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CASE NO.: Appeal (civil) 6216-6222  of  1997 Appeal (civil)  8866-8869        of  1997 Appeal (civil)  1542     of  1998 Appeal (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..J RAJENDRA BABU, J. :

   Before the Kerala High Court petitions under Article 226 of  the Constitution were filed challenging the  exigibility of  excavators  and road rollers to tax under the Act.   The facts  stated are as follows :  The Entry Tax Act came  into force  on  5.7.1994.   Under Section 3, tax  is  levied  and collected  on the entry of any motor vehicle into any  local area   for  use  or  sale   therein  which  is  liable   for registration in the State under the Motor Vehicles Act, 1988 at  such rate or rates as may be fixed by the Government  by notification.   Constitutional validity of the Entry Tax Act was  challenged  before  the High Court of  Kerala  but  was upheld.

   The  Entry  Tax  Act  defines a motor  vehicle  as  is defined  under  the Motor Vehicles Act.  The High Court  was influenced  by the fact that registration is done under  the Motor  Vehicles  Act and also requires licence  for  driving under  that Act and these aspects clearly indicate that  the vehicle  is  a motor vehicle.  So long as such vehicle  is capable   of  being  adapted  for   use  on  roads,  it  has necessarily  to be held to be motor vehicle and is  liable to  be taxed under the Act.  On the contention that  Section 18  of  the Act which enables the registering  authority  to collect  the  tax  even  before   the  registration  is  not permissible  is  also  rejected stating that the  amount  of entry tax paid under the Act is liable to be deducted out of the  general  sales  tax payable by the  appellant  for  the purchase of the vehicle, and dismissed the writ petitions.

   The  short  question  that arises for  consideration  in these  appeals  is  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 [hereinafter referred to as the Act].  The learned counsel for the appellant submitted that

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   [i]  the  excavators  and  road rollers  are  not  motor vehicles to fall under the definition of motor vehicle under Section 2(j) of the Act;

   [ii]  even  if  the  excavators  and  road  rollers  are construed  to be motor vehicles for the purpose of the Motor Vehicles Act in order to regulate the usage thereof will not be  a motor vehicle in the sense it is adaptable to be  used on  road inasmuch as excavators are used in an enclosed area while  road rollers are used for the purpose of making roads and not as a vehicle on road;

   [iii]  incidence  of  payment of entry  tax  before  the registration  is  not  proper.   In  support  of  the  first contention,  the  learned counsel for the  appellant  relied upon  the decision of this Court Bolani Ores Ltd.  v.  State of  Orissa,  1974(2) SCC 777, wherein this Court dealt  with dumpers,  rockers and tractors.  In M/s Central Coal  Fields Ltd.   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.   The learned  counsel  also relied upon the decision  in  Diamond Sugar  Mills Ltd.  & Anr.  v.  The State of Uttar Pradesh  & Anr.,  1961(3)  SCR  242,  in  support  of  the  contentions aforesaid.   It  is  submitted  that   in  respect  of   the excavators  and road rollers the circumstance that they were used  solely for the purpose of the owner or that they  were used  in  closed premises, or permission of the  authorities was  needed to move them from one place to another, or  that they were not intended to be used or were incapable of being used  for general purposes, or that they had an unladen  and laden  capacity depending upon their weight and size, was of no  consequence inasmuch as these vehicles are of a  special type  adapted  for  use only for a factory or in  any  other enclosed 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 th e 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

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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.