Vikram Ispat (A Unit Of Grasim ... vs State Of Maharashtra And 3 Ors.
2003 Latest Caselaw 1084 Bom

ORDER

Shah, J.

1. The petitioner is a limited company engaged in the production of sponge (sic) in Village Salav in Raigad District. The petitioner holds large tracts of land for that purpose. No member of the public is allowed to enter thee areas without prior permission. In order to carry out its activities, the petitioner put to use machinery within its areas, of a variety. But in the instant case, we are concerned with only one of them i.e pay loader which seemingly is similar to a dumper with a difference that the dumper has a bucket on the back side whereas the pay loader has a bucket in front which is smaller in size and which is hydraulically operated and can pick up a fixed amount of material depending upon its capacity. It's steering system is also hydraulically operated and its turning radius is more than the ordinary transport vehicles. Major deployment of the pay loaders is stated to be in mines and mines related activities where material is picked up by pay loader and discharged in dumpers for onward transportation of material at distant location. The pay loaders are also said to be deployed in industries like cement, mineral processing, steel etc. where raw material feeding is done by using such special type of equipments.

2. On 7th November 2001, the petitioner's pay loader which was plying on a public road was seized by the Motor Vehicles Inspector. According to the petitioner, this pay loader was used as there was failure of conveyor system at the private jetty and the plying on the road is not the normal use of the vehicle. According to the petitioner, the pay loaders do not transport either men or material from place to place. They generally remain stationery at the specified points at the factory premises. Their movement is restricted for shifting of raw materials semi-finished, products and finished products in the enclosed factory premises and private jetty area of the Company. It is the case of the petitioner that the pay loader is not adaptable to ply on any road whether private or public. The pay loader which was detained by the authorities came to be released on 16th March 2002. In the meanwhile, show cause notices were issued by the Dy. Regional Transport Officer - Respondent No. 4 who is also the taxation authority to the petitioner and after granting personal hearing to the petitioner, the fourth Respondent vide order dated 5th March 2002 held that the pay loader is a motor vehicle within the meaning of Section 3 of the Motor Vehicles Act, 1988 and, therefore, the registration of the pay loader is mandatory. The fourth Respondent directed the petitioner to register all pay loaders including the one detained by them failing which he shall proceed against the petitioner in accordance with the provisions of Motor Vehicles Act and the rules thereunder. By further order dated 6th March 2002, the fourth Respondent held that the pay loaders of the petitioner are liable for taxation under the provisions of the Bombay Motor Vehicles Tax Act, 1958 and the demand notices bearing the same date were issued to the petitioner to pay the road tax along with penal interest for the period February 1994 to April 2002. In his order, the fourth Respondent has referred to Rule 2(ca) of the Central Motor Vehicles Rules, 1989 which lays down the definition of 'Construction Equipment Vehicle'. The constitutional validity of the said Rules 2(ca) is also sought to be challenged in the present petition. It has, however, been clarified by the respondent that the provisions of Rule 2(ca) are not attracted to the present case.

3. Mr. Tulzapurkar, learned counsel appearing for the petitioner has not pressed the challenge to the vires of Rule 2(ca) as it has been fairly conceded by the respondents that this rule has no application for the present case. The learned counsel, however, strongly submitted that the pay loader is a vehicle not adapted for use upon the roads and therefore, it is outside the scope of Section 2(b) of the Vehicle Tax Act and hence, not within the ambit of charging section. Section 3(2) of the vehicle Tax Act provides that subject to the other provisions of the Act, there shall be levied on motor vehicles used or kept for use within the State, a tax at the rate specified under the Schedule. It is evident that tax is chargeable on using or keeping for use a motor vehicle adapted for use on roads. The question is whether pay loader is a motor vehicles adapted for use on roods. Section 3(28) of the Motor Vehicles Act defines the "Motor Vehicle" or "Vehicle" to mean any mechanically propelled and adapted for 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 special type adapted for use only in a factory or in any other enclosed premises or vehicle having less than four wheels fitted with engine capacity of not exceeding twenty five cubic centimetres. The definition of motor vehicle has been considered by the Supreme Court in M/s. Central Coal Fields Ltd. v. State of Orissa , where the Court after tracing the legislative history and the decisions commencing from M/s. Bolani Ores Ltd. v. State of Orissa and Ors repelled argument of the mine owners who used dumpers within their mining premises to the effect that the dumpers are vehicles not adapted for use upon roads and, therefore, are outside the Taxation Act and held that these dumpers run on types in marked contrast to chain plates like caterpillars or military tanks. It was also held that by the use of tyres, it is evident that they have been adapted for being used on roads, which means that they are suitable for being used on public roads and on the mere fact that they are required at places to run at a particular speed is not to detract form the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles makes it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the dumpers or rockers are heavy and cannot move on the roads without damaging them does not mean that they are not suitable for use on roads. The word "adapted" in the provision was read as "suitable" in Bolani Ores case by interpretation on of the strength in language in Entry 57 List II of the Constitution.

