The Supreme Court examined whether various construction equipment used by cement manufacturers within their factory premises constitute 'motor vehicles' liable for registration and tax under motor vehicle statutes -- The appellants used Dumpers, Loaders, Excavators, Surface Miners, Dozers, Drills and Rock Breakers exclusively within enclosed factory areas, transported in dismantled condition on trailers -- Manufacturers certified these as off-road vehicles not designed for road use -- The Court interpreted Section 2(28) of Motor Vehicles Act, 1988 in light of constitutional Entry 57 which limits taxation to vehicles suitable for use on roads -- Following Bolani Ores precedent, the Court held these vehicles fall outside definition of 'motor vehicle' as they are not adapted for road use -- The Gujarat High Court judgment was reversed, show cause notice quashed, and deposited amounts ordered refunded .
Taxation Law – Motor Vehicles – Motor Vehicles Act, 1988 – Section 2(28) – Gujarat Motor Vehicles Tax Act, 1958 – Section 3 – Entry 57, List II, Seventh Schedule – Constitution of India--The Supreme Court allowed civil appeals filed by Ultratech Cement Ltd. and others against the judgment of Gujarat High Court dated 15.07.2011 -- The Court held that Heavy Earth Moving Machinery and construction equipment used exclusively within factory premises and transported in dismantled condition are not 'motor vehicles' under Section 2(28) of Motor Vehicles Act, 1988 -- These vehicles were certified by manufacturers as off-road equipment not meant for use on public roads -- Entry 57 of List II, Seventh Schedule of Constitution of India permits taxation only of vehicles suitable for use on roads -- The Court relied on precedent Bolani Ores Ltd. vs. State of Orissa which established that vehicles not adapted for use on roads fall outside taxation purview -- The show cause notice demanding registration and tax was quashed and deposited amounts ordered to be refunded. (Paras 26–39, 42–45, 55)
Motor Vehicles Law – Registration and Tax – Off-Road Vehicles – Precedents – Circulars --Registration of vehicles under Motor Vehicles Act does not ipso facto create tax liability – Vehicles not using or kept for use on public roads cannot be subjected to road tax – Bolani Ores Ltd. principle reaffirmed: “adapted for use on roads” means suitable and intended for road use – Decisions in Natwar Parikh and Western Coalfields distinguished for not considering exclusion under second part of Section 2(28) – Construction equipment vehicles constitute a special category – MoRTH Circular dated 13.07.2020 clarifying off-road equipment though not overriding statute, binding on authorities – Taxation without road usage held non-compensatory and unconstitutional – Appeals allowed – High Court judgments set aside – Amounts paid under protest refundable.
(Paras 45–56)
The Supreme Court allowed all civil appeals -- Quashed the show cause notice dated 09.11.2006 -- Directed refund of amounts deposited by appellants -- Held that Heavy Earth Moving Machinery and construction equipment used exclusively within factory premises are not 'motor vehicles' under Section 2(28) of Motor Vehicles Act, 1988 and not liable for registration or tax.
Citation: 2026 LawText (SC) (01) 44
Case Number: Civil Appeal Nos. 3352-3353 of 2017, Civil Appeal No. 3357 of 2017, Civil Appeal No. 3358 of 2017
Date of Decision: 2026-01-08
Case Title: 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, 1988 and are liable to be taxed under the Gujarat Motor Vehicles Tax Act, 1958
Before Judge: Pankaj Mithal J. , Prasanna B. Varale J.
Equivalent Citations: 2026 INSC 43
Advocate(s): Shri P. Chidambaram, Shri Nakul Dewan, Shri K. Parameshwar
Appellant: Ultratech Cement Ltd., Other Appellants in Connected Appeals
Respondent: State of Gujarat & Ors.
Nature of Litigation: Civil appeals challenging Gujarat High Court judgment regarding classification of construction equipment as motor vehicles
Remedy Sought: Appellants sought quashing of show cause notice demanding registration and tax payment, and refund of deposited amounts
Filing Reason: Dispute over whether Heavy Earth Moving Machinery used within factory premises constitute 'motor vehicles' liable for registration and tax
Previous Decisions: Gujarat High Court dismissed petition holding vehicles were motor vehicles chargeable to tax -- Regional Transport Officer had issued show cause notice demanding registration fee, tax, arrears with interest and penalty
Issues: Whether construction equipment used exclusively within factory premises fall within definition of 'motor vehicle' under Section 2(28) of Motor Vehicles Act, 1988 Whether such vehicles are liable for registration and taxation under Gujarat Motor Vehicles Tax Act, 1958
Submissions/Arguments: Appellants argued vehicles are off-road equipment not suitable for use on roads as per manufacturer certifications -- Constitutional Entry 57 limits taxation to vehicles suitable for use on roads -- Ministry of Road Transport and Highways circular supports classification as off-road equipment Respondent State argued vehicles fall within definition of motor vehicles and are liable for registration and tax regardless of actual road use
Ratio Decidendi: The definition of motor vehicle under Section 2(28) of Motor Vehicles Act, 1988 must be interpreted in light of constitutional Entry 57 which permits taxation only of vehicles suitable for use on roads -- Vehicles designed and used exclusively as off-road equipment, transported in dismantled condition and confined to private premises, do not qualify as motor vehicles -- Manufacturer certifications and expert opinions establishing off-road nature are material considerations -- Precedent Bolani Ores Ltd. establishes that vehicles not adapted for road use fall outside taxation purview.
Judgment Excerpts: The common question of law is whether Heavy Earth Moving Machinery or special services vehicles or any construction equipment vehicles are motor vehicles within the ambit of Section 2(28) of the Motor Vehicles Act, 1988 Entry 57 of List II of the Seventh Schedule of the Constitution of India permits taxation only of vehicles suitable for use on roads. Bolani Ores Ltd. vs. State of Orissa squarely answers the question raised in these appeals
Procedural History: 1996: Regional Transport Officer acknowledged Dumpers within private premises do not require registration -- 1999: Transport Commissioner directed registration of all special service vehicles -- 2000: Inspection conducted and registration demanded -- 2002: Assistant Regional Transport Officer reiterated vehicles fall within definition -- 2006: Show cause notice issued demanding registration fee, tax, arrears with interest and penalty -- 2011: Gujarat High Court dismissed petition holding vehicles were motor vehicles chargeable to tax -- 2017: Appeals filed before Supreme Court -- 2026: Supreme Court allowed appeals and quashed show cause notice
