Kerala High Court Upholds Mandatory Registration of Factory-Used Forklifts and Cranes

Machines Adaptable for Road Use Must Comply with Motor Vehicles Act, 1988, and Kerala Motor Vehicles Taxation Act, 1976

In a significant ruling, the Kerala High Court has dismissed a writ petition by Natural Wood and Veneers Pvt. Ltd., affirming that forklifts and cranes, even when used exclusively within private factory premises, qualify as "motor vehicles" under the Motor Vehicles Act, 1988. The judgment, delivered by Justice Mohammed Nias C.P., mandates the registration and taxation of these vehicles, reinforcing the statutory focus on road adaptability rather than actual use.

The petitioner, a plywood and veneer manufacturer, contended that their forklifts and crane, used solely for material handling within their six-acre factory, did not require registration under Section 2(28) of the Motor Vehicles Act. However, the court ruled otherwise, emphasizing the broad definition of "motor vehicle" which includes any mechanically propelled vehicle capable of road use. The court noted that road-worthiness and adaptability, not the actual use, determine the classification of a vehicle under the Act.

The court further clarified that the machinery's design, such as rubber tyres and functional steering systems, indicated road adaptability, thus necessitating compliance with registration and tax obligations. It was highlighted that the statutory exclusion applies only to vehicles inherently incapable of road movement, which was not the case here.

Moreover, the judgment addressed the taxation aspect under Section 3 of the Kerala Motor Vehicles Taxation Act, 1976. It was determined that the tax liability extends to all motor vehicles used or kept for use in the state, regardless of whether they operate on public roads or private premises. This interpretation aligns with the Supreme Court's rejection of the compensatory-tax doctrine, which previously linked tax liability to road use.

The court also harmonized the Motor Vehicles Act with the Central Motor Vehicles Rules, 1989, underlining that construction equipment vehicles capable of road movement fall within regulatory frameworks. This includes forklifts and cranes as non-transport vehicles with road-adaptability features.

The judgment ultimately dismissed the petitioner's reliance on previous court decisions, as the foundational principles underlying those rulings have since been overruled. Consequently, the court denied any relief to the petitioner, compelling compliance with statutory requirements for registration and taxation.

Bottom Line:

Machines such as forklifts and cranes, used exclusively within private premises but structurally capable of road movement, fall within the definition of "motor vehicle" under Section 2(28) of the Motor Vehicles Act, 1988, and require mandatory registration and taxation under the Kerala Motor Vehicles Taxation Act, 1976.

Statutory provision(s): Motor Vehicles Act, 1988 Section 2(28), Section 39; Kerala Motor Vehicles Taxation Act, 1976 Section 3; Central Motor Vehicles Rules, 1989 Rule 2(cab).

Natural Wood and Veneers Pvt. Ltd. v. State of Kerala, (Kerala) : Law Finder Doc Id # 2812355