JUDGMENT

Rajendra Babu, J.-The appellant before us is Hindustan Aeronautics Limited situate at Sunebeda in Koraput District, Orissa State. They possess several vehicles which are assessed to tax under Item No. 6 of the Schedule annexed to Orissa Motor Vehicles Taxation Act, 1986 (hereinafter referred to as the Act ). In respect of vehicles bearing registration Nos. ORK 3597, ORK 3810, ORK 5638, ORK 5639 and OSK 1563 proceedings were initiated by the Taxing Officer under the Act. On February 22, 1991 the Tax Inspector, Orissa Motor Vehicle Department, stopped and checked the vehicles bearing registration Nos. ORK 3597 and ORK 3810 and the remaining three vehicles on March 4, 1991 while proceeding from Sunabeda to Koraput carrying college students and employees. He issued a vehicle check report stating that the vehicle was being used for hire and reward as contract carriage and seized the vehicle. The vehicle was released on March 4, 1991 on payment of differential tax for different periods. A notice was issued to the appellant to clarify (i) the date from which the bus was plying to Koraput or to school at Sunabeda; (ii) amount of fare collected from each student for such journey from time to time on daily/monthly basis, and (iii) number of students performing journey in the bus. The Administrative Officer of the appellant replied to the said notice stating that the vehicles are used only as an amenity extended to the children of the employees to facilitate them to attend the school or college; that the tax paid earlier was appropriate and sufficient; that the bus was not liable to tax at a higher rate as it does not come within the definition of "contract carriage" and, therefore, he claimed refund of the entire amount collected at the time of release of the vehicle. The Taxing Officer did not accept the explanation offered by the appellant and took the view that the appellant is realising hire charges at different rates may be at nominal or subsidised rates from the travellers or passengers of vehicle for their journey from Sunabeda to Koraput and vice versa. Although it was made clear that they are not charging any amount from any of the college or school going children to Koraput and back, even then the view was taken that it should be deemed that they were charging money from travellers or passengers for carrying them in their vehicles.

2. Appeals were preferred in respect of each of the said vehicles. It is contended before the appellate authority that the vehicles of the appellant are private service vehicles which are engaged for transporting its employees to different work sites and are also used for providing transport to the school/ college going children of the employees and even if any charge was collected it does not amount to plying the buses for hire or reward inasmuch as there was no motive to earn profit. It is contended that there is no contract between the appellant and its employees and, therefore, Section 2(7) of the Motor Vehicles Act, 1988 was not attracted. In the absence of such a contract, it is claimed, the vehicles cannot be termed as "contract carriage" in the light of the decision of this Court M/s. Tata Engineering and Locomotive Co. Ltd. v. The Sales Tax Officer & Regional Transport Officer, Poona & Anr.1 . Relying upon the decision in Hindustan Zinc Ltd. & Anr. v. State of Rajasthan & Ors.2 , it was claimed that even if certain collections were made from the children of the company employees, it does not justify to treat the buses as "contract carriage". The appellate authority is of the view that a private service vehicle should be understood to be one which is used for own trade or business but it should not be used for the purpose of hire or reward. On the material on record that the buses were carrying college students and employees by collecting fees and, therefore, were being used for hire or reward as a contract carriage. The appellate authority held that there was overwhelming evidence