TATA IRON & STEEL COMPANY LTD. versus DISTRICT TRANSPORT OFFICER & ORS.
[2015] 10 S.C.R. 325, Supreme Court of India, 2015
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
[2015] 10 S.C.R. 325 
TATA IRON & STEEL COMPANY LTD. 
v. 
DISTRICT TRANSPORT OFFICER & ORS. 
(Civil Appeal No.3162of2006) 
SEPTEMBER 08, 2015 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
Bihar and Orissa Motor Vehicles Taxation Act, 1930: 
A 
B 
s. 6(1 A) - Public Service Motor Vehicle - Imposition of 
additional tax - Motor vehicles used by appellant for which C 
respondent demanded additional moto.r vehicles tax -
Vehicles are bus, truck, tipper, water tanker, diesel tanker, 
explosive van, trailer, canteen van and school bus - School 
bus is used for carrying the children wards of the employees 0 
of the appellant from and to educational institutions purely 
as welfare measure - Tipping trucks are used for handling of 
coal within the mining area for production purposes -
Explosive vans are used for transfer of explosives - Likewise 
other vehicles are also used captively for business purpose E 
-
Thus these vehicles are used by appellant for its own 
purpose and would not be treated as vehicle for public or 
third party- Therefore, in such situation, appellant is not liable 
to pay additional tax in terms of s.6(1A) of the Act. 
Allowing the appeal, the Court 
F 
HELD: 1. The High Court has held that the 
expression 'adapted' in Section 2(j) has to be given its 
full meaning and when the vehicle was capable of being 
used for carrying of passengers and goods, it would be G 
treated as "Public Service Motor Vehicle." This approach 
is clearly faulty. There was r'lo dispute about
the first 
requirement. The appellant had rested its case on the 
325 
H
326 
. SUPREME COURT REPORTS 
[2015) 1 O S.C.R. 
A submission that the second requirement namely 'hire' 
or 'reward' had not been fulfilled. The expression 'hire' 
or 'reward' would mean that the vehicle must be run for 
the benefit of another. Obviously, the appellant is the 
owner, if the vehicle is given on 'hire' to a third person 
B and charges are received therefrom, it would amount to 
using the vehicle for 'hire'. Likewise, when the owner of 
the vehicle uses the vehicle himself but for the benefit of 
another person i.e. third person and receives some 
C charges for the said use, that may fulfill the requirement 
of 'reward'. Insofar as the present c~se is concerned, 
the vehicles ar~ not used for the third party at all. Most 
of the vehicles are used for business purposes. Some 
vehicles are used for carrying the children of the 
0 
employees from their residence to schools and back. 
That would not be treated as using the vehicle for public 
or third party. [Paras 5, 7, 8 and 9) [330-F-G; 331-C-D, E] 
E 
F 
G 
H 
Mis. Tata Engineering Locomotive Co. Ltd. v. The 
Sales Tax Officer Poona and Anr. 1979 (2) SCR 
357: (1979) 1 SCC 208; Hindustan Aeronautics 
Ltd. v. Registering Authority and Ors. 1999 (2) 
Suppl. SCR 296: (1999) 8 SCC 169 - relied on. 
Mis. Central Coalfields Ltd. v. State of Orissa AIR 
1992 SC 1371 : 1992 (2) SCR 982; State of 
Mysore v. Syed Ibrahim (1967) 2 SCR 361 -
distinguished. 
Case Law Reference 
1979 (2) SCR 357 
relied on. 
Para 9 
1999 (2)
Suppl. SC_R 296 relied on. 
Para 9 
(1967) 2 SCR 361 
distinguished. Para 10 
1992 (2) SCR 982 
distinguished. Para 10
TATA IRON & STEEL COMPANY LTD. v. DISTRICT 
327 
TRANSPORT OFFICER 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
A 
3162 of2006. 
From the Judgment and Order dated 20.08.2004 of the 
High Court of Jharkhand at Ranchi in CWJC No. 3338of1992. 
