)) IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 3011 of 1996 with SPECIAL CIVIL APPLICATION No 1308 of 2000 For Approval and Signature: Hon'ble CHIEF JUSTICE MR DM DHARMADHIKARI and Hon'ble MR.JUSTICE J.M.PANCHAL ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : YES of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- CRANE OWNERS ASSOCIATION Versus UNION OF INDIA DELETED -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 3011 of 1996 MR PRASHANT G DESAI for Petitioners Mr.S.N.Shelat, Addl. Advocate General with Mr.A.J.Desai, AGP for respondent nos.2,3,4 MS URVI A VORA for Respondent No. 5,13,14,15 MR PRANAV G DESAI for Respondent No. 7 2. Special Civil ApplicationNo 1308 of 2000 MR H.H.Mehta, Sr. Counsel with B.G.Jani, for Petitioners Mr.S.N.Shelat, Addl. Advocate General with Mr.A.J.Desai, AGP for respondent nos.2,3,4 MS URVI A VORA for Respondent No. 5,13,14,15 MR PRANAV G DESAI for Respondent No. 7 -------------------------------------------------------------- CORAM : CHIEF JUSTICE MR DM DHARMADHIKARI and MR.JUSTICE J.M.PANCHAL Date of decision: 14/08/2000 CAV JUDGEMENT (Per D.M.Dharmadhikari, CJ) This is a petition by the owners of cranes individually and through their Association. The petitioners call in question certain provisions of the Bombay Motor Vehicles Tax Act, 1958 as amended from to time to time and particularly the amendment introduced to it by the Gujarat Act No. 13 of 1995 published in Gujarat Government Gazette Extra Ordinary dated 31.7.1995 and the notification issued thereunder published in Gujarat Govrnment Gazette Extra Ordinary dated 31.7.1995 whereby tax at increased rates have been imposed on mobile cranes mounted on motor vehicles. 2. Bombay Motor Vehicles Act, 1958 (hereinafter referred to as "the Act of 1958") by its charging section 3 empowers the State Government to impose the tax on motor vehicles by notification in the Official Gazette but at a rate not exceeding the maximum rates specified in its Schedule appended to the Act. The Schedules appended to the Act were amended from time to time to specify the maximum rates of tax which could be levied on different types of motor vehicles including cranes. By impugned part of Gujarat Amendment Act No.13 of 1995, the Ist Schedule to the Act of 1958, particularly, clause VI was amended to insert the additional entry (f), sub-entries (i) & (ii) for prescribing the maximum rate of tax imposable on cranes. 3. The relevant entry (f) in clause VI in the Ist Schedule in Part I of Act of 1958 containing the maximum rates of tax imposable on cranes which is under challenge in thi s petition needs to be quoted as under:- Ist Schedule Clause VI entry (f) Motor Vehicles other than those liable to tax under the foregoing provisions of the Schedule - a. ... b. ... c. ... d. ... e. ... f. (i) Tractors which are not fitted Rs. 1500/- with any equipments such as +Rs. 200/- for rigs, cranes, compressors or entry additional projectors exceedings 2250 250 kgs. or part kgs. in weight. (ii) Any motor vehicle exceeding 2200 " kgs in weight, unladen which are not intended to carry any passenger, goods or other load, and which are fitted in any equipment such as rigs, cranes, compressors or projectors and are used for any special services or purposes. 4. In accordance with Section 3, its Ist Schedule as amended above prescribes maximum imposable rate of tax on motor vehicles such as cranes. The impugned notification published in Gujarat Government Gazette Extra-ordinary dated 31.7.1995 prescribes the rates of tax, within the maximum permissible limit, on various kinds of motor vehicles including cranes. The relevant part of the said impugned notification concerning cranes reads as under:- IV. Motor Vehicles other than those liable tax under the foregoing rovisions of this Schedule. - (i) Owned by an individual, a local authority, a public trust, a Uni- versity, or an education or social welfare institution - (a) Vehicles exceeding 220 kg. in weight unladen, in which the total number of Rs.540 seats (including that of the driver) and of the standing persons permitted to be carried in accordance with the Conditions of permit granted to the owner of the vehicle does not exceed twenty. (b) Vehicle exceeding 2250 kg. in weight, unladen, in which the total number of Rs.540 seats (including that of the driver) plus each and of the standing persons permitted such num- to be carried in accordance with the ber