The court established that vehicles used solely for educational purposes can qualify for concessional tax rates, irrespective of the ownership registration details.

ORDER

This Writ Petition has been filed challenging the order passed by the first respondent dated 30.11.2016, thereby ordered to pay at Rs.500/- per seat of the bus per quarter, in total for a sum of Rs.9,51,300/-.

2. The petitioner Trust was established in the year 1976 and its object is to run educational institutions. The educational institutions were previously run by the Nungambakkam Ladies Recreation Club in the name of Padma Seshadri Bala Bhavan Matriculation School and Bala Bhavan Primary School (hereinafter referred to as “PSBB School”), which is a private unaided school, affiliated to the Central Board of Secondary Education. The operation of the PSBB Group of Schools remains the sole activity of the petitioner Trust. The petitioner applied permit for its buses. The buses were used for its students and staffs. The permits were issued by the competent authorities under the Motor Vehicles Act, 1988 (hereinafter referred to as “MV Act”), after payment of necessary taxes.

3. The definition of Educational Institution Bus as per Section 2(11) of the MV Act is that “an omnibus, which is owned by a college, school or other educational institution and used solely for the purpose of transporting students or staff of the educational institution in connection with any of its activities”. In order to provide concessional rates of tax as contemplated under Section 3 read with Item 8(a) of the first schedule of Tamil Nadu Motor Vehicles Taxation Act, 1974 (hereinafter referred to as “Taxation Act”). The petitioner submitted an application for necessary permits and was issued permit on 22.07.2005 for the vehicle bearing No.TN-01-Z-7767 and permit dated 19.10.2006 for the vehicle bearing No.TN-01-AC-0747 by the first respondent. The permits were issued after satisfying the definition of educational institution bus and concluded that the petitioner is entitled for concessional rates of tax and on receipt of the same, the petitioner was issued permit. In fact, the permit was renewed periodically and finally they renewed from 06.10.2011 to 05.10.2016. While being so, the first respondent demanded to pay taxes on the buses owned by the petitioner.

4. Mr.Sathish Parasran, learned Senior Counsel appearing for the petitioner would submit that the impugned demand was issued on the ground that the buses were not registered in the name of Principal, Correspondent or Manager of the particular school so as to grant concessional rate of tax. The first respondent failed to see that where the functioning and operations of the trust or society are solely in relation to the educational institution, a vehicle does not cease to be an 'educational institution bus' under Section 2(11) of the M.V.Act. The buses of the petitioner were used solely for the purpose of ferrying the school staff and students for the activities such as sports/tournaments, educational trips, annual day program, sports day, students cultural events, inter-school competitions, workshops, seminars and for the purpose of picking up and dropping the students and staffs from their respective residence to school. The first respondent already registered the buses of the petitioner as educational institution bus and granted permit. All of a sudden, it cannot be said that the buses are not registered in the name of the Principal, Correspondent or Manager of the School and as such, it is not coming under educational institution bus. Though the buses were registered in the name of the petitioner, the purpose of the petitioner is to hold and utilize all the properties for the benefits of the PSBB School. The impugned demand was issued without issuance of any notice or conducting any enquiry. Therefore, it is a clear violation of principles of natural justice.

5. In support of his contention he relied upon the Judgment of this Court reported in 2016 SCC Online Mad 24486 in the case of G.R.Govindarajulu & Sons Charities, Peelamedu, Coimbatore Vs. Regional Transport Officer and the Judgment of the H