Holding

The Court held that the categorisation of a motor vehicle for taxation under the Karnataka Motor Vehicles Taxation Act depends on its actual use, and a tractor‑trailer used for hauling goods is a goods carriage and thus a transport vehicle, making the taxation authority's assessment valid.

Summary

Natwar Parikh & Co. Ltd., a transporter of heavy equipment, used tractors (registered as non‑transport vehicles) coupled with trailers (registered as transport vehicles) to move transformers into Karnataka. The Karnataka taxation authority issued demand notices demanding motor‑vehicle tax on the tractor‑trailer combinations, treating them as transport vehicles requiring permits under Section 66 of the Motor Vehicles Act, 1988, and denying exemption under Section 16 of the Karnataka Motor Vehicles Taxation Act, 1957. The appellant argued that the tractors were non‑transport vehicles, that registration under Section 46 of the Motor Vehicles Act was effective nationwide, and that the taxation authority could not re‑classify the vehicles. The Supreme Court held that for tax purposes the categorisation of a vehicle depends on its actual use on the occasion; a tractor‑trailer used to haul goods constitutes a "goods carriage" and therefore a "transport vehicle" under the Motor Vehicles Act. Consequently, the taxation authority was correct in taxing the combination and the appeal was dismissed.

Issues considered

The taxation authority's power to classify a tractor‑trailer as a transport vehicle for tax purposes despite its registration as a non‑transport vehicle.
Whether exemption under Section 16 of the Karnataka Motor Vehicles Taxation Act, 1957 applies to the tractor‑trailer combination.
Whether the Motor Vehicles Act, 1988 can be read into the Taxation Act for purposes of classification and permit requirements.
Whether the use of a vehicle on a particular occasion determines its tax category.

Legislation cited

Constitution of Indias. Entry 57, List II, Seventh Schedule
Karnataka Motor Vehicles Taxation Act, 1957s. 16, s. 3(2), s. 4, s. 6, s. 7, s. 8
Motor Vehicles Act, 1988s. 2(14), s. 2(44), s. 2(46), s. 2(47), s. 41(4), s. 66

Subjects

motor vehicle taxtractor‑trailertransport vehiclegoods carriageexemptionSection 66Section 16use‑based classificationKarnataka Motor Vehicles Taxation ActMotor Vehicles Act

Judgment

. .
A NATWAR PARIKH AND CO. LID.
- v. I'
STATE OF KARNATAKA AND ORS .. . /

.·. ('
. SEPTEMBER l, .200S 1.
. ...
B ~ I .

[S.N._YARIAVA, S.H. KAPADIA AND TARu_N CHATTERJEE, JJ.)
I
!

Karnataka M~tor Vehicles Taxation Act; 1957-Sections 3 (2) and 16
Sche_d~le-ltem /o, Pari ~Motor' Vehicles A~t,_ 198~ections 2 (14), 2
. (44), 2 (46}, 2 (47), 41, 46; 66 and 88 (12)-Exemptionfrom tax payable by
C. tramport vehicle-Appellants used_ specially designed. tractors-trailers to
transpo;t goods-Tractor~ were registered as non-tra~port vehicles and
trailers registered as transpo~t vehicles-Taxation authorities assessed the
tractor-t;ailers as transport vehicles and issued demand notices as per their
, weight~Dep~ty Commissioner upheld dem~nd notices in apJX!~i-Writ petition
D filed, dismissed by Single Judge-Division Bench dismissed writ appeal-On
appeal-Held, use of a mot~r vehicle o~ the given occasion determines its
category, whether it is adopted for that purpose or not Categorization, of
tractor-:-trailer rightly made based on the use of it on the given Occasio~
Taxation Act to be read on its own force andnot with reference to the Motor
J-'ehicle Act-Tractor-trailer being a "goods carriage" consequently falls
E under the definition of "transport vehicle"-Constitution of india-List /J,
Entry 57.

The appellants being engaged in transportation of heavy equipment
made use·or tractors to push or pull trailers behind them, which entered
F the State of Karnataka. The tractorswere registered as non-transport _
vehicles and trailers were registered as tr~~sport vehicles. The taxation
authority issued four demand notices for payme~t, RS. 5.69 lacs as tax
under Section 3 (2) read with item 10 of Part B of the, schedule to the
Karnataka Motor Vehicles Taxation Act, 1957 on the ground that they
were transport vehicles, requiring permits under Section 66 of the Motor
G Vehicle Act, 1988, liable to pay. tax as per . weight
- -· -
appeal to the Deputy
Commissioner of Transport was dismissed. The appellant filed a writ
..
_ petitio-n in the High Court. The question for determination was whether
the taxation authority was right in taxing the "tractor-trailer" as a separate
· and distinct vehicle, different from a tractor and denying exemption
H sought under Section 16 of the Motor Vehicles Act, 1957 on the ground
1100
NATWARPARIKH & CO. LTD. v. STATE 1101