in ex- Conditions of permit granted to the cess of owner of the vehicle does not twenty. exceeds twenty. (c) (i) Tractor whether or not Rs.540/- plus fitted with any equipment Rs.100 for every such as rigs, cranes, additionl 250 kg compressors or projectors or part thereof, exceeding 2250 kgs. in in excess of weight, unladen and 2250 kg (ii) any motor vehicles exceeding 2250 kg. in weight, unladen which are not intended to carry any passenger, goods or other load, and which are fitted with equipment such as rigs, cranes, compressors or projector, and are used for any special services or purposes. (iii) Owned by a person other than Twice the an individual, a local autho- rates speci- rity, a public trust, a Uni- fied above. versity, or an educational or social welfare institution. Additional tax payable in respect of motor vehicles used for drawing trailors - (i) for each trailor when the The rates specified trailor is used for the in clause in respect carriage of goods. of motor vehicles used for the carriage of goods or materials. (ii) for each trailor when the The rates specified trailor is used for the in clause-II in carriage of passengers respect of motor vehicles playing for hire and used for the carriage of passengers. for each trailor when the trailor is used for any other purpose. Rs. 50: Provided that two or more vehicles shall not be chargeable under this clause in respect of same trailor. VI. Motor Vehicles falling under Twice the rates clause II or clause IV manu- specified in factured out of India and clause II or as imported into India after the the case may be 31st March, 1957. clause IV. Explanation - I. For the purpose of Clause IV, - (1) "educational institution" shall mean such educational institution as is recognised by the State Government by order notified in the Official Gazette in this behalf; (2) "local authority" shall mean any Municipal Corporation, Municipality Cantonment Board or Panchayat constituted under any law for the time, being in force in the State of Gujarat; (3) "Public trust" shall mean a public trust registered under the Bombay Public Trust Act, 1950 (XXIX of 1950) as in force in the State of Gujarat; (4) "Social Welfare Institution" shall mean any institution engaged in any activity conductive to the welfare of the general public and recognised by the State Government by order notified in the Official Gazette for the purpose of those clause; (5) "University" shall mean a university established by or under any law for the time being in force in the State of Gujarat. Explanation - II - If a motor vehicles is jointly owned by more person than one, then not with standing anything contained in the proviso to sub-section (1) of section 41 of the Motor Vehicles Act, 1988, such Motor Vehicles shall for purposes of clause IV, be deemed to be owned by a person other than an individual." 5. The leading arguments were advanced by Shri H.M.Mehta, Senior Counsel on behalf of the crane owners and they were supported by the arguments advanced by Shri Pranav G Desai. 6. The principal submissions made on behalf of the petitioner is that mobile cranes mounted on motor vehicles may be covered by the definition of the `Motor Vehicles' under the Act of 1958 read with definition clause 28 in Section 2 of the Motor Vehicles Act, 1988 but as the mounted mobile cranes are principally meant for use at certain sites and only incidentally used on roads for transport of cranes, they cannot be subjected to tax on such incidental user under Section 3 of the Act of 1958. Very heavy reliance is placed on the decision of the Supreme Court in the case of Bolani Ores Vs. State of Orissa reported in 1975 SC 17 and in the case of Goodyear India Ltd. Vs. Union of India & Otrs reported in AIR 1997 SC 2038. 7. On the question of taxability of mobile mounted cranes, Shri S.N.Shelat, Additional Advocate General in his reply brought to the notice of this Court a series of decisions of the Supreme Court emanating from several motor vehicle taxation laws of different states. His submission is that cranes which may be incidently used on roads can be subjected to tax and the question of its taxability is conclusively answered by the Supreme Court against the crane owners. Reliance is placed on the decisions of the Supreme Court on Punjab Motor Vehicle Taxation Act in the case of Union of India and Ors Vs. Chowgule & Co. Pvt.Ltd. reported in AIR 1992 SC 1376 and in the case of Regional Transport Officer-Cum-Taxing Authority, Rourkela and Ors. Vs. Steel Authority of India Ltd. reported in 1995 Supp(4) SCC 165. Reliance is also placed on the decision of the High Court in the case of M/s.Ishwardas & Co. & Ors. Vs. State of Maharashtra & Anr. reported in AIR 1986 Bombay 348 and in the case of Poomani V. Tuticorin Thermal Power Project reported in AIR 1990 Madras 372. Learned Additional Advocate General tried to distinguish the decisions of the Supreme Court in the case of Bolani Ores (Supra) and Goodyear India Ltd. (Supra). 