ULTRATECH CEMENT LTD.versusTHE STATE OF GUJARAT & ORS.

                  [2026] 1 S.C.R. 467 : 2026 INSC 43

                        Ultratech Cement Ltd.
                                   v.
                      The State of Gujarat & Ors.
                  (Civil Appeal No(s). 3352-3353 of 2017)
                               08 January 2026
           [Pankaj Mithal* and Prasanna B. Varale, JJ.]


                           Issue for Consideration
       Issue arose 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 s.2(28)
       of the Motor Vehicles Act, 1988 and are liable to be taxed under
       the Gujarat Motor Vehicles Tax Act, 1958.

                                  Headnotes†
       Gujarat Motor Vehicles Tax Act, 1958 – s.3(1) – Motor Vehicles
       Act, 1988 – s.2(28) – Motor Vehicles – Road Tax – 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., if “motor vehicles” within the ambit of s.2(28) of the 1988
       Act and liable to be taxed under the Gujarat Motor Vehicles
       Tax Act – Appellant for manufacturing work at cement plants,
       using various Heavy Earth Moving Machinery/construction
       equipment or special services vehicle, if liable to pay road
       tax on those vehicles under the Gujarat Tax Act:
       Held: Vehicles used by the appellants not chargeable to tax –
       Vehicles used by the appellants are vehicles of special types-
       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 u/s.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


* Author
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       even chargeable to road tax in view of Schedule I to s.3(1) of the
       Gujarat Tax Act which do not prescribe any tax for such kind of
       vehicles i.e., construction equipment vehicles – However, if any
       such kind of vehicles are found to be used on roads, they would
       not be free from the rigors of s.2(28) of the Act and s.3 of the
       Gujarat Tax Act and also be subject to proceedings for seizure
       and penalty – Impugned judgments and orders holding that the
       vehicles/equipment used by the appellants particularly Dumpers
       were “motor vehicles” under the Act and chargeable to tax, set
       aside – Constitution of India – Entry 57 of List II of the Seventh
       Schedule. [Paras 55, 56]

                               Case Law Cited
       Bolani Ores Ltd. v. State of Orissa [1975] 2 SCR 138 : (1974) 2
       SCC 777; Tarachand Logistic Solutions Limited v. State of Andhra
       Pradesh & Ors., 2025 SCC OnLine SC 1851; Chief General
       Manager, Jagannath Area & Ors. v. State of Orissa & Anr. [1996]
       Supp. 6 SCR 570 : (1996) 10 SCC 676; State of Gujarat & Ors. v.
       Akhil Gujarat Pravasi V.S. Mahamandal & Ors. [2004] 3 SCR 956 :
       (2004) 5 SCC 155; K.P. Varghese v. ITO [1982] 1 SCR 629 : (1981)
       4 SCC 173; Travancore Tea Estates Co. Ltd v. State of Kerala &
       Ors. [1980] 3 SCR 1388 : (1980) 3 SCC 619; Union of India and
       Ors. v. Chowgule and Co. Pvt. Ltd. & Ors. [1992] 2 SCR 992 :
       (1992) Supp. 3 SCC 141; M/s Central Coal Fields Ltd. v. State of
       Orissa & Ors. [1992] 2 SCR 982 : (1992) Supp. 3 SCC 133; Bose
       Abraham v. State of Kerala & Anr. [2001] 1 SCR 808 : (2001) 3
       SCC 157 – referred to.
       Natwar Parikh & Co. Ltd. v. State of Karnataka & Ors. [2005] Supp.
       2 SCR 1100 : (2005) 7 SCC 364; Western Coalfields Limited v.
       State of Maharashtra & Anr. (2016) 11 SCC 613; Chairman,
       Rajasthan State Road Transport Corporation & Ors. v. Santosh &
       Ors. [2013] 3 SCR 720: (2013) 7 SCC 94 – held inapplicable.

                                 List of Acts
       Motor Vehicles Act, 1988; Gujarat Motor Vehicles Tax Act, 1958;
       Constitution of India; Central Motor Vehicle Rules, 1989.