that tractor-trailer was a distinct c~tegory of "iood's carri~ge". requiring A
permit under Section.66 of the M.V. AcL Single Judge dismissed the writ
petitio'n. Division Bene~ d-ism~ssed the writ .appeal filed by the appel~ants~
Hence, this a,pp:eal~ . . __, _ l , . ~<
. . . - ., . .... ·
· Appellant contended tha_t its tractors were registered in Maharashtra ·B
as "nOn-tr~nsport _vehicles" whereas .the trailers were register~d in
Maharashtra as "transport-vehicles"; that the trailers were given national . .·
permits under Section 88 (12)' of theM.~. Act, which enabled them to ply
as "transport vehicles" in the State of Karnataka; that tbe word "tractor"
was defined in Section 2 (44) of the .M.V. Act, whereas the word "trailer"
was defined in Section 2 (46) oftheM.V. Act; that a certificate of registration. C
issued under Section 46 of the M.V. Act was effective throughout India .
and ifthedemand for tax was upheld, it would undermine the guarantee .. ·
given under Section 46 of the M.V. Act to the 'effect that registration of
a vehicle in one State shall be effective and in force throughout India; that
a tractor was used to pull a trailer or several trailers together on one D
occasion and it can also be used to pull another set on combinati_on of
trailers on other occasion and, therefore, the tractor-trailer combination
was not a fixed or a permanent combination; that the tax authorities
· sought to tax the tractor-trailer combination under Item 10 of Part-B of
the schedule to the Taxation Act, which imposed a tax on motor vehicles
used far haulage and did not tax a tractor-trailer combination; that Jtem E
10 of Part B did not tax a combination of tractor-trailer per se but only
taxed a tractor alone which is in the non-transport category and that if
a tractor was a transport vehicle, it would be taxable under Item 3 of Part
B of the Schedule to the Taxation Act; that Section 3 of the Taxation Act
was the charging section which levied tax on all motor vehicles suitable F
for use o~ the road; that since the motor vehicle was used for a period
not exceeding 30 days; the tax became leviable under Section 3 (2), but
for the exemption granted to non-transport vehicle and th~ reciprocal
agreement not to tax transport vehicles; that the effect or treating the
tractor as transport vehicle' while interpreting: exemption notification
amounted to reopening of the registration made under the M.V. Act, G
which was not permissible in law and that the taxation authority under
the Taxa~ion Act could not usurp the authority vested in the registering
authority under Section 41 of the M.V. Act; that the tractors·were of two
typ~s, the first type of tractor was designed and constructed by the
rna nu fact~ rer for exclusive use oftowing, pulling or ha u I ing being c:lassified H
1102 SUPREME COURT REPORTS [2005) SUPP. 2 S.C.R. -~

A as non-transport vehicles, not required to take permits under Section 66
of the M.V. Act as they are not transport vehicles but the second type of
tractors were called prime movers, that were disigned and constructed to
ca rry part of the load of the trailer, which were articulative vehicles and
required permit and fitness certificates applicable to transport vehicles,
B therefore, the distinction between an "articulative vehicle" and a "tractor"
of the first type would become obliterated; that the Central Government
issued notification dated 19.6.1992 under Section 41(4) of the M.V. Act
by which it classified motor vehicles into transport and non-transport
vehicles, wherein trailers were classified as tra nsport vehicles whereas
C tractors had been classifieds as non-transport vehicles; and that the taxation
a uthority was not entitled to create a new category of vehicles and insist
on compliance of Section 66 of the M.V. Act while denying exemption
under Section 16 of the Taxation Act.

Dismissing the appeal, the Court
D
HELD : I. Categorization of motor v~hicle for taxation und~r the
Taxation Act will depend upOJr tJte use of the motor vehicle on the give.!l
occasion, whether it is adapted for that purpose or not. The categorization
of tractor-trailer''by the taxation authority has been rightly made based
E on the 'Use of the motor vehicle on the given occasion. A tractor-trailer
~o n slsts of a tractor, which contains a cab, or a driver 's seat and a
compartment with a sleeping berth, the engine and the hood carried on
two axles or four axles. The trailer is a separate box car attached to the
tractor by what is called as the fifth wheel. The M.V. Act, 1988 replaced
the 1939 Act in order to rationalize certain definitions with the additions
F of new definitions of new types of vehicles a nd the Parliament kept in mind
the existel)ce of a vehicle classifiable as "tractor-trailer".
(1111-E-H; ll12-A; 1112-C-D)