8. To consider the challenge made by the crane owners to the taxability of mobile mounted cranes, a few [provisions of the Act of 1958 as amended and the rules framed thereunder, in the light of the decisions of the Supreme Court and High Courts cited at the Bar are required to be considered. 9. Bombay Motor Vehicles Tax Act of 1985 as adapted and modified by the Gujarat Adaption of Laws Act, 1970 and as amended from time to time, as its preamble declares is `a law relating to the taxation of motor vehicles.' The words "motor vehicle" has not been separately defined in the Act of 1958 but Sub-Section 10 of Section 2 of the said Act provides that "other words and expressions used, but not defined in this Act shall have a meaning respectively assigned to them in the Motor Vehicles Act of 1937, By Gujarat Act No.10 of 1991. Sub-section 10 of the Act of 1958 is amended to substitute for words and figures "the Motor Vehicles Act of 1939," "Motor Vehicles Act of 1988." Under section 2(28) of Motor Vehicles Act of 1988 the motor vehicle is defined as under:- Section 2(28) "motor vehicle" or "vehicle" means any mechanically propelled 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 having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimetres". The charging Section 3(1) & (2) of the Act of 1958 reads thus:- "3.(1) Subject to the other provisions of this Act, on and from the 1st day of April, 1958, there shall be levied and collected on all motor vehicles used or kept for use in the State, a tax at the rates fixed by the State Government by notification in the Official Gazette, [but not exceeding the maximum rates specified in the First, Second and Third Schedules]: [Provided that in case of any motor vehicles (irrespective of whether they are specified [in section 3 A or the First Schedule] or the Second Schedule) kept by a dealer in, or manufacturer of such vehicles, for the purpose of trade, there shall be levied and collected annually such amount of tax not exceeding Rs.250/- as the State Government may, by notification in the Official Gazette specify on those motor vehicles only which are permitted to be used on the roads in the manner prescribed by rules made under [the Motor Vehicles Act, 1988]: Provided further that, if the State Government, because of disparity in the rates of tax prevailing in certain area of the State immediately before the commencement of this act or for any other reason, is of opinion, that the levy and collection of tax on motor vehicles immediatley at a uniform rate throughout the State, is likely to cause undue hardship to owners or persons having possession or control of such vehicles in those area, or to affect adversely trade and commerce or the development of motor transport and other industries in such area, the State Government may levy and collect the tax on motor vehicles, or any class thereof at different rates in those areas, so however that by increase or decrease of the rate, of tax annually in those area, within a period of three years, a unifrom rate of tax is levied throughout the State. 3.(2) Except during any period for which the Taxation Authority has, in the prescribed manner, certified that a motor vehicle was not used or kept for use in the State, the registered owner, or any person having possession or control, of a motor vehicle of which the certificate of registration is current, shall, for the purpose of this Act, be deemed to use or keep such vehicle for use in the State." What is to be noted that by charging Section 3(1) the taxes are leviable and recoverable on all motor vehicles actually put to use or kept for use within the State. 10. Section 3(2) makes it clear that a motor vehicle neither used nor kept for use in the State is not liable to pay tax if for the period in question it has obtained a certificate from the Taxation Authority that it was not so used and not kept for use in the State. 