ULTRATECH CEMENT LIMITED v. THE STATE OF GUJARAT
Taxation of Motor Vehicles: Construction Equipment Vehicles Used Exclusively in Factories are Not Taxable Under the Motor Vehicles Act.
Court: Supreme Court of India
Citation: 2026 INSC 43
Decision Date: 08-01-2026
List of Laws
The Motor Vehicles Act, 1988; The Gujarat Motor Vehicles Tax Act, 1958; Constitution of India, Entry 57 of List II, Seventh Schedule
- Facts: Ultratech Cement Ltd. uses heavy earth moving machinery (Dumpers, Loaders, Excavators, Dozers, etc.) within its cement plants in Gujarat. The Regional Transport Officer initially acknowledged that these vehicles, used within private premises, did not require registration. Later, the Transport Commissioner directed registration of special service vehicles, including Dumpers, and demanded road tax. Ultratech protested, arguing these vehicles were not "motor vehicles" as defined by the Motor Vehicles Act, 1988, and were not meant for on-road use.
- Procedural Posture: Ultratech approached the High Court of Gujarat to quash the show cause notice demanding registration and tax, and for a refund of deposited amounts. The High Court dismissed the petition, holding the vehicles were "motor vehicles" under the Act and chargeable to tax. This led to the present appeal before the Supreme Court.
- Issue: Are Heavy Earth Moving Machinery or special service vehicles/construction equipment vehicles used exclusively within factory premises "motor vehicles" within the meaning of Section 2(28) of the Motor Vehicles Act, 1988, and liable to be taxed under the Gujarat Motor Vehicles Tax Act, 1958, considering Entry 57 of List II of the Seventh Schedule of the Constitution of India?
- Holding: No, the vehicles used by the appellant, being special types of construction equipment vehicles meant for operation within industrial/factory premises and not for use on roads, are not "motor vehicles" under Section 2(28) of the Motor Vehicles Act, 1988, and are not chargeable to tax under the Gujarat Motor Vehicles Tax Act, 1958.
- Reasoning: The Court reasoned that Section 2(28) of the Motor Vehicles Act contains an exclusionary clause for vehicles of a special type adapted for use only in a factory or enclosed premises. The vehicles in question fall under this exclusion. Furthermore, Entry 57 of List II of the Seventh Schedule of the Constitution authorizes taxation only of vehicles "suitable for use on roads." The Gujarat Tax Act cannot extend beyond this constitutional limitation. The Court distinguished previous decisions, noting they did not adequately consider the exclusionary clause in Section 2(28) and emphasized that the vehicles were not designed or used for public roads, as evidenced by manufacturer certifications. The court also noted that the Gujarat Tax Act does not prescribe any tax for construction equipment vehicles.
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