State of Mysore v. Syed Ibrahim, A.I.R. (I 967) SC 1424, relied on.
G
2.1. Under Section 3 of the Taxation Act, levy of tax is on all motor
vehicles suitable for use on the roads. Under the proviso, tractors and
trailers used in the farms are excluded, as they a re not used on the roads.
The expression " suitable for use on r oads" finds place in Section 3 (1) as
H well as in Entry 57 list li of the Seventh Schedule to the Constitution.
NATWAR PARIKH & CO. LTD. v. STATE 1103

Tramways, railways and farm machinery though mechanically propelled A
are excluded, as they are not suitable for use on roads. Section 3 of the
Taxation Act and its explanation have to be construed on their own force.
The combined effect of Sections 3, 4, 6, 7 and 8 of the Taxation Act
empowers the State to levy tax on all motor vehicles, which are designed
and manufactured for use on the roads. [1110-B-C-D) B
2.2 Sections 3 and 4 of the Taxation Act have to be read on their own
force and not with reference to the provisions of the M.V. Act dealing with
registration of motor vehicles and issuance of fitness certificate.
' [1111-D-EJ

State of Karnataka v. K. Gopa/akrishna Shenoy & Anr., A.I.R. (1987)
c
SC 1911, relied on

3. The M.V. Act is an Act to consolidate and amend the law relating
to motor vehicles. It deals with various topics like registration of motor
vehicles, licensing of drivers of motor vehicles, control oftransport vehicles D
etc. but taxation is not its subject matter. Taxation herein falls under entry
57 list II of the seventh schedule to the Constitution, which is governed
by a separate code, the Karnataka Motor Vehicles Taxation Act, 1957.
{1112-D-EJ

State of Karnataka v. K. Gopalakrishna Shenoy & Anr., A.I.R. (1987) E
SC 1911, relied on

4. The words "motor vehicle" are to be read in the broadest possible
sense 1\eeping in mind that the Act has been enacted in order to keep
control over motor vehicles, transport vehicles etc. A combined reading
of the -definitions under Section 2 shows that the definition of "motor F
vehicle" includes any mechanically propelled vehicle apt for use upon
roads irr.tspective of the source of power and it includes a trailer. Even
though a ~railer is drawn by a motor vehicle, it by itself being a motor
vehicle, the tractor-trailer would constitute a "goods carriage" and
consequentlY, a "transport vehicle". The test is whether the vehicle is
proposed to be used for transporting goods from one place to another.
G
When a vehicle is so altered or prepared making it apt for use for
transporting ~ods, then it becomes adapted for the carriage of goods. The
tractor-trailer fell under Section 2 (14) as a "goods carriage" and
consequently, it feJI under the definition of "transport vehicle" under
Section 2 (47) of the M.V. Act. [1113-G-H; 1114-A-B-CJ H
- - : --- -

1104 - .._ SUPREME COURT REPORTS {2005] SUPP. 2 S.C.R.
. I ;_ . i "'/ ·.
A. CIVIL.APPELLATE JURISDICTION : Civil Appeal No; 4631 of2000.
~ • ' '' ! .~ . ' . /·
,1 ' ' . !

. From the Judgment and Order dated 23.9.99 of the Kamataka High.
Court in. W.A; No. 2324 of 1998. ·: ·· ; ·
. ·f

B Atul Y. Chitale~ Mri Suchitra Atul Chitle, Ms. Suje~ta Srivastava and
. Ms. Tarandeep Mahal for the Appellant. .
• ~. '· , . : •. ' .. • ~• • ~ ~ • • -.. I - : :

·Sanjay · R Heg~e, Anil . K.' Mishra an~ ~·: _Rohen Singh fo~ the
Respondents.

C The ~udgment of the Court was.delivered by

KAPADIA, J. : The short question which arises for detenni~ation in
this civil appeal, by special leave, is whether the taxation authority under.the
Kamataka Motor Vehicles Taxation Act, 1957 was right in taxing the "tractor-
D trailer'' as a separate and distinct vehicle, different from a tractor and denying
exemption sought by the ·appellant under section 16 of the said 1957 Act on .· ·'
.the ground that the tractor-trailer was a distinct category of "goods carriage~ . ·
. r~quiring permit under section 66 of the Motor Vehicles Act, 1988. ·
. -~ " : i ~

