BOSE ABRAHAM ETC.versusSTATE OF KERALA AND ANR.

A                             BOSE ABRAHAM ETC.
                                           v.
                         STATE OF KERALA AND ANR.

                                FEBRUARY I, 2001

B            [S. RAJENDRA BABU AND Y.K. SABHARWAL, JJ.]


           Kera/a Tax on Entry of Motor Vehicles into local Areas Act. Section
    20) and 3-Constitutiona/ validity of Section 3 challenged in writ petitions-
    Dismissed by the High Court-On appeal, Held: The incidence of taxation
C   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-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 being
    liable for registration under the Motor Vehicles Act-Mere fact of a Motor
D   Vehicle being put to a specific use such as confined to an enclosed premises,
    will not render the same to be a different kind of vehicle-Motor Vehicles Act,
    1988, Section 2(28).

          Constitution of India, 1950 : Schedule VII list II Entries 52 and 57-
    Va/idity of Section 3 of Kera/a Tax on En11y of Motor Vehicles into local
E   Areas Act.

          According to Section 3 of the Kera la Tax on Entry of Motor Vehicles
    into Local Areas Act, tax was to be levied and collected on the entry of any
    motor vehicle into any local area for use or sale therein which was liable for
    registration in the State under the Motor Vehicles Act, 1988 at rates fixed
F   by the Government by notification. A 'motor vehicle' has also been defined
    under Section 2 (28) of the said Entry Tax Act. Challenge to exigibility of
    excavators and road rollers to entry tax under the said Act was upheld by the
    High Court. Appeal before a Division Bench of the High Court was also
    dismissed. Hence these appeals.
G
           The appellants contended that the excavators and road rollers were not
    motor vehicles to fall under the definition of 'motor vehicle' under section
    2(j) of the said Entry Tax Act. It was also contented that 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, still it could not
H                                         808
                              BOSE ABRAHAM v.'STATE                              809
                   a
     be termed as motor vehicle in the sense it is adaptable to be used on road A
     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. It was
     further contended that the incidence of payment of entry tax before the
     registration is not proper.

           Dismissing the appeals, the Court                                            B

           HELD : I. 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   C
     a local area for sale, use or consumption therein.1811-G-H; 812-AI

           Boiani Ores ltd. v. State of Orissa, 119741 2 SCC 777; Mis.Central
     Coal Fields ltd. v. State ofOrissa & Ors., 11992) Suppl. 3 SCC 133; Goodyear
     India ltd. v. Union of India & Ors., 11997) 5 SCC 752 and Diamond Sugar
     Mills Ltd. & Anr. v. The State of Uttar Pradesh & Anr., 11961) 3 SCR 242, D
     referred to.

           2. Section 2 (j) of the Entry Tax Act defines 'motor vehicle' to mean a
     motor vehicle as defined in Section 2(28) of the Motor Vehicles Act. Subject
4-   to the provisions of the Entry Tax Act, Section 3 thereof enables the levy and
     collection of tax on the entry of any motor vehicle into local area for use or     E
     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. 1812-B-DI
                                                                                        F
           3. 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 G
     render the same to be a different kind of vehicle. (812-D-E(

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6216-6222
     of 1997.

           From the Judgment and Order dated 25.2.97. and 17.3.97. of the Kerala H
    810                       SUPREME COURT REPORTS                      [2001] I S.C.R.

A High Court in· W.A. No. 1289, 1417, 1407, 1409/96 and O.P. No. 18232, 19645/96
    and W.A. No. 1404of1996.

                                               With

          C.A. Nos. 8866-8869/97, 1542 and 2779of1998.

B         H.N. Salve Solicitor General, Ms. B. Vijayalaksmi Menon, Ms. Anuradha
    Dutt, G. Prakash, Mrs. Beena Prakash, B.V. Deepak and Vinod M.P. for the
    appearing parties.

          The Judgment of the Court was delivered by

C          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
D   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
E   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
F   enables the registering authority to collect the tax even before the registration
    is not pennissible 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.

G         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
H           (i)   the excavators and road rollers are not motor vehicles to fall
               BOSE ABRAHAM v. STATE (RA.IENDRA BABU. J.]                   81 I

               under the definition of motor vehide under Section 2(j) of the      A
               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     B
               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.
                                                                                   c
      In support of the first contention, the learned counsel for the appellant
relied upon the decision of this Court Boiani Ores ltd v. State of Orissa.
[ 1974] 2 SCC 777, wherein this Court dealt with dumpers, rockers and tractors.
In Mis Central Coal Fields Ltd. v. State ofOrissa & 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     D
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       E
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.
                                                                                   F
      In the light of the conclusions reached by the High Court an(!, the
contentions urged on behalf of the appellant before us, what we have to bear
in mind is th~ 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 G
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 H
    812                      SUPREME COURT REPORTS                   [2001) I S.C.R.

A 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
B                  therein.

          Section 20) 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
C   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 wider 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.
D
        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
E 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
F 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.

G R.C.K.                                                       Appeals dismissed.