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2008 Supreme(Mad) 163
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. MANIKUMAR
Tvl. Suganthi Educational Trust
Versus
The Regional Transport Officer, Chennai (West) Chennai-78
Writ Petition No.35991 of 2002
Decided on : 21-01-2008
For the Petitioner:Radha Gopalan, Advocate
For the Respondent:
The main legal point established is that vehicles owned by a trust, not meeting the criteria for 'Education Institution Bus', are not entitled to concessional tax rates and may be subject to differential tax and penalty.
Headnote:
Motor Vehicles Act - Taxation - Section 2(11), Section 66, Section 15 - The court discussed the definition of 'Education Institution Bus' under Section 2(11) of the Motor Vehicles Act, the necessity for permits under Section 66, and the imposition of penalty under Section 15 of the Tamil Nadu Motor Vehicles Taxation Act.
Fact of the Case:
The petitioner, an Engineering College trust, sought to quash an order directing them to pay tax and penalty applicable to 'Private Service Vehicles' instead of the concessional rate for 'Education Institution Bus' permits.
Finding of the Court:
The court found that the trust's vehicles did not qualify as 'Education Institution Bus' and were used for trade or business, thus not entitled to the concessional tax rate. The court upheld the order directing the surrender of permits and payment of differential tax and penalty.
Issues: The issues revolved around the eligibility for concessional tax rates for educational institution vehicles, the necessity for permits, and the imposition of penalty for non-payment of tax.
Ratio Decidendi: The court held that the trust's vehicles did not meet the criteria for 'Education Institution Bus' and were used for trade or business, justifying the imposition of differential tax and penalty.
Final Decision: The writ petition was dismissed, and the petitioner was directed to surrender the permits and pay the differential tax and penalty within three months.
The petitioner has sought for Writ of Certiorarified Mandamus, calling for the records of the respondent dated 22.07.2002 made in R.No.D3/27639/2002 and quash the same and consequently direct the respondent to collect tax under item 8(a) of the First Schedule to the Tamil Nadu Motor Vehicles in so far as the petitioner is concerned.
2. The case of the petitioner in brief is as follows:
The petitioner trust has established an Engineering College under the name and style of
G.K.M. College of Engineering and Technology, Thiruvenjeri Village, Mopperi Road, Chennai-78 and they have acquired a fleet of eight buses and applied for necessary permits for the vehicles for the use of the college students and staff. The term "Education Institution Bus" is defined under Section 2 (11) of the Motor Vehicles Act, 1988 and the object of the said definition is, that the vehicles should be used solely for the purpose of transporting their students and staff in connection with its activities. Earlier, as per Section 3(h) of Section 66 of the Motor Vehicles Act, permits were not required for education institution vehicles. Subsequently, the said Section 66(3)(h) has been deleted with effect from 14.08.2000 and consequently, permits are being granted under Section 76 of the Act r/w Rule 169 of the Tamil Nadu Motor Vehicles Taxation Rules in the prescribed form, under Rule 170 (viii) of the Rules. The application of the petitioner for necessary permits was considered and while issuing permit, the respondent mentioned the name of the petitioner (Trust) as the holder of the permit and it is further stated that the vehicles would be used for transporting students and staff of the educational institutions owned by the petitioner.
3. It is further submitted that the Accountant General has pointed out that the buses owned by educational Institutions standing in the name of the Trust should not be granted concessional rate of tax applicable to educational institution vehicle, as they do not fall within Item 8(a) of the First Schedule of the Tamil Nadu Motor Vehicles Taxation Act, 1974. On the objections raised by the Accountant General, the Government had called for remarks from the Transport Commissioner, Chennai and it appears that the Transport Commissioner had concurred with the objections of the Accountant General and directed the Regional Transport Officers who had issued permits to the Society/Trust, who administer educational institutions, recover the tax with penalty, from the date when permits were granted until recovery is made, at the rate applicable to the private service vehicles, which was Rs.75/-per seat per quarter for sometime and altered at Rs.100/- per seat per quarter on and from 012. 2001. By order dated 22.07.2002 the Regional Transport Officer, Chennai (West), Chennai-78 has directed the petitioner to surrender the Educational Institution Bus Permits issued in Trusts name and further directed the petitioner to pay the tax with penalty, applicable to "Private Service Vehicles" from the date of issue of "Educational Institution Bus Permits" and apply for "Private Service Vehicle" Permit for the vehicles mentioned in the annexure enclosed therein. Aggrieved by the said order, the petitioner has preferred this writ petition.
4. Mrs.Radha Gopalan, learned counsel appearing for the petitioner submitted that the impugned order is totally violative of the principles of natural justice. The petitioner was not given any show cause as to why the tax for "Private Service Vehicles" should be collected with penalty. She further submitted that all along the respondent had been accepting the tax applicable for educational institution bus i.e., at the rate of Rs.500/-per quarter and the petitioner had been paying the same on annual basis, including the current year 2002, without any objections.
.5. Learned counsel for the petitioner further submitted that imposing a liability on the petitioner to pay tax with penalty being quasi jud
