; State contends the charging provision applies to all motor vehicles regardless of their specific use. (Para 17 , 18 , 19 , 20 , 22 , 23 , 24 )
3. The court examined the constitutional limit on taxation, the statutory definition of motor vehicles, and the specific exclusion of vehicles adapted for use only in enclosed premises. (Para 25 , 26 , 28 , 29 , 30 , 31 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 )
4. Vehicles of a special type adapted for use only in factories or enclosed premises are excluded from the definition of motor vehicles and are not taxable. (Para 37 , 38 , 39 , 44 , 55 )
5. Impugned High Court judgments set aside and appeals allowed. (Para 56 )
6. Does the definition of motor vehicle under Section 2(28) of the Motor Vehicles Act, 1988 include vehicles used only in factories?
No. While the first part of the definition is inclusive, the second part expressly excludes vehicles of a special type adapted for use only in a factory or in any other enclosed premises. (Para 36 , 37 , 38 , 39 )
7. What is the constitutional limitation on the State's power to levy tax on vehicles?
Under Entry 57 of List II of the Seventh Schedule of the Constitution, the State is competent to levy and collect tax only on vehicles that are suitable for use on roads. (Para 26 , 27 , 28 , 31 , 44 , 55 )
8. Are construction equipment vehicles designed for off-highway operations taxable as motor vehicles?
No. Such vehicles are special-type construction equipment meant for enclosed premises. If they are not run on roads, they do not qualify as motor vehicles and are not chargeable to road tax. (Para 40 , 41 , 42 , 44 , 55 )
9. Does the registration of a vehicle under the Motor Vehicles Act automatically make it liable for road tax?
No. Even if a vehicle is registered, it is not subject to tax if it does not ply on public roads and is not suitable for road use. (Para 20 , 45 )
JUDGMENT :
PANKAJ MITHAL, J.
1. Heard Shri P. Chidambaram, senior counsel appearing for the appellant-Ultratech Cement Ltd. in Civil Appeal Nos. 3352-3353/2017 and Shri Nakul Dewan, senior counsel appearing for the 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 , 19881[Hereinafter referred to as ‘the Act’] and are liable to be taxed under the Gujarat Motor Vehicles Tax Act, 19582[Hereinafter referred to as ‘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/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 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 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 simi
