Miss Lucy
Try free
← All judgments

Bose Abraham vs State Of Kerala & Anr

Supreme Court1 February 2001S. Rajendra Babu

Ratio decidendi

The rule this decision rests on

Where a motor vehicle is defined identically in both a state entry tax statute and the central Motor Vehicles Act, and the vehicle is registered under the Motor Vehicles Act, the vehicle remains subject to entry tax under the state statute even if it is capable of being used on roads but is in fact put to use only in enclosed premises or for specialized purposes, because actual use does not change the character of the vehicle as a motor vehicle liable for registration. The scope of Entry 52 of List II of the Seventh Schedule to the Constitution, which governs tax on entry of goods into a local area for use or consumption, requires only that goods have entered a local area for the purpose of use or sale therein; it is not limited by the restrictions applicable to Entry 57, which governs motor vehicle taxation based on suitability for use on roads.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

CASE NO.:Appeal (civil) 6216-6222 of 1997Appeal (civil) 8866-8869 of 1997Appeal (civil) 1542 of 1998Appeal (civil) 2779 of 1998
PETITIONER:BOSE ABRAHAM
Vs.
RESPONDENT:STATE OF KERALA & ANR.
DATE OF JUDGMENT: 01/02/2001
BENCH:S. Rajendra Babu & Y.K. Sabharwal.
JUDGMENT:
L...I...T.......T.......T.......T.......T.......T.......T..JRAJENDRA BABU, J. :
Before the Kerala High Court petitions under Article 226of the Constitution were filed challenging the exigibilityof excavators and road rollers to tax under the Act. Thefacts stated are as follows : The Entry Tax Act came intoforce on 5.7.1994. Under Section 3, tax is levied andcollected on the entry of any motor vehicle into any localarea for use or sale therein which is liable forregistration in the State under the Motor Vehicles Act, 1988at such rate or rates as may be fixed by the Government bynotification. Constitutional validity of the Entry Tax Actwas challenged before the High Court of Kerala but wasupheld.
The Entry Tax Act defines a motor vehicle as isdefined under the Motor Vehicles Act. The High Court wasinfluenced by the fact that registration is done under theMotor Vehicles Act and also requires licence for drivingunder that Act and these aspects clearly indicate that thevehicle is a motor vehicle. So long as such vehicle iscapable of being adapted for use on roads, it hasnecessarily to be held to be motor vehicle and is liableto be taxed under the Act. On the contention that Section18 of the Act which enables the registering authority tocollect the tax even before the registration is notpermissible is also rejected stating that the amount ofentry tax paid under the Act is liable to be deducted out ofthe general sales tax payable by the appellant for thepurchase of the vehicle, and dismissed the writ petitions.
The short question that arises for consideration inthese appeals is whether motor vehicle as defined inSection 2(28) of the Motor Vehicles Act would includeexcavators and road rollers so as to attract the levy underKerala Tax on Entry of Motor Vehicles into Local Areas Act[hereinafter referred to as the Act]. The learned counselfor the appellant submitted that
[i] the excavators and road rollers are not motorvehicles to fall under the definition of motor vehicle underSection 2(j) of the Act;
[ii] even if the excavators and road rollers areconstrued to be motor vehicles for the purpose of the MotorVehicles Act in order to regulate the usage thereof will notbe a motor vehicle in the sense it is adaptable to be usedon road inasmuch as excavators are used in an enclosed areawhile road rollers are used for the purpose of making roadsand not as a vehicle on road;
[iii] incidence of payment of entry tax before theregistration is not proper. In support of the firstcontention, the learned counsel for the appellant reliedupon the decision of this Court Bolani Ores Ltd. v. Stateof Orissa, 1974(2) SCC 777, wherein this Court dealt withdumpers, rockers and tractors. In M/s Central Coal FieldsLtd. v. State of Orissa & Ors., 1992 Supp. (3) SCC 133¸and again in Goodyear India Ltd. v. Union of India Ors.,1997 (5) SCC 752, the position has been clarified. Thelearned counsel also relied upon the decision in DiamondSugar Mills Ltd. & Anr. v. The State of Uttar Pradesh &Anr., 1961(3) SCR 242, in support of the contentionsaforesaid. It is submitted that in respect of theexcavators and road rollers the circumstance that they wereused solely for the purpose of the owner or that they wereused in closed premises, or permission of the authoritieswas needed to move them from one place to another, or thatthey were not intended to be used or were incapable of beingused for general purposes, or that they had an unladen andladen capacity depending upon their weight and size, was ofno consequence inasmuch as these vehicles are of a specialtype adapted for use only for a factory or in any otherenclosed premises.

In the light of the conclusions reached by the High Court and the contentions urged on behalf of the appellant before us, what we have to bear in mind is the scope of Entry 52 of List II of the Seventh Schedule to the Constitution which provides for tax on entry of goods into local area for sale, use or consumption. This Court in the decisions referred to by the learned counsel to which we have adverted to earlier was concerned only with those cases where tax arising under motor vehicles tax enactments coming under Entry 57 of List II of the Seventh Schedule to the Constitution fell for consideration. Under Entry 57 of List II of the Seventh Schedule to the Constitution, what is required to be considered is a tax on vehicle which is suitable for use on roads. But the incidence of taxation in the context of Entry 52 of List II of the Seventh Schedule to the Constitution is entry of goods into a local area for sale, use or consumption therein. The essential features thereof being

[i] the entry of goods into a definite local area;

[ii] the goods must be for the purpose of consumption, use or sale therein.

Section 2(j) of the Act defines motor vehicle to mean a motor vehicle as defined in Section 2(28) of the Motor Vehicles Act, 1988 [Central Act 59 of 1988]. Subject to the provisions of the Act, Section 3 of the Act enables the levy and collection of tax on the entry of any motor vehicle into local area for use or sale therein which is liable for registration in the State under the Motor Vehicles Act at such rate as may be fixed by the Government. Therefore, in order to attract tax under the provision of Section 3 of the Act, a motor vehicle must have entered into a local area for use or sale therein and secondly which is liable for registration under the Motor Vehicles Act.

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. Appeals are accordingly dismissed.

This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.

Research this judgment with Miss Lucy

Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.

Try Miss Lucy free