Supreme Court has decided to look into an issue whether excavators and surface miners used in a factory, mine or in any other enclosed premises are motor vehicles and, thus, exigible to pay road tax.
The issue has been raised by Ultratech Cement in an appeal, which seeks explanation from the Gujarat government and state tax and transport departments.
Utratech Cement (earlier L&T) has challenged last year?s Gujarat High Court judgment that held the firms excavators and surface miners, which are metal-wheel equipment of special type and excessively heavy (each excavator weighing in excess of 60,000 kg and each surface miner weighing in excess of 37,400 kg) used only in factory, mine or other enclosed premises, are motor vehicles under the Motor Vehicles Act, 1988, and thus, are exigible to road tax under the Bombay Motor Vehicles Tax Act, 1958.?
The Clinker and Cement products manufacturer uses these equipment at its Narmada Cement ? Jafarabad Works in the state, which has a manufacturing capacity of 1.45 million tonnes per annum.
While the Assistant Regional Transport Officer, had in 2007, demanded R51,09,344 from the firm towards tax and registration charges, interest and penalty on the excavators and surface miners. The commissioner of transport in 2011 held the equipment owned by Ultratech are motor vehicles, and are, therefore, taxable under the MV Act and the tax Act, respectively.
Stating such orders as ?unjust, arbitrary, inequitable?, the firm said the equipment are adapted for use only in a factory or in any other enclosed premises and are not capable of plying on the road. Even the dimension of the equipment exceeds prescribed limit of width, height and length, as mentioned in the rules.
Instead of rubber tyres, as is the case in motor vehicle, the equipment has metal wheels, Ultratech said, adding the equipment has been actually received at the mines site in a dismantled conditions in a trailer. ?None of the equipment has ever been taken outside the enclosed premises of the site. The very nature of these equipment makes it clear that they are manufactured or adapted only for the use in factories or enclosed premises. The mere fact that the equipment are heavy and cannot move on roads without damaging them is to say they are not suitable for use on the public roads. Therefore, the equipment is not required to be registered under the MV Act and the firm cannot be called upon to get such equipment registered under the MV Act, nor would these equipment be eligible under the Tax Act, the appeal emphasised.?
?Since the taxing statute is a regulatory or compensatory, the provisions of Section 3 of the Tax Act relate only to the actual use of equipment on the public road. It is not the purpose of the Tax Act to levy taxes on equipment which do not use the roads or in any way form part of flow of traffic on the roads which is required to be regulated. Therefore, if the equipment cannot be used on the public roads, than no tax could be levied under the Tax Act,? it added.
To tax or not to tax
* The issue has been raised by Ultratech Cement in an appeal, which seeks explanation from the Gujarat government and state tax and transport departments
* The assistant regional transport officer in 2007 had demanded R51,09,344 on tax and registration charges, interest and penalty on excavators and surface miners
* The transport commissioner in 2011 held the equipment owned by Ultratech are motor vehicles and are taxable under the MV Act and the tax Act, respectively
* The firm has called such orders ?unjust, arbitrary, inequitable?, adding the equipment is for use only in an enclosed premises and not capable of plying on the roads