The brief facts which are relevant to be noticed as under:
E
_The appellant are transporters of heavy equipments using mech~nized
carriage , ~~pending upon ·the ite~s to be transported. :D_u~ing the period
8.12.1989 to 31.3.(990, they were .engaged by CentralPower Research
Institute of lndi<i (CPRI) to transpOrt for the~ six units_oftransformers from
F Madras P~rt to its site at Bangalore. The goods ~ere t~ be lifted from Madras
Port and . transported to CPR! , at Bangalore by vehicular transport mode
through the States ofTamilmidu, Andhra Pradesh andKarnataka. In the matter
of transportation .of over-dimensional cargo, the appellant. made use of a
drawing vehicle, called by the appellant as a tractor to push/pull the trailers
loaded with the abovementioned ~quipments.
G '. .. ··.
. ~- .. . -.
. ·.....·, Bern:jen 8.12.1989 and Jt.i. l990, three units ofthe tractor-trailer
carrying tiansfonners entered the State of Kamataka via Tamilnadu and
Andhra Pradesh. .• . · · ·

H On 18.1.1990, on account of the 'entry of three units of tractor-trailer,
NATWAR PARIKH & CO. LTD. v. STATE [KAPADIA, J.]" 1105

the taxation authority issued four demand notices calling upon the appellant A
to pay a sum of Rs.5.69 lacs as tax under section 3(2) read with item 10 of
part B of the schedule to the said 1957 Act on the ground that the said three
units were transport vehicles, which required pennits under section 66 of the
Motor Vehicles Act, 1988 and that the appellant was liable to pay the said
tax en the weight(s) of the three units.
B
Being aggrieved by the con finnation of the demand dated 7.2.1990, the
appellant moved the Deputy Commissioner of Transport, in appeal.

By his order dated 30.6.1990, the Deputy Commissioner of Transport
held that although the tractor and the trailer were separate independent motor C
vehicles, separately registrable, the tractor-trailer as a unit was a different
category of "goods carriage" requiring pennit under section 66 of the Motor
Vehicles Act, 1988, which was not obtained and, therefore, the appellant was
not entitled to the benefit of exemption under section 16 of the Taxation Act,
1957.
D
Being aggrieved by the said order dateq 30.6.1990, the appellant herein
moved the Kamataka High Court by way ofwrit petition no.1785l of 1990.
In the writ petition, the appellant pleaded that its tractors and trailers were
registered in the State ofMaharashtra as non-transport vehicles and transport
vehicles respectively; that they had obtained national penn its for their trailers E
under section 88( 12) of the M.V. Act, 1988 which enabled them to ply trailers
in the State of Karnataka; that tractors and trailers, though motor vehicles,
were separately defined under section 2(44) and under section 2(46) of the
M.V. Act, 1988; that under section 46 of the M.V. Act, a certificate of
registration was issued in respect of such vehicles which was effective for the
F
whole oft.'J.e country (including State ofKamataka) and that ifthe contention
of the department is upheld that the tractor-trailer is a distinct and separate
vehicle, distinct from the tractor, it would undennine and violate section 46
ofthe M. V. Act; that the registration of a vehicle in one State shall be effective
and in forc:e throughout India.
G
By judgment and order dated 27.3.1998, the learned single judge held
that the tractor by itself was not a "transport vehicle" but if it was used for
vcarrying goods or passengers then it became a "goods carriage" as defined
under section 2(14) and consequently, a transport vehicle under section 2(47)
of the M.V. Act; that the trailer by itself was inert and had to be pulled by H
1106 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A some motor vehicle; that if the tractor is used for carrying goods with the aid
of a trailer, it will constitute a "goods carriage" under section 2(14) and
consequently, a transport vehicle under section 2(47) of the M.V. Act liable
for permit under section 66 of that Act. In the circumstances, the learned
single judge dismissed_. the writ petition.
B
Aggrieved by the decision of the learned single judge, the appellant
carried the matter in appeal to the division bench ofth.! Karnataka High Court
by way of writ appeal no.2324 of 199&.

By impugned judgment dated 23.9.1999, the division bench of the High
C Court held that in the present case, the appeUant had obtained national permit
for the trailers but did not obtain permits for the tractor-trailer combination
under section 66 of the M.V. Act; that, under section 66, permits were
required to be obtained for such combinations as they came under the
definition of "goods carriage" under section 2(14) and consequently, under
D defmition of"transport vehicle" under section 2(46) of the M.V. Act; that any
vehicle though not constructed or adapted to carry goods became a "goods
carriage" when it was used for carrying the goods and, therefore, the tractor-
trailer combination would attract section 66 of the M.V. Act, requiring the
appellant to obtain permits for their combination(s) and since the appell.ant
failed to obtain such permits, the appellant became liable to pay tax under
E section 3 of the Taxation Act, 1957, notwithstanding registration of tractors
and trailers, as separate units, in the State of Maharashtra. For the above
reasons, the High Court dismissed the writ appeal filed by the appellant.
}i:ence, this civil appeal.

