Road Tax Exemption for Industrial Vehicles That Never Hit Public Roads

New Delhi: Coal India, SAIL, Tata Steel, L&T, ACC, Ultratech, and other major industrial companies have received relief following a Supreme Court ruling: heavy vehicles that operate exclusively within mines, factories, and construction sites will no longer be required to pay road tax.

Supreme Court Clarifies

A bench led by Justice Pankaj Mithal ruled on Thursday that industrial and construction machinery—such as dumpers, excavators, and surface miners—used exclusively within factories, mines, or closed areas are not considered motor vehicles under the Motor Vehicles Act. Consequently, these vehicles are exempt from road tax.

This decision overturned a 2011 Gujarat High Court ruling and came in response to an appeal by Ultratech Cement. The Court emphasized that these vehicles are specially designed for industrial purposes and are meant to operate only within private industrial zones, not on public roads.

Public Road Use Still Taxable

The Supreme Court also clarified that if such industrial vehicles are found operating on public roads, they will be subject to road tax and applicable penalties. Under the provisions of the Seventh Schedule of the Constitution, states can levy tax only on vehicles that travel on public roads.

This landmark ruling provides significant financial relief to companies operating fleets of heavy industrial and construction vehicles while maintaining legal clarity on taxation for vehicles that enter public roadways.