In a significant ruling with wide impact on the mining and cement industry, the Supreme Court of India has held that heavy earth moving machinery such as dumpers, loaders and excavators used strictly inside factory or mining premises are not “motor vehicles” for the purpose of road tax. The verdict brings relief to UltraTech Cement Ltd., which had been locked in a long-running dispute with the State of Gujarat over registration and tax demands.
The judgment was delivered on January 8, 2026, by a Bench led by Justice Pankaj Mithal, setting aside earlier orders of the Gujarat High Court.
Background of the Case
UltraTech Cement operates large cement plants in Gujarat, where it uses dumpers, loaders, excavators, surface miners, dozers and rock breakers for internal industrial work. These machines never ply on public roads. They are transported in dismantled condition on trailers and remain confined to enclosed factory or mining premises.
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Despite this, transport authorities in Gujarat issued notices insisting that such machinery must be registered as motor vehicles and subjected to road tax under the Gujarat Motor Vehicles Tax Act. Over time, UltraTech was asked to pay substantial sums, including penalties and interest, prompting the company to deposit part of the amount under protest and approach the Gujarat High Court.
The High Court upheld the State’s stand, leading UltraTech and other appellants to move the Supreme Court.
Core Legal Question
The central issue before the Court was narrow but crucial:
Are heavy earth moving machines and construction equipment vehicles, used only within factory or enclosed premises, “motor vehicles” under the Motor Vehicles Act, 1988, and therefore liable to road tax?
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Court’s Observations
The Bench closely examined the Constitution, the Motor Vehicles Act and the Gujarat tax law. It noted that under the Constitution, states can levy tax only on vehicles “suitable for use on roads.”
Reading Section 2(28) of the Motor Vehicles Act, the Court pointed out that while the definition of “motor vehicle” is wide, it specifically excludes vehicles of a special type adapted for use only in a factory or enclosed premises.
“The legislature has consciously carved out an exception,” the Bench observed, noting that machines designed exclusively for off-road industrial use fall outside the tax net meant for road-using vehicles.
The Court also relied on unchallenged certificates from manufacturers and technical bodies stating that the machines in question were meant only for off-road operations and had no road-worthiness certification.
Referring to earlier precedents, including Bolani Ores Ltd. v. State of Orissa, the Bench reiterated that road tax is compensatory in nature.
“If a vehicle does not use public roads or derive benefit from public infrastructure, it cannot be burdened with road tax,” the Court said in substance.
Decision
Allowing the appeals, the Supreme Court set aside the Gujarat High Court’s judgments and quashed the tax demands.
The Bench held that:
- Heavy construction and mining equipment used only within enclosed or factory premises are excluded from the definition of “motor vehicle”.
- Such equipment is not liable for registration or road tax under the Gujarat law.
- However, if these vehicles are found plying on public roads, authorities would be free to initiate action under the law.
With this, all connected appeals were allowed, and no costs were imposed.
Case Title: UltraTech Cement Ltd. v. State of Gujarat & Others