F Mr. Chitale, learned counsel for the appellant submitted that the tractors
of the appellant are registered in Maharashtra as "non-transport vehicle"
whereas the trailers are registered in Maharashtra as "transport-vehicles"; that
the trailers have been given national permits under section 88(12) of the M.V.
Act, which enables them to ply as "transport vehicles" in the State of
Kamataka; that the word "tractor" is defined in section 2(44) of the said 1988
G Act, whereas the word "trailer" is defined in section 2(46) of the said 1988
Act; that a certificate of registration issued under section 46 of the 1988 Act
was effective throughout India and if the contention of the taxation authority
in the present case is upheld, it shall undermine the guarantee given under
section 46 of the said 1988 Act to the effect that registration of a vehicle in
H one State shall be effective and in force throughout India. Learned counsel
NATWAR PARIKH & CO. LTD. v. STATE [KAPADIA, J.] 1107
....
submitted that in a zonal meeting of transport commissioners ofMaharashtra A
and Kamataka had agreed to treat the tractor as a non-transport vehicle and,
therefore, it was not open to the taxation authority to say that the tractor-trailer
was a transport vehicle. Learned counsel submitted that a tractor is used to
pull a trailer or several trailers together on one occasion and it can also be
used to pull another set on combination of trailers on other occasion and, B
therefore, the tractor-trailer combination is not a fixed or a permanent
combination. Learned counsel submitted that the tractors are of towing type
and they differ from "articulative vehicles" inasmuch the trailers are attached
lit
by tow bars and are not superimposed on the tractor and accordingly no part
of the load of the trailers is carried by the tractor. It was further submitted
on behalf of the appellant that the tax authorities have sought to tax the tractor- c
trailer combination under item I 0 of part-B of the schedule to the Taxation
Act, 1957. According to the learned counsel, item 10 imposes a tax on motor
vehicles used for haulage and does not tax a tractor-trailer combination; that
item 10 of Part B does not tax a combination of tractor-trailer per se but only
taxes a tractor alone which is in the non-transport category and that if a tractor D
was a transport vehicle, it would be taxable under item 3 of Part B of the
schedule to the Taxation Act. Learned counsel further submitted that section
3 of the Taxation Act is the charging section which levies tax on all motor
vehicles suitable for use on the road; that in the present case, since the motor
vehicle was used for a period not exceeding 30 days, the tax became leviable
under section 3(2), but for the exemption granted to non-transport vehicle and E
the reciprocal agreement not to tax transport vehicles. In this connection,
learned counsel has placed reliance on the notification issued by the State of
Kamataka on 12.10.1959 under section 16 of the 1957 Act. Learned counsel
submitted that the tractors are registered in the State of Maharahstra as non-
F
-
transport vehicles because they cannot carry goods on it and because its
purpose is only to draw and haul another goods carriage such as a "trailer".
On the other hand, according to the learned counsel, the trailers are registered
in the State of Maharashtra as transport vehicles because they carry goods on
it; that tractors and trailers are separately registered as motor vehicles; that
once the State of Maharashtra has recognized tractors as coming under non-
transport category vide registration certificates issued by it, it was not open
G
to the tax authorities in the State of Karnataka to go behind the registration
certificates issued by the State ofMaharashtra which conclusively established
that tractors were non-transport vehicles entitled to exemption under the
above notification dated 12.1 0. I 959; that the effect of treating the tractor as
transport vehicle while interpreting exemption notification amounts to reopening H
Jl08 SUPREME COURT REPORTS (2005] SUPP. 2 S.C.R.

A of the registration made under the said 1988 Act, which was not pennissible
in law and that the taxation authority under the Taxation Act cannot usurp
the authority vested in the registering authority under section 41 of the M.V.
Act, 1988. Learned counsel submitted that it. was not open to the taxation
authority to create a new category of motor vehicles requiring registration
B which function is that of the registering authority under the M.V. Act, 1988;
that once the taxation authority was satisfied that the tractor was registered
in the State ofMaharashtra in the non-transport category then the same ought
to have been accepted by the taxation authority under section 16 of the I 957
Act.

