Motor Vehicles Act | In-Plant Excavators, Dumpers, Loaders And Dozers Not Motor Vehicles To Attract Road Tax; Supreme Court
Kiran Raj
The Supreme Court of India Division Bench of Justices Pankaj Mithal and Prasanna B. Varale has set aside the Gujarat High Court’s decision and allowed an appeal by a cement manufacturer challenging the State’s levy of road tax on Heavy Earth Moving Machinery used within its plant sites. The dispute arose after transport authorities treated off-highway construction equipment—such as excavators, dumpers, loaders and dozers—as “motor vehicles” and sought registration, tax and allied dues running into crores, despite their deployment being confined to enclosed premises. The Court held that such special-type vehicles, when adapted and used only within a factory or other enclosed premises, fall outside the definition of “motor vehicle” under Section 2(28) of the Motor Vehicles Act and are not liable to road tax. Source:
The appellants, engaged in cement manufacturing, used dumpers, loaders, excavators, surface miners, dozers, drills and rock breakers exclusively within enclosed industrial premises. Initially, the Regional Transport Officer acknowledged that such vehicles did not require registration. Subsequently, transport authorities directed compulsory registration and payment of road tax, treating the machinery as “motor vehicles” under the Motor Vehicles Act, 1988 and the Gujarat Motor Vehicles Tax Act, 1958. Show cause notices demanding tax, interest and penalty were issued, and amounts were deposited under protest.
The appellants challenged the demands, relying on manufacturer certificates and expert opinions stating that the vehicles were designed exclusively for off-road industrial use and transported in dismantled condition. The High Court upheld the tax demands, holding the vehicles to be motor vehicles. The appeals before the Supreme Court questioned whether such equipment fell within the statutory definition of “motor vehicle” and whether they were liable to road tax despite exclusive use within enclosed premises.
The Court examined the constitutional and statutory framework governing motor vehicle taxation. It observed that “Article 265 of the Constitution of India clearly provides that tax shall not be levied or collected except by the authority of law” and noted that Entry 57 of List II permits taxation only of vehicles “suitable for use on roads.”
While analysing the Gujarat Motor Vehicles Tax Act, the Court recorded that “the Gujarat Tax Act cannot travel beyond Entry 57 of List II of the Seventh Schedule of the Constitution of India so as to tax vehicles which are not suitable for being used on roads.”
Interpreting Section 2(28) of the Motor Vehicles Act, the Court stated that “the definition of ‘motor vehicle’ is in two parts, the first being inclusive and the second being exclusive,” and clarified that vehicles “of a special type adapted for use only in a factory or in any other enclosed premises” are expressly excluded.
On facts, the Court observed that “the vehicles used by the appellants are special type of vehicles meant for use only within the factory premises or enclosed premises,” and further noted that “they are all off-road vehicles that do not ordinarily ply on roads.”
The Court relied on manufacturer and expert certifications, recording that “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… are special type of vehicles meant for use only within the factory premises.”
The Court further observed that “even though such vehicles may be capable of being used on roads, essentially they are not meant for use on roads and are transported on trailers.” Referring to precedent, it recorded that “the view taken finds full support from the three-Judge Bench decision in Bolani Ores Ltd.,” which held that vehicles not using public roads are not taxable.
It was also observed that “Schedule I of the Gujarat Tax Act does not prescribe any rate of tax for construction equipment vehicles,” reinforcing the conclusion that such vehicles are not eligible to tax when confined to enclosed premises.
The Court directed that “the impugned judgments and orders dated 15.07.2011 and 19.12.2012 passed by the High Court of Gujarat are set aside. The appeals are allowed with no order as to cost.”
The Court clarified that construction equipment vehicles used exclusively within factory or enclosed premises “stand excluded from the purview of the ‘motor vehicle’ as defined under Section 2(28) of the Act and are not chargeable to road tax. If any such kind of vehicles are found using roads, they would not be free from 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 law.”
Advocates Representing the Parties
For the Appellants: Shri P. Chidambaram, Senior Advocate; Shri Nakul Dewan, Senior Advocate, Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Mr. Rohan Talwar, Adv. Mr. Himanshu Saraswat, Adv. Mr. Uday Aditya Jetley Pocha, Adv. Mr. Sathvik Chandrashekar, Adv. Mr. Naman Agarwal, Adv. Mr. E. C. Agrawala, AOR.
For the Respondents: Shri K. Parameshwar, Senior Advocate, Ms. Deepanwita Priyanka, AOR Mr. Prasad Hegde, Adv. Ms. Veda Singh, Adv. Ms. Priyal Sheth, Adv.
Case Title: Ultratech Cement Ltd. v. State of Gujarat & Ors.
Neutral Citation: 2026 INSC 43
Case Numbers: Civil Appeal Nos. 3352–3353 of 2017; Civil Appeal Nos. 3357 & 3358 of 2017
Bench: Justice Pankaj Mithal, Justice Prasanna B. Varale