D.A. Dave, Gopal Jain, R.N. Karanjawala, Nandini Gore, 
8 
Kartik Bhatnagar, Tahira Karanjawal, Neha Khandelwal, Manik 
Karanjawala for the Appellant. 
Ajit Kumar Sinha, Gopal Prasad, Jayesh Gaurav for the 
Respondent. 
C 
The Judgment of the Court was delivered by 
A. K. SIKRI, J. 1. In the instant appeal we are concerned 
with the issue as to whether the appellant is liable to pay 
additional motor vehicles tax in terms of sub-section(1A) of D 
Section 6 of the Bihar and Orissa Motor Vehicles Taxation Act, 
1930 (hereinafter referred to as 'the Act'). Section 6 of the Act 
relates to imposition of tax on the motor vehicles. Under sub-
section( 1) motor vehicles tax is leviable on every motor vehicle. 
E 
The rates of such tax are specified in the Second Schedule of 
the Act. However, under sub-section (1-A), certain kinds of 
motor vehicles are also liable to pay additional motor vehicles 
tax at the rate specified in the Third Schedule of the Act. Such 
vehicles have to fulfill the description of "Public Service Motor F 
Vehicle". Section 2 contains certain definitions for the 
aforesaid purposes. Relevant provisions are Section 2(a) and 
U), which read as under: 
"2(a). 
"invalid carriage", "motor cab", "motor cycle", 
"motor
vehicle", "public place", "public service vehicle", 
G 
"trailer'', "transport vehicle", "unladen weight" ,["certificate 
of registration", "registering authority", "registered laded 
weight", and "tractor"] shall have the meanings 
respectively assigned to them in the Mot.or Vehicles Act, 
H 
1939 (IV of 1939);
• 
328 
SUPREME COURT REPORTS 
[2015] 10 S.C.R. 
A 
xxxx 
B 
xxxx 
20) "Public Service Motor Vehicle" means any motor 
vehicle used ot adapted to be used for the carriage of 
passengers and goods for hire or reward and includes a 
motor cab, a stage carriage, or a public carrier;" 
2. As per Section 2(a) above mentioned, kinds of vehicles 
and carriages etc., which include public service vehicles, are 
C assigned the same meaning as is given in the Motor Vehicles 
Act, 1939. In any case, insofar as "Public Service Motor 
Vehicle" is concerned, it is specifically defined under Section 
20) of the Act. Reading of the aforesaid definition would show 
0 
that a motor vehicle falling under the definition of "Public Service 
Motor Vehicle" has to satisfy the following conditions: 
1) 
It is used or adapted to be used for the carriage 
of passengers and goods; 
E 
2. 
Such use has to be for 'hire' or 'reward'. 
3. If the aforesaid conditions ar~ satisfied, then the moto1 
vehicle of 'any' description as mentioned in Section 2(a) would 
become "Public Service Motor Vehicle". The question is as to 
F whether the motor vehicles used by the appellant herein, for 
which the respondent is demanding additional motor vehicle 
tax, fulfill the aforesaid conditions. The vehicles with which we 
are concerned are altogether 57 vehicles which include bus, 
truck, tipper, water tanker.diesel tanker, explosive van, trailer, 
G canteen van and school bus etc. School bus is used for 
carrying the
children wards of the employees of the appellant 
from and to educational institutions purely as welfare measure. 
Tipping trucks/trucks are used for handling of coal within the 
mining area for production purposes. As far as explosive vans 
H are concerned, these are used for transfer of explosives from
TATA IRON & ~ IEEL COMPANY LTD. v. DISTRICT 
329 
TRANSPORT OFFICER [A. K. SIKRI, J.] 
the appellant "Magazine to mines". Water tanker is used for A 
sprinkling of water for dust suppression for mining operations 
and diesel tanker is used for filling up diesel to machinery within 
the mining area. As far as canteen vans are concerned, they 
are used for welfare measures only. What follows from the 
aforesaid use of various vehicles is that these are used by the B 
appellant for its own purposes viz. t_hese are capitively used. 