c Learned counsel next urged that the tractors are of two types. The first
type of tractor is designed and constructed by the manufacturer for exclusive
use of towing, pulling pr hauling. These are classifieds as non-transport
vehicles by the Central Government vide notification dated 19:6.1992. These
types of tractors are not required to take penn its under section 66 of the 1988
D Act as they are not transport vehicles. The second type of tractors are called
prime movers. They are designed and constructed to carry part of the load
of the trailer. They are articulative vehicles. They require penn it and fitness
certificates ~pplicable to transport vehicles. Learned counsel submits that if
the argument of the department in the present case is accepted, the distinction
-
E between "articulative vehicle" and a "tractor'' of the first type which is
designed only to pull/haul would be obliterated. Learned counsel further
submitted that the Central Government has issued notification dated 19.6.1992
under section 41 (4) of the 1988 Act by which it has classified motor vehicles
into transport and non-transport vehicles; and that under the said notification,
trailers have been classified as transport vehicles whereas tractors have been
F
classifieds as non-transport vehicles. Learned counsel submitted that the said
notification is binding on the taxation authority and, therefore, the taxation
authority was not entitled to embark upon the classification of motor vehicles
in the process of interpreting exemption notification under the Taxation Act.
The learned counsel, therefore, submitted that the taxation authority under the
G Taxation Act was not entitled to create a new category of vehicle and insist
on compliance of section 66 of the M.V. Act white denying exemption to the
appellant.

At the outset, we may point out that we are concerned with the period
H 1989-90 in this matter. •
NATWAR PARIKH & CO. LTD. v. STATE [KAPADIA, J.] 1109

To appreciate the above arguments, we have to consider the Schemes A
of the Taxation Act, 1957 and the M.Y. Act, 1988.

The Taxation Act has been enacted to consolidate and amend the law
relating to the levy oftax on motor vehicles in the State ofKamataka. Under
section 2(b) "taxation authority" is defined to mean such officer as may be B
pointed out by the State Government to exercise the powers and functions of
the Taxation Authority under the Act. Under section 20), it is provided that
the words and expressions used but not defined in the Taxation .\ct shall have
the meaning assigned to them in the M.V. Act, 1988. Section 3 is in Chapter
II, which deals with levy of tax. It is a charging section. It states that a tax
shall be levied at the rates specified in part A of the schedule to the Act. It C
is a levy on all motor vehicles suitable for use on roads. Under the second
proviso, it is laid down that Tractors and Trailers owned by the agriculturists
or exclusively used for agricultural operations shall be liable to pay tax at the
rates spscified in part A2 of the schedule. Section 3(2) begins with a non-
obstante clause. It states that notwithstanding anything contained in section D
3(1 ), taxes at the rates specified in part B of the schedule shall be levied on
motor vehicles suitable for use on roads, which are in the State for periods
shorter than a quarter, but not exceeding thirty days. In section 3(3), it is inter
alia laid down that in the case of motor vehicles in respect of which reciprocal
agreement relating to taxation ;~ entered into between the Government of
Karnataka and any other State Government, the levy of tax shall, E
notwithstanding anything contained in the Act, be in accordance with the
tenns and conditions of such reciprocal agreement. Section 4 c:.~als with
payments of tax. It inter alia provides that the tax levied under section 3 shall
be paid in advance by the registered owner or person having possession or
control ofthe motor vehicle, for a quarter, half-year or full year at his choice. F
It shall be paid in advance within fifteen days from the· commencement of
such quarter, half-year or year as the case may be. Under section 6, every
registered owner of a motor vehicle liable to tax under the Act is required
to sign a declaration in the prescribed form, giving the prescribed particulars
to the taxation authority and shall pay to such authority the tax in respect of
such vehicle. Under seCtion 6(2), when a motor vehicle liable to tax under G
the Act is altered, the registered owner or person in possession of such vehicle
shall be liable to pay additional tax under section 8. The owner is also required
to fill up and sign addition declaration in the prescribed fonn showing the
nature of alteration made and containing the prescribed particulars. Section
7 deals with refund of tax. Section 8 deals with payment of additional tax. H

,
A
1110 SUPREME COURT REPORTS [2005) SUPP. 2 S.C.R.

On exam ination of the provisions of the Taxation Act, we find that the
-
principle underlying therein is, that, it is the use of the motor vehicle on the
given occasion which determines the category of the motor vehicle, whether
it is adapted for that purpose or not.