                              List of Keywords
       Heavy Earth Moving Machinery; Special services vehicles;
       Construction equipment vehicles; Tax; Chargeable to road tax;
[2026] 1 S.C.R.                                                         469

            Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     Industrial area; Factory premises; Roads; Public roads; Off-road
     equipments; Motor vehicle; Seizure and penalty; Registration fee;
     Arrears of tax.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
     3352-3353 of 2017
     From the Judgment and Order dated 15.07.2011 and 05.10.2012 of
     the High Court of Gujarat at Ahmedabad in SCA No. 4704 of 2007,
     RP No. 2598 of 2012, and SCA No. 4704 of 2007, respectively.
     With
     Civil Appeal No(s). 3357 and 3358 of 2017

                         Appearances for Parties
     Advs. for the Appellant(s):
     P. Chidambaram, Nakul Dewan, Sr. Advs., Mahesh Agarwal, Ankur
     Saigal, Rohan Talwar, Himanshu Saraswat, Uday Aditya Jetley
     Pocha, Sathvik Chandrashekar, Naman Agarwal, E. C. Agrawala.
     Advs. for the Respondent(s):
     K. Parameshwar, Sr. Adv., Ms. Deepanwita Priyanka, Prasad
     Hegde, Ms. Veda Singh, Ms. Priyal Sheth.

                 Judgment / Order of the Supreme Court

                                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
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       Miners, Dozers, Drills, Rock Breakers etc. are “motor vehicles” within
       the ambit of Section 2 (28) of the Motor Vehicles Act, 19881 and are
       liable to be taxed under the Gujarat Motor Vehicles Tax Act, 19582.
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,



1    Hereinafter referred to as ‘the Act’
2    Hereinafter referred to as ‘the Gujarat Tax Act’
[2026] 1 S.C.R.                                                         471

          Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     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 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.
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
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       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
    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 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.
19. Moreover, Bolani Ores Ltd. vs. State of Orissa3, squarely answers
    the question raised in these appeals wherein it has been held that


3   (1974) 2 SCC 777
[2026] 1 S.C.R.                                                        473

            Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     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 & Ors.4, wherein
    it has been held that vehicles operating 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 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, Jagannath Area & Ors. vs. State
    of Orissa & Anr.5 and State of Gujarat & Ors. vs. Akhil Gujarat
    Pravasi V.S. Mahamandal6 & Ors., would prevail.


4   2025 SCC OnLine SC 1851
5   (1996) 10 SCC 676
6   (2004) 5 SCC 155
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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 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 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
[2026] 1 S.C.R.                                                        475

          Ultratech Cement Ltd. v. The State of Gujarat & Ors.


           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 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.”
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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 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
[2026] 1 S.C.R.                                                        477

          Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     vehicles which have been made suitable for use only in a factory and
     an enclosed premises rather than for 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 ex-facie stands excluded from the definition of the motor
     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 manufactured with “on or off” or “on and
    off” highway capabilities.
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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. 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 has
    been held in K.P. Varghese vs. ITO7 .
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


7   (1981) 4 SCC 173
[2026] 1 S.C.R.                                                        479

          Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     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 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 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.
480                                                         [2026] 1 S.C.R.

                         Supreme Court Reports


47. However, in the case of Natwar Parikh & Co. Ltd. vs. State of
    Karnataka & Ors.8 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, 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 Limited
    vs. State of Maharashtra & Anr.9 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) 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 & Ors.10, Union of India



8    (2005) 7 SCC 364
9    (2016) 11 SCC 613
10   (1980) 3 SCC 619
[2026] 1 S.C.R.                                                         481

             Ultratech Cement Ltd. v. The State of Gujarat & Ors.


      and Ors. vs. Chowgule and Co. Pvt. Ltd. & Ors.11, M/s Central
      Coal Fields Ltd. vs. State of Orissa & Ors.12, Chief General
      Manager, Jagannath Area & Ors. (supra), Bose Abraham vs.
      State of Kerala & Anr.13, 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 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 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


11   (1992) Supp. 3 SCC 141
12   (1992) Supp. 3 SCC 133
13   (2001) 3 SCC 157
482                                                        [2026] 1 S.C.R.

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       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 & Ors.14 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
    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


14   (2013) 7 SCC 94
[2026] 1 S.C.R.                                                       483

             Ultratech Cement Ltd. v. The State of Gujarat & Ors.


     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 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.

     Result of the case: Appeals allowed.




     †
         Headnotes prepared by: Nidhi Jain