The appellant does not deny that these motor vehicles in 
question are adapted to be used for carriage of passengers 
and goods. However, it is contended that since the vehicles 
are used capitively by the appellant for its own purposes, these C 
are not used for 'hire' or 'reward' and, therefore, the second 
requirement, as mentioned in the definition of "Public Service 
Motor Vehicle," has not been fulfilled and, therefore, no such 
additional motor vehicles tax is required to be paid. 
4. This very contention was taken before the Adjudicating 
Authority as well. However, the said Authority, namely the 
District Transport Officer, Hazaribagh, rejected the argument 
D 
on the ground that the vehicles are used for 'reward'. For this 
purpose, the Adjudicating Authority referred to the Oxford E 
dictionary meaning for the word 'reward' which means 
"recompense for service or merit, given or obtained in return 
for work of service". In the opinion of
the Adjudicating Authority, 
it would mean that 'reward' is something which is not F 
necessarily only given by somebody but it would also 
recompense the situation where one gives to itself something 
in return for the work or service. On that basis, the Adjudicating 
Authority stated that the requirement of 'hire' or 'reward' was 
also fulfilled and, therefore, additional motor vehicles tax was G 
liable to be paid. This order was challenged by filing writ petition 
in the High Court of Jharkhand at Ranchi. To the aforesaid 
reasons given by the Adjudicating Authority, which was the 
foundation of the order of the Adjudicating Authority, the plea 
of the appellant was that the expression 'hire' or 'reward' clearly H
330 
SUPREME COURT REPORTS 
[2015] 1 O S.C.R. 
A 
postulated that the vehicle must be run for the benefit of another, 
either for higher charge, or for some reward received from the 
user and this was not a case where the vehicle was being 
used in such a manner. It was, thus, argued that no reward 
was received for use of the vehicles for its own use or for 
B carrying its employees to work or the children of the employees 
to educational institutions and ba~k and, therefore, the 
ingredients of the definition of "Public Service Motor Vehicle" 
were not satisfied. The said writ petition of the appellant has 
also been dismissed by the impugned judgment dated 2Qlh 
C August, 2004, out of which the present appeal arises. 
5. After perusing the impugned judgment it would be seen 
that the aforesaid contention of the appellant challenging the 
order of the Adjudicating Authority has not been dealt with or 
D answered at all though it is specifically taken note of in para 4 
of the said judgment. On the other hand, the entire basis of the 
impugned judgment rests on the discussion on the explanation 
for "adapted" which occurs in the definition and which is the 
first requirement of the definition as mentioned above. 
E 
Referring to some judgments of Kerala High Court as well as 
of this Court in M/s. Central Coalfields Ltd. vs. State of 
Orissa [AIR 1992 SC 1371 = (1992} Supp.3SCC1331, the 
High Court ha~ held that the expression 'adapted' has to be 
F 
given its full meaning
and when the vehicle was capable of 
being used for carrying of passengers and goods, it would be 
treated as "Public Service Motor Vehicle." This approach is 
clearly faulty. There was no dispute about the first requirement. 
As mentioned above, the appellant had rested its case on the 
G submission that the second requirement namely 'hire' or 
'reward' had not been fulfilled. That argument has not been 
answered and instead the High Court went astray in basing its 
judgment on altogether different aspects which were not even 
in dispute. 
H 
6. In the aforesaid backdrop, when the High Court has
TATA IRON &STEELCOMPANYLTD. v. DISTRICT 
331 
TRANSPORT OFFICER [A. K. SIKRI, J.] 
failed to answer the contention of the appellant on the basis of A 
which the order of the Adjudicating Authority was challenged, 
we have to decide as to whether the Adjudicatinq Authority 
was correct in holding that the use of vehicles in the manner 
mentioned above amounts to using for 'reward'. We do not 
think it to be so. 
B 
7. Mr. D.A. Dave, learned senior counsel appearing for 
the appellant, was right in his submission that the expression 
'hire' or 'reward' would mean that the vehicle must be run for 
the benefit of another. Obviously, the appellant is the owner, if c 
the vehicle is given on 'hire' to a third person and charges are 
received therefrom, it would amount to using the vehicle for 
'hire'. 