B Under section 3, levy ,of tax is on all motor vehicles suitable for use on
the roads. Therefore, under the proviso, tractors and trailers used in the farms
are excluded as they are not used on the roads. The expression "suitable for
use on roads" finds place in sectior 3(1) as well as in entry 57 list II of the
seventh schedule to the Constitution. Therefore, tramways, railways and farm
machinery though mechanically propelled are excluded as they are not
c suitable for use on roads. Moreover, section 3 of the Taxation Act and its
explanation have to be construed on their own force . The combined effect of
sections 3, 4, 6, 7 and 8 of the Taxation Act is that the State is empowered
to levy tax on all motor vehicles which are designed and manufactured for
use on the roads.
D
In the case of State of Mysore v. Syed Ibrahim reported in AIR (1967)
SC 1424, the owner of a motor vehicle carried eight passengers in his car and
collected Rs.S from each of them. He was charge-sheeted under section 42(1)
of the M.Y. Act, 1939 (section 66 of the MY Act, 1988) for having used the
E car as a "transport vehicle" without the permit required under section 42(1).
The State contended before this Court that though the motor vehicle was
registered as a motor-car, if it was used for a purpose mentioned in section
42(1), namely, carrying passengers for hire, the motor vehicle on that
occasion must be said to have been used as a transport vehicle and ifso used
without a permit, there would be a breach of section 42(1). [Underlining
F
supplied by us]. Accepting this contention, this Court held that the levy of
tax under section 3 on motor vehicles depended upon the use of the vehicle
to which the vehicle was put; that the tax was leviable on the basis of the
actual or intended use; that it is the use of the motor vehicle on the given
occasion, which decided the category of the motor vehicle, whether it is
G adapted for that purpose or not. Therefore, even if a motor vehicle was
occasionally used as "goods carriage", it must be regarded when so used as
a " goods carriage" and, therefore, a "transport vehicle" and if it was so used
in breach of section 42(1 ), the owner or the person who uses it would be liable
to pUJ~ished under section 42(1) of the M.V. Act, 1939, which, as stated above,
H requires every owner of a motor vehicle to obtain a permit.
NATWAR PARTKH & CO. LTD. v. STATE [KAPADIA, J.] 1111

In the case of State of Karnataka v. K. Gopalakrishna Shenoy & Anr. A
reported in AIR (1987) SC 1911, this Court held that section 3(1) of the
Taxation Act confers a right upon the State to levy a tax on all motor vehicles
which are designed for use on the roads, at the rates prescribed, without
reference to the road worthy conditions of the vehicle or otherwise. In the
said judgment, it has been further held that the explanation ~o section 3(1) B
contains a deeming provision and its effect is that so long as the certificate
of registration of a motor vehicle is current, it must be deemed to be a vehicle
suitable for use on the roads, which expression finds place in entry 57 of list
II of the seventh schedule to the Constitution. It has been further held that
the consequence of the said explanation to section 3(1) is that the owner is
obliged to pay the tax in advance as long as the certificate of registration is C
current, irrespective of the condition of the vehicle for use on the roads and
irrespective of the fact whether the vehicle has a certificate of fitness under
the Motor Vehicles Act. In the said judgment, it has been laid down that
section 3(1) of the Taxation Act and its explanation have to be construed on
their own force and not with reference to section 38 of the M.V. Act, 1939 D
(section 56 of the MY Act, 1988) which dealt with certificate of fitness read
with section 22 of the M.V. Act, 1939 (section 39 of the MV Act, 1988) which
dealt with the certificate of registration. Therefore, one has to read sections
3 and 4 of the Taxation Act on their own force and not with reference to the
provisions of the M.V. Act dealing with registration of motor vehicles and
issuance of fitness certificate. E

On reading the aforestated judgment, it is clear that the catet;;orization
of motor vehicle for taxation under the 1957 Act will depend upon the use
of the motor vehicle on the given occasion, whether it is adapted for that
purpose or not. Therefore, in our view, the categorization of tractor-trailer by F
the taxation authority has been rightly made based on the use of the motor
vehicle on the given occasion and, therefore, there is no merit in the argument
advanced on behalf of the appellant that the taxation authority cannot go
behind the certificate of registration issued by the authorities in the State of
Maharashtra. In this connection, we may further point out that a tractor-trailer
consists of a tractor which contains a cab or a driver's seat and a compartment G
with a sleeping berth, the engine and the hood carried on two axles or four
axles, as the case may be. The trailer is a separate box car attached to the
tractor by what is called as the fifth wheel. This ineaning is given in the
,. technical dictionary. The point to be noted here is that the Motor Vehicles
Act, 1988 replaced the 1939 Act in order to rationalize certain definitions with H
I 112 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A the additions of new definitions of new types of vehicles. Under section 61
of the I 988 Act, which comes within Chapter IV dealing with registration of
motor vehicles, registration of trailers is made compulsory. Under section
6 I(2), the registration mark assigned to a trailer is required to be displaced
on the side of the drawing vehicle. In the present case, we are not concerned
B with tractors in the conventional sense. Even the legislature has used the word
"drawing vehicle" in place of tractors. Under section 61(3), it is provided that
no person shall drive a motor vehicle to which a trailer is attached unless the
registration mark of the motor vehicle is displayed on the trailer. Similarly,
under section 66 in Chapter V which refers to control of transport vehicles,
no owner of a motor vehicle can use the vehicle as a transport vehicle carrying
c passengers or goods without a permit. Under section 66(2), the holder of a
goods carriage penn it may use the vehicle for drawing any trailer. Therefore,
under the M.V. Act, 1988, the Parliament has kept in mind the existence of
a vehicle classifiable as "tractor-trailer".