4. The taxation of dumpers again came up for consideration in the case of Union of India v. Chogle & Co.Ltd . In this case, an argument was advanced that dumpers are used only in mining operation within mining area and are not actually used on roads nor are suitable for use on roads and therefore, are not taxable. The Judicial Commissioner of Goa, Daman and Diu accepted the contention and allowed the appeal. Union of India had gone in appeal to the Supreme Court. The Court reversed the decision of the Judicial Commissioner of Goa, Daman and Diu and relying upon the earlier decision in Central Coal Fields Ltd. V. State of Orissa held that the mere fact that dumpers were used solely on the premises of the owner, or that they were in closed premises or permission of the authorities was needed to move them from one place to another, or that they are not intended to be used or are incapable of being used for general purposes, or that they have an unladen and laden capacity depending on their weight and size, is of no consequence for, dumpers are vehicles used for transport of goods and thus liable to pay compensatory tax for the availability of roads for them to run upon commission. The law laid down in Central Coal Field Limited and M/s. Chogle & Co. Pvt. Ltd was re-iterated in Chief G.M. Jagannath Area and Ors. v. State of Orissa and Anr. . In that case, the Supreme Court expressly rejected the contention that since dimension of the dumper exceeded the permissible dimensions under the Motor Vehicles Rules, there was an embargo to be used on public roads and as such, vehicles could not be held to be motor vehicles and could not therefore, be taxed under the Orissa Motor Vehicles Taxation Act. The Court observed that it cannot be held that the vehicles in question were not adapted or suitable or capable of being used on public roads, even though for most of the time they might actually be used within the mining areas on the roads prepared by them.

5. In the instant case, we are concerned with the pay loader which has a chassis, engine, drivers cabin and wheels and has a mobility and is obviously capable for using on public roads. It may be that it is not as convenient or advantageous as any other public carrier or goods vehicle which is commonly used for transport of goods when it is used for a similar purpose outside a factory or an enclosed premises. This circumstance in itself is not sufficient to bring the vehicle within the scope of the exemption mentioned in the definition of the "motor vehicle". The test in all these cases would be that if the vehicle is reasonably suitable for being used along with the public roads, the fact that manufacturers have made or intended a particular vehicle for one purpose or the other or the dealer has sold it for a particular purpose or that a particular vehicle is described by a particular name or description, is no criterion to decide whether the vehicle is adapted for use upon the roads within the meaning of the definition given in Section 5(28) of the Motor Vehicles Act. If the vehicle is fit and suitable for being used on the road, it is immaterial whether it runs on a private road or on a public road unless it is shown that it is of a special type adapted for use only in factories or enclosed premises and incapable of running on any type of roads or public roads. The pay loader must, therefore, held to be 'motor vehicle' within the meaning of the Motor Vehicles Act. We may mention that the Division Bench of this Court in Ishardas & Co. v. State of Maharashtra and Anr. specifically the argument that the motor crane is a vehicle of special type adapted for use only in factory or in any other enclosed premises. The Court observed that ..... "motor cranes are of various types having varying and different capacities of hooks, heights, chassis, travel speeds and hoists speeds. The crane in question has mobility and is also suitable for use in public road so far as the movement is concerned. It has a tendant wire of 1' long, book wire of 3' in length, with working loan of 16 tonnes and 3.5 tonnes respectively. The crane has a driver's cab with two seats one to drive the motor vehicle itself and another for operating the crane, the derrick unit and the hoist unit. The key word in the amended definition is "only" and the question to ask is : Is the mobile crane mean only for use in the enclosed place?..... As the mobile crane can be used at any place accessible by road, it cannot be said that the vehicle is for a special type adapted for use only in a factory or in any other enclosed premises within the meaning of Section 2(18) of the Act as amended by Act 1956. Thus in the present case, the question to ask is : Is the pay loader mean only for use in the enclosed place? The answer is obviously in negative.

