Factory-Use Forklift & Crane Road-Adaptable Motor Vehicles: Kerala HC upholds Mandatory Registration and Tax Liability [Read Order]
It was held that if the machines are liable to registration under Section 39 of the Motor Vehicles Act, they attract the provisions of the Kerala Motor Vehicles Taxation Act.
The Kerala High Court recently held that forklifts and cranes operated inside factory premises are still “motor vehicles” under Section 2(28) of the Motor Vehicles Act, 1988 and therefore mandatorily require registration, insurance and tax liability as per law.
The petitioner, Natural Wood & Veneers Pvt. Ltd. is a company engaged in the manufacture and sale of plywood and veneer from its facility at Vettickal, Mulanthuruthy. The petitioner owned two forklifts purchased in 2005 and 2017 and a crane purchased in 2002 which were used solely to lift and move timber logs within its six-acre factory premises, functioning purely as material-handling equipment.
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The crane and forklift were treated as “machinery” under Section 29 of the Factories Act, 1948 and were subject to periodic safety examinations as well.
It was the contention of the petitioner that since the units never entered public roads, they were not motor vehicles and therefore not subject to registration under Section 39 of the Motor Vehicles Act.
The dispute arose after a complaint dated 28.03.2025 was lodged by the Secretary of the CPI(M) Mulamthuruthy Local Committee alleging unregistered and uninsured operation of the vehicles.
An inspection conducted by the Sub-Regional Transport Officer confirmed that the forklift and crane units were unregistered, uninsured and had never undergone fitness testing since their purchase. The department thereafter issued a notice directing the petitioner to stop the usage of the crane and forklift, citing lack of maintenance, registration, and insurance.
The petitioner, represented by V.Krishna Menon, E.K.Madhavan, P.Vijayamma, J.Surya and A.B.Beenu, contended that Section 39 of the Motor Vehicles Act, 1988, mandates registration only for vehicles intended to be used “in a public place,” and since the equipment in question is operated exclusively within a private enclosed factory, the impugned direction was without jurisdiction.
The petitioner buttressed their arguments citing the Kerala High Court’s decision in RDS Project Limited v. Union of India (2024) and the Supreme Court ruling in Bolani Ores Ltd. v. State of Orissa (1974) among other authorities.
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Meanwhile, the respondent State and Sub-Regional Transport Officer, represented by Special Government Pleader (Taxes) Mohammed Rafiq submitted that the forklifts and cranes are roadworthy and capable of being used on public roads at any time and hence fall within Section 2(28) of the Motor Vehicles Act, 1988.
It was additionally submitted that the factory premises was a public place as it was accessible to workers, visitors and other vehicles,
Justice Mohammed Nias C.P. noted that the definition of “motor vehicle” under Section 2(28) regards whether the equipment is mechanically propelled and adaptable for use on roads.
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The Court held that the forklifts and crane, by design and capability, are road-adaptable, irrespective of whether the petitioner presently uses them on public roads. The Bench rejected the contention that enclosure within factory premises exempts such vehicles from registration, observing that Section 39 does not permit exemption based merely on intended use.
The Court further held that regarding taxation, the cited authorities note that the exemption applies only to machines of a special type adapted only for enclosed premises and not to vehicles otherwise suitable or capable of public-road use as stated in the Motor Vehicles Act, 1956.
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The Court referred to the supreme court ruling in Jindal Stainless Limited and Another v. State of Haryana and Others (2017) where it was noted that a conjoint reading of Section 2(28) of the Motor Vehicles Act Rule 2(cab) of the Central Motor Vehicles Rules, every construction-equipment vehicle capable of movement on public roads clearly falls within the definition of “motor vehicle,” making it taxable under Section 3, irrespective of whether it is actually used, or claimed to be used, only within factory premises.
Accordingly, the Kerala High Court noted the specifications of the crane and forklift to affirm that they are indeed liable to registration under Section 39 of the Motor Vehicles Act, and once they fall within the definition of “motor vehicle,” liability under Section 3 of the Kerala Motor Vehicles Taxation Act necessarily follows
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