D Lastly, it can be point~d out that the M.V. Act, 1988 is an Act to
consolidate and amend the law relating to tl:e motor vehi.:les. It deals with
various topics like registration of motor vehicles, licensing of drivers of motor
vehicles, control of transport vehicles etc. However, the taxation is not the
subject matter of the M.V. Act, 1988. Taxation is governed by the Taxation
Act, which falls under entry 57 list II of the seventh schedule to the
E Constitution. Taxation is governed by a separate Code which in the present
case happens to be the Karnataka Motor Vehicles Taxation Act, 1957 and as
held by this Court in the case of K. Gopa/akrishna Shenoy (supra), the
provisions of sections 3 and 4 of the Taxation Act have to be construed on
their own force and not with reference to the provisions of registration or
F fitness certificate under the M.V. Act, 1988.

The question still remains as to whether the taxation authority was right
in categorizing tractor-trailer as a separate assessable entity and whether that
authority was right in calling upon the appellant to obtain permit under section
G 66 of the M.V. Act, 1988.

In order to answer this issue,. we have to examine briefly section 2,
which is the definition section in the M.V. Act, 1988. In that connection, we
reproduce herein below the following :

H 2. Definitions.- !n this Act, unless the context otherwise requires,
NATWAR PARJKH & CO. LTD. v. STATE [KAPADIA, J.] II 13

(14) "goods carriage" means any motor vehicle constructed or A
adapted for use solely for the carriage of goods, or any motor
vehicle not so constructed or adapted when used for the
carriage of goods;

(28) "motor vehicle" or "vehicle" means any mechanically propelled B
vehicle 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 a special type adapted for use
only in a factory or in any other enclosed premises or a vehicle c
having less than four wheels fitted with engine capacity of not
exceeding twenty-five cubic centimetres;

(44) ''tractor" means a motor vehicle which is not itself constructed
to carry any load (other than equipment used for the purJ)ose D
of propulsion); but excludes a road-roller;

( 46) "trailer" means any vehicle, other than a semi-trailer and a side-
car, drawn or intended to be drawn by a motor vehicle;

(47) "transport vehicle" means a public service vehicle, a goods E
carriage, an educational institution bus or· a private service
vehicle."

Section 2(28) is a comprehensive definition of the words "motor
vehicle". Although, a "trailer" is separately defined under section 2(46) to F
mean any vehicle drawn or intended to be drawn by motor vehicle, it is still
included into the definition of the words "motor vehicle" under section 2(28).
Similarly, the word "tractor" is defined in section 2(44) to mean a motor
vehicle which is not itselfconstructed to carry any load. Therefore, the words
"motor vehicle" have been defined in the comprehensive sense by the
legislature. Therefore, we have to read the words "motor vehicle" in the G
broadest possible sense keeping in mind that the Act has been e~acted in order
to keep control over motor vehicles, transport vehicles etc. A combined
reading of the aforestated definitions under section 2, reproduced hereinabove,
shows that the definition of "motor vehicle" includes any mechanically
propelled vehiCle apt for use upon roads irrespective of the source of power H
1114 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.
.-
A and it includes a trailer. Therefore, even though a trailer is drawn by a motor
vehicle, it by itself being a motor vehicle, the tractor-trailer would constitute
a "goods carriage" under section 2(14) and consequently, a "transport
vehicle" under section 2(47). The test to be applied in such a case is whether
the vehicle is proposed to be used for transporting goods from one place to
B another. When a vehicle is so altered or prepared that it becomes apt for use
for transporting goods, it can be stated that it is adapted for the carriage of
goods. Applying the above test, we are of the view that the tractor-trailer in
the present case falls under section 2( 14) as a "goods carriage" and <·
consequently, it falls under the definition of "transport vehicle" under section ~
2(47) of the M.V. Act, 1988.
c
In the present matter, we were concerned with taxing of tractor-trailer ·
unit and not with the question as to whether such a vehicle would fall under •
item 3 or I 0 of part B of the schedule to the Taxation Act. Hence, we are
not required to go into that question.
D
Accordingly, we fmd no infinnity in the impugned judgment and
consequently, we dismiss this civil appeal with no order as to costs.

A.Q. Appeal dismissed.