6. Mr. Tulzapurkar, learned counsel for the petitioner placed reliance on the decision of the Supreme Court in Goodyear India Ltd. v. Union of India and Ors. . The question involved in that case was whether tyres of the size 1800 and above manufactured for fitment to heavy moving vehicles such as dumpers and earth movers are exigible to excise duty as "tyres for motor vehicles". In that context, the Supreme Court has observed in paragraph No. 10 as follows:

"A. close reading of the definition "motor vehicle in Item 34 reveals that the striking ingredient thereof is that if should have been "adapted for the use upon roads". Merely because the areas on which such heavy movers traverse might sometimes include roads also is not enough to hold that they were adapted for use upon roads. Such use of the heavy mover on the road may only be ancillary or incidental to the main use of it. Emphasis in the definition must be on the words "use upon road" as those words would denote the principal or dominant use and not where it may move incidentally".

7. Relying on the aforesaid observations. Mr. Tulzapurkar sought to argue that in order to decide the question of adaptability the dominant purpose for which the vehicle is to be used has to be seen and since in the instant case, the dominant use of the pay loader is in factory premises, it cannot be said to be a motor vehicle. We are unanle to accept the submission of Mr. Tulzapurkar. It has been consistently held by the Supreme Court that the real test is whether the vehicle is suitable to ply on the public road. The decision of Goodyear India Ltd was considered by another bench of the Supreme Court in Bose Abraham v. State of Kerala and Anr. reported in Vol.II Sales Tax cases 614. The issue in that case was whether the excavators and road rollers were motor vehicles under Section 2(j) of the Kerala Tax on Entry of Motor Vehicles into Local Areas Act 194. The Court concluded as follows:-

"We hold that the excavators and road rollers are motor vehicles for the purpose of the Motor Vehicles Act and they are registered under that Act. The High Court has noticed the admission of the appellants that the excavators and road rollers are suitable for use on roads. However, the contention put forth now is that they are intended for use in the enclosed premises. Merely because a motor vehicle is put to a specific use such as being confined to an enclosed premises, will not render the same to be a different kind of vehicle. Hence, in our view, the High Court has correctly decided the matter and the impugned order does not call for any interference by us. However, the question whether any motor vehicle has entered into a local area to attract tax under the Entry Tax Act or any concession given under the local Sales Tax Act will have to be dealt with in the course of assessment arising under the Entry Tax Act"

In the light of above discussion, it is not possible to accept the contention of the petitioner that the pay loader is not a motor vehicles within the meaning of Section 3(28) of the Motor Vehicles Act.

8. Mr. Tulzapurkar urged that if the vehicles do not use the roads, notwithstanding they are registered under the Act, they cannot be taxed. He submitted, that in the present case, pay loaders are not used on public roads and therefore, the imposition of tax is not justified. In this connection, he relied upon the decision of the Supreme Court in Travancore Tax Co. v. State of Kerala . The submission is totally misconceived. If the motor vehicle is not used on public roads then the owner of the vehicle is required to follow the procedure prescribed by the rules in order to claim exemption from payment of tax. Otherwise, there is a presumption that the vehicle is used on the road. The following observations of the Court in Travancore Tea Co.'s case are pertinent.

"If the words 'used or kept for use in the State' are construed as used or kept for use on the public roads of the State, the Act would be in conformity with the powers conferred on the State legislature under Entry 57 of List II. If the vehicles are suitable for use on public road they are liable to be taxed. In order to levy a tax on vehicles used or kept for use on public roads of the State and at the same time to avoid evasion of tax the legislature has prescribed the procedure. Sub-section (2) of Section 3 provided that the registered owner or any person having possession of or control of a motor vehicle of which a certificate of registration is current shall for the purpose of this Act be deemed to use for kept such vehicles for use in the State except during any period for which the Regional Transport Authority has certified in the prescribed manner that the motor vehicle has not been used or kept for use. Under this sub-section there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State. This provision safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State. At the same time the interest of the bonafide owner is safeguarded by enabling him to claim and obtain a certificate of non-user from the prescribed authority. In order to enable the owner of the vehicle or the person who is in possession or being in control of the motor vehicle of which the certificate of registration is current to claim exemption from tax he should get a certificate in the prescribed manner from the Regional Transport Officer."

9. Therefore, if the petitioner wants to establish that it spay loaders are not used on roads it must follow the procedure prescribe by the Act and the Rules.

10. In the result, petition fails and is dismissed with costs.

Ad-interim order of status quo dated 12th June 2003 to continue for a period of four weeks.