2001 (2) TMI 890 - SC - Indian Laws

Whether motor vehicle as defined in section 2(28) of the Motor Vehicles Act would include excavators and road rollers so as to attract the levy under Kerala Tax on Entry of Motor Vehicles into Local Areas Act, 1994? Held that - Appeal dismissed. 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. 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.

Summary

Issues:
1. Constitutional validity of the Entry Tax Act challenged before the High Court of Kerala.
2. Whether excavators and road rollers are considered "motor vehicles" under the Entry Tax Act.
3. Incidence of payment of entry tax before registration.

Analysis:

1. The constitutional validity of the Entry Tax Act was challenged before the High Court of Kerala but was upheld. The Act came into force on July 5, 1994, levying and collecting tax on the entry of motor vehicles into local areas for use or sale, as per rates fixed by the Government. The High Court dismissed petitions challenging the exigibility of excavators and road rollers to tax under the Act.

2. The definition of a "motor vehicle" under the Entry Tax Act aligns with that of the Motor Vehicles Act, 1988. The High Court held that vehicles capable of being adapted for road use are considered "motor vehicles" and are liable for tax under the Act. Even if vehicles like excavators and road rollers are primarily used in enclosed areas or for specific purposes, if they are suitable for road use and registered under the Motor Vehicles Act, they fall under the definition of "motor vehicles" for tax purposes.

3. The question of whether excavators and road rollers qualify as "motor vehicles" under the Act was analyzed. The appellants argued against their classification as motor vehicles, citing specific usage scenarios and legal precedents. However, the Court emphasized that the focus should be on the scope of taxation under the Act, which pertains to the entry of goods into local areas for consumption, use, or sale. The Court upheld the High Court's decision, stating that vehicles suitable for road use and registered under the Motor Vehicles Act are subject to tax under the Entry Tax Act, regardless of specific usage contexts.

In conclusion, the Supreme Court affirmed that excavators and road rollers are considered motor vehicles under the Entry Tax Act if they are capable of road use and registered under the Motor Vehicles Act. The Court rejected arguments against their classification and upheld the High Court's decision, emphasizing the tax implications based on the vehicles' registration status and road usability. The judgment dismissed the appeals, indicating that the assessment of tax liability under the Entry Tax Act would consider whether a motor vehicle has entered a local area for tax purposes.