11. Learned Counsel appearing on behalf of the petitioners does not dispute the legal position that mobile cranes mounted on motor vehicles are included in the definition of `motor vehicle' under Section 2(28) of the Motor Vehicles Act, 1988. The said definition has been borrowed for the purpose of the Act of 1958. 12. The contention advanced on behalf of the petitioners is that the cranes even mounted on motor vehicles to make it mobile are principally and mostly used at different work sites or construction sites and they are sometimes incidentally used on public roads only to carry the cranes from one site to another. It is therefore contended that the cranes are not used or kept for use in the State within the meaning of that expression under Section 3(1) of the Act of 1958 and therefore no tax can be levied on the same. 13. The other submission made on behalf of the petitioner is that most of the cranes which are used exclusively in enclosed premises of a factory or a work site and not at all used on public roads are also subjected to tax and to that extent the provisions of Section 3(1) fall outside entry no.57 of List II of the VIIth Schedule to the Constitution. The State Legislature therefore in specifying in the Schedule to the Act of 1958, maximum rates of tax on all cranes irrespective of its use on public roads has acted beyond its legislative competence under entry no.57 of List II of VIIth Schedule. Entry No.57 of List II of VIIth Schedule reads as under:- "Taxes on Vehicles, whether mechanically propelled or not, suitable for use on roads including trams, cars subject to the provisions of entry no.35 of List III." Entry No.35 of List III of the concurrent list empowers the State or the Central Legislature to make law for laying down general principles on which tax can be imposed on mechanically propelled vehicles. Entry no.35 of list III reads as under:- "Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied." 14. On behalf of the petitioners, very heavy reliance has been placed on the decision of the Supreme Court in the case of Bolani Ores (Supra) and Goodyear India Ltd. (Supra). So far as the taxability of mobile mounted cranes included in the definition of motor vehicles, is concerned this Court finds that the point is concluded against the petitioners by the decision of the Supreme court in the case of Travancore Co. Ltd. Vs. State of Kerala & Ors. reported in AIR, 1980 SC 1547 and many later decisions of the Supreme Court to which we shall make a reference in the following paragraphs of this judgement. 15. In the case of Travancore Co. (Supra), the earlier decision of the Supreme Court in Bolani Ores (Supra) was considered in detail. The Bolani Ores case was distinguished on definition clause of Motor Vehicles contained in Section 2(18) of the Motor Vehicles Act, 1938, as it existed then, prior to its amendment in the year 1956. In the case of Bolani Ores (Supra), the question raised was regarding taxability of motor vehicles, i.e. dumpers, tractors, caterpillar trax cavetror and caterpillar Bull-dozers, scrapers and shovels etc. which are all used in the premises of a mine. In the definition of `motor vehicle' contained in Section 2(18) as it stood at the relevant time, prior to its amendment by the Act of 1956, vehicles used solely upon the premises of the owner were excluded from the definition of motor vehicle. It is only after the amendment of definition clause in Section 2(18) by the Act No. 100 of 1956 that only vehicles of a special type adapted for use only in a factory or in any other enclosed premises were excluded from the definition of motor vehicle. The Bihar, Orissa and Mysore Motor Vehicles Taxation Acts in their provisions have incorporated the definition of motor vehicles contained in the Motor Vehicles Act of 1938. The legal question of interpretation that arose before the Supreme Court in the case of Bolani Ores (Supra) was whether definition of `motor vehicle' contained in amended definition of Section 2(18) would be applicable to demand tax on vehicles involved under the Motor Vehicle Taxation Acts of 3 different states. The second question arose was whether it is an instance of legislation by reference or incorporation. In Bolani Ores Case after discussing the provisions and interpreting them, conclusion was arrived at that the taxing provisions had to be interpreted in the light of entry no.57 in List II of VIIth