8. Likewise, when the owner of the vehicle uses the vehicle 
himself but for the benefit of another person i.e. third person D 
and receives some charges forthe said use, that may fulfill the 
requirement of 'reward'. Insofar as the present case is 
concerned, the vehicles are not used for the third party at all. 
9. Most of the vehicles are used for business purposes. 
E 
Some vehicles are used for carrying the children of the 
employees from their residence to schools and back. That 
would not be treated as using the vehicle for public or third 
party as held by this Court in Mis. Tata Engineering 
Locomotive Co. Ltd. \I. The Sa/es Tax Officer Poona and F 
Anr. [(1979) 1 sec 2081.
We may also usefully refer the 
judgment of this court in Hindustan Aeronautics Ltd. Vs. 
Registering Authority and Ors.((1999)8 SCC 169L where 
the expressions 'hire' or 'reward' are explained in the following 
G 
manner: 
"9. Although the circular is captioned Revision of charges 
to be levied for private use of Company's Vehicles, it is 
made clear that the policy of the company is to 
discourage private use of company's transport or H 
vehicles but wherever it is considered necessary to permit
332 
A 
B 
c 
D 
E 
SUPREME COURT REPORTS 
[2015j10S.C.R. 
such use in unavoidable cases, the officer concerned 
will intimate the employees of the revised rates before 
forwarding the requests to the General Manager for 
approval. Thus the rates specified are not by way of an 
offer to the general public but to regulate the use of the 
vehicles in a particular manner. Thus the buses are not 
plied for hire or reward. And, in addition to that, the 
vehicles are used mainly for their employees and their 
children as part of the welfare measure of the employees. 
If the members of the family of the employees, like the 
spouses or children, are allowed to travel in those buses, 
it.should not be treated as the vehicle being plied for hire 
or reward. In such circumstances, we do not think that 
the authorities were justified in treating the vehicles as 
being plied for hire or reward. They have lost sight of the 
fact that the requirement to attract the charge under Entry 
4 of the Schedule to the Act was plying of motor vehicles 
for hire and not mere user. Therefore, we do not think 
that either the High Court or authorities under the Act were 
justified in either imposing the higher rate of tax under 
Entry4 of the Schedule to the Act or upholding the same 
when challenged." 
10. Mr. Sinha, learned senior counsel who appeared for 
the respondent, submitted that the case is covered by two 
F judgments of this Court, which are: (1) State of Mysore vs. 
Syed Ibrahim [(1967) 2
SCR 361 and (2) Mis. Central Coal 
Fields Ltd. Vs. State ofOrissa ((1992) Supp.3SCC133. In 
State of Mvsore(supra) where the question arose as to 
G whether vehicle in question used would be covered by the 
definition of "Public Service Motor Vehicle" and public service 
vehicle contained in· Section 42(1) read with Section 2(18) of 
the Act. The question was answered in the affirmative. 
However, the issue which was to be determined was as to 
H whether carrying of passengers would make the vehicle as

TATA IRON &STEELCOMPANYLTD. v. DISTRICT 
333 
TRANSPORT OFFICER [A. K. SIKRI, J.] 
"Public Service Motor Vehicle". There was no dispute that the A 
said vehicle was used for 'hire' or 'reward' and, therefore, this 
aspect, with which we are directly concerned in the present 
case, was not in issue at all. The judgment therefore, shall be 
no help to the respondent. Same is the position in Mis. Central 8 
Coal Fields Ltd.(supra) as well wherein again the question 
that fell for consideration was as to whether"~ particular vehicle 
was adapted for use upon roads to attract tax liability. Here 
again the issue pertaining to the meaning that is to be assigned 
to 'hire' or 'reward' had not arisen for consideration. 
. 
11. In view of our aforesaid discussion, we are of the 
opinion that the judgment of the High Court is unsustainable. 
The same is, accordingly, set aside and the present appeal is 
allowed. 
12. No order as to costs. 
Devika Guiral 
Appeal allowed. 
c 
D