Excavators not running on inflated tyres but on tracks (iron chain plates) such as caterpillar vehicles or military tanks are not to be categorised as motor vehicles under the definition outlined in Section 2(28) of the Motor Vehicles Act, 1988, and hence they are not liable to pay entry tax, the Madras High Court has ruled.

The First Bench comprising Chief Justice, Mr A.P. Shah, and Mr Justice K. Chandru, while disposing of a writ appeal by a Chennai-based firm, set aside the impugned show cause notice dated April 20, 2006 issued by Commercial Tax Officer, Chennai alleging that the appellant had imported two Volvo hydraulic excavators and had not paid entry tax.

For its contract work, RDS Projects Ltd had entered into a deal with Chennai-Ennore Port Road Co Ltd for execution of sea protection works.

The appellant contended that the two machines had tracks and would therefore, not come under the definition of motor vehicles in Section 2(1) of TN Tax on Entry of Motor Vehicles Act 1990 read with Section 2(28) of Motor Vehicles Act.

Hence, the show cause notice was wholly illegal and contrary to provisions of law, they said.

According to appellant, Volvo excavators were vehicles of special types adapted for use only in a factory and not for use on roads.

The Apex Court had held that expression `adapted for use' could not be larger in their import by including vehicles, which were not suitable for use on roads.

Special Government Pleader said that definition of `motor vehicle' would clearly show that there was no requirement that a motor vehicle should have inflated tyres.

Quoting judgements of the apex court, the Bench said that excavators mounted on tracks were used for excavating earth and they could not be used upon public roads.

The Kerala High Court had also said that excavators had to be held as not motor vehicles falling under the definition of Motor Vehicles Act.

The Bench held that impugned show cause notice could not be sustained and it was hereby set aside.