The court emphasized that the classification of a vehicle as a private service vehicle is not solely dependent on the vehicle being in the name of a business concern, and that the demand for payment of the difference in tax and termination of hypothecation should be justified.

Mr. P.N. Ravindran, J.

The petitioner is the Manager and Secretary of Sree Chithira Thirunal Residential Central School, a school affiliated to the Central Board of Secondary Education. In his capacity as Manager of the school, the petitioner purchased a motor vehicle bearing registration No. KL-01-H-565 from its registered owner Sri. Vinod S. Nair. After the petitioner purchased the vehicle, he submitted Ext. P1 application in the prescribed form accompanied by a letter dated 01/06/2009 for transfer of ownership of the vehicle and to alter the class of the vehicle as educational institution bus. In that letter the petitioner stated that the vehicle is presently classified as a private service vehicle and tax has been paid up to 30/06/2009. When the application was kept pending, he filed WP (C) No. 20116 of 2010 in this Court. Ext. P3 judgment delivered on 17/09/2010 this Court directed the first respondent to dispose of the application filed by the petitioner for transfer of ownership of the vehicle expeditiously and in any event within one month from the date of receipt of a certified copy of the judgment. The first respondent thereafter passed Ext. P4 order dated 12/10/2010 by which he directed that the application for transfer of ownership, alteration of the class of the vehicle and transfer of the permit can be considered only if the balance tax due in respect of the vehicle is paid and the hypothecation is terminated. The first respondent took the stand since the sum of Rs.5,19,585/- and additional tax is due in respect of the motor vehicle for the period from 26/05/1999 to 30/06/2009 and it stands hypothecated to a financier, unless the arrears of tax is paid and the hypothecation is terminated, the application for transfer of ownership, transfer of permit and for alteration of the class of the vehicle cannot be considered. Ext. P4 is under challenge in this writ petition.

2. It is contended that as the vehicle had not been reclassified when it was transferred to the name of Sri. Vinod S. Nair in the year 1999 and there was no demand for motor vehicles tax by treating the motor vehicle as a contract carriage during the time it belonged to Sri. Vinod S. Nair, the respondents cannot demand tax at enhanced rate and therefore, the stipulation that the petitioner should pay the difference in tax cannot be sustained. As regards hypothecation of the vehicle, it is contended that notice of termination in the prescribed form signed by the financier was enclosed along with the application and therefore the statement in the impugned order that the hypothecation should be terminated is not sustainable.

3. The first respondent has filed a counter-affidavit dated 29/08/2011 wherein it is stated that the vehicle originally was registered as a light motor vehicle (Omnibus) in the name of Smt. Elizabeth, Pallivilakom, Cheriyamuttom, Poonthura PO, Thiruvananthapuram, at the Regional Transport Office, Thiruvananthapuram on 16/04/1996., that later, the address was changed as Smt. Elizabeth, Managing Director, Viji and Viji Associates (Pvt.) Limited, Viji Bhavan, Poonthura, Thiruvananthapuram with effect from 16/04/1996 and the class of the vehicle was altered as a private service vehicle with effect from 15/05/1996 on application filed by Smt. Elizabeth and that when the vehicle was thereafter transferred to Sri. Vinod S. Nair with effect from 26/05/1999, it was not reclassified as a contract carriage as a result of which tax was remitted only at the rates applicable to a private service vehicle for the period from 01/07/1999 to 30/06/2009. Relying on Section 2(33) of the Motor Vehicles Act it is contended that as the vehicle was transferred to the name of an individual, it cannot be treated as a private service vehicle and has to be reclassified as a contract carriage and tax applicable to contract carriages has to be paid. It is stated that this was not done when the vehicle was transferred to the name of Sri. Vinod S. Nair, but i