Schedule of the constitution. Motor Vehicle Tax is imposable on motor vehicles to be used on roads or intended to be used on roads. It was held that the State Legislature would be deemed to have incorporated in their taxing provision the deinition of `motor vehicle' as contained in Section 2(18) of the Motor Vehicles Act as it stood prior to the amendmen introduced to the definition clause by the Act of 100/92. Thus construing the provisions of the Acts of the State Legislature, it was held that vehicles used in the the mining premises fall outside the definition of `motor vehicle' and could not be subjected to tax. 16. This distinction was duly noted by the Supreme Court in the case of Travancore Tea Co. Ltd (Supra) where also the question that arose was regarding taxability of motor vehicles used within the Tea Estate of the owner. In Travancore Tea Co. Ltd. case (Supra), the Supreme Court declined to rely on the decision of Bolani Ores (Supra) by bringing out the distinction discussed above . It was held that as the Kerala Motor Vehicle Taxation Act, 1963 refers and incorporates in its provisions the amended definition of `motor vehicle' contained in Section 2(18) of the Motor Vehicles Act, 1939 as introduced by Act No.100 of 1956, vehicles which though used in enclosed premises of the Tea Estate are exigible to tax because they are covered by the definition clause in Section 2(18) of the Act, 1939 as amended in the year 1956. Those were vehicles not being of a special type adapted for use only in a factory or any other enclosed premises. They were held to be not exempt from tax as such vehicles are not excluded from the definition of `Motor Vehicle'. In Travancore Tea Co. Case (Supra), the vehicles owned by the owner were tractors, trailors, lorries etc. which were used in the Tea Estate but were held to be `motor vehicles' not of a `special type adapted for use exclusively in a factory or enclosed premises.' 17. For the aforesaid reasons, the decision of the Supreme Court in Bolani Ores (Supra) which was based on the unamended definition of Section 2(18) of the Motor Vehicles Act, 1939 (as existing then), is no assistance to the petitioners in the cases in hand based on the provisions of the Bombay Act as applicable to the State of Gujarat. 18. As has been stated above, Section 2(10) as amended by the Gujarat Act No. 10 of 1991 adopts the definition of motor Vehicle contained in the New Motor Vehicle Act, 1988. Under the New Motor Vehicles Act of 1988 by Section 2(28) `vehicles' adapted for use on roads and not of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than 4 wheels fitted with engine capacity of not exceeding 25 cubic cms are all included in the definition of `motor vehicles'. 19. It cannot be disputed from the common knowledge and explained from various technical dictionaries and diagrams placed before us that "mobile crane mounted on motor vehicle is so manufactured and designed as to become a vehicle "adapted for use on roads". It is also not disputed that mounted cranes are principally used at work sites or in enclosed premises for lifting or moving goods of heavy weights and loading & unloading. Mounted crane on a motor vehicle is capable of being used on the roads as it is required to be sometimes taken from one work site to another. It is a motor vehicle adapted for use upon roads - may be that it is not frequently or regularly used on roads. This Court also cannot accept the proposition that mounted crane is a vehicle of special type adapted for use only in factories or in any other enclosed premises. A mobile mounted crane is capable of being used on roads for its transportation. It is, therefore, not a vehicle of a special type for exclusive use inside the factory or enclosed premises. Its exigibility to tax therefore as a `motor vehicle' cannot be questioned and the point is squarely answered against the crane owners in the case of Travancore Tea Co. Ltd. (Supra). 20. Very strong reliance has been placed on the decision of Goodyear India Ltd. (Supra) on behalf of the petitioner by stating that the same being the latest pronouncement of the Supreme Court is binding on this court in preference to all other earlier decisions of the Supreme Court with which we shall briefly deal in the following paragraphs. 21. Goodyear India Ltd case (Supra) was not a case arising from any motor vehicle taxation law. It was the case on the question of payment of excise