JUDGMENT S. R. Singh, J.
1. Questions raised in this writ petition are two-fold : First, whether buses owned by recognised educational Institutions and used exclusively for the conveyance of pupil to and from the Institution come within the purview of "public service vehicle" so as to be liable to pay additional tax under Section 6 of U. P. Motor Vehicles Taxation Act, 1997 (hereinafter referred to as the Act)? ; Second, whether the exemption from payment of additional tax under the Act granted to "stage carriages" owned by recognised educational institution and used exclusively for transportation of pupil of the institution to and from the institution granted vide clause (v) inserted in Rule 29 of the U. P. Motor Vehicles Taxation Rules. 1998 (in short the Rules) vide Notification dated 28.4.1999 is retrospective in operation?
2. The instant petition has been filed by 'All India Public School's Welfare Society. Ghazlabad', a registered society through its President Shri Gyan Prakash for a general direction to the respondents to treat the buses owned by recognised educational institutions as exempted from the liability of payment of additional tax with effect from 9.11.1998, i.e., from the very inception of the enforcement of the Act. The relief is not in respect of any particular motor vehicle owned by any particular educational institution and used for transportation of students to and from the institution. It is rather general and declaratory in nature in that the mandamus sought for is that the respondents be directed to treat the buses owned by recognised educational institutions exempted from payment of additional tax from the very commencement of the Act, i.e., from 9.11.1998.
3. Sri Ashok Mehta, Chief Standing Counsel does not dispute that with effect from 28.4.99, "stage carriages" owned by recognised educational institutions and used exclusively for the conveyance of pupil to and from the institution are exempted as per clause (v) of Rule 29 from the liability to pay additional tax under the Act. The respondent authorities are, however. Insisting upon payment of additional tax even in respect of stage carriages owned by recognised educational Institutions and used exclusively for the conveyance of pupil to and from the institution in respect of the period prior to 28.4.1999.
4. It has been submitted for the petitioners that buses owned by recognised educational institutions and used exclusively for conveyance of pupil to and from the institution do not come within the purview of "public service vehicle" so as to attract the provisions of Section 6 of the Act and, therefore, proceeds the submission, liability to pay additional tax in respect of such vehicles does not arise even independently of Rule 29 of the Rules. In order to appreciate the submissions, the related provisions will have to be looked into. Section 6 of the Act which is the taxing provision is quoted below :
"6. Additional tax on public service vehicle.--(1) Save as otherwise provided in this Act or the rules made thereunder, no public service vehicle, other than those owned or controlled by the State Transport undertaking shall be operated in any public place in Uttar Pradesh unless there has been paid in respect thereof, in addition to the tax payable under Section 4, an additional tax at the rate applicable to such public service vehicle specified in the Fourth Schedule :
Provided that the State Government may by notification, increase by not more than fifty per cent, the rates of additional tax specified in the said Schedule.
(2) The additional tax in respect of a public service vehicle owned or controlled by a State Transport undertaking shall be levied and paid in accordance with the formula specified in the Fifth Schedule.
(3) Where a public service vehicle is wholly or partially exempted from the payment of additional tax by or under this Act a surcharge for the purpose of the fund established under Section 8 shall be levied on its operator at the rate of five per cent of the additional tax that would have been payable on such vehicle had it not been so exempted and such amount shall be credited to the said Fund."
5. It would be evident from the provision aforesaid that the liability to pay additional tax under Section 6 of the Act is in respect of "public service vehicle". The section inhibits the operation of a "public service vehicle" in any public place unless there has been paid in addition to the lax payable under section 4 an additional lax specified in the appropriate schedule. The subsection (3) of Section 6 of the Act imposes a liability of surcharge on "public service vehicles" which are wholly or partially exempted from the payment of additional tax by or under the Act. The surcharge, as would be evident from the section itself is realised for being credited to 'accident' relief fund--a fund established for the purpose of providing relief to the passengers or other persons suffering any casualty in any accident in which a "public service vehicle" is involved, or to heirs of such passengers or other persons. The expression "public service vehicle" is although not defined in the Act but in view of Section 2 (o), the meaning assigned to it in the Motor Vehicles Act, 1988, has been adopted by incorporation for the purposes of the Act as well. "Public service vehicle", as the term is defined in Section 2 of the Motor Vehicles Act, 1988. "means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reword, and includes a maxi-cab, a contract carriage and stage carriage". The word "passenger" in relation to a public service vehicle means any person travelling in a pubic service vehicle but does not include the operator, the driver, the conductor or an employee of the operator of the public service vehicle travelling in the bona fide discharge of his duties in connection with the public service vehicle. Students travelling in a bus owned by a recognised educational institution are no doubt "passengers" within the meaning of the term defined in Section 2 (i) of the Act but a motor vehicle used or adapted to be used for transportation of students would not be liable to be classified as a "public service vehicle" unless It is found that the transportation of students is undertaken by the concerned institution as an independent business activity for "hire or reward."
6. The expression "public service vehicle" appears to have been used in contrast to the expression "public service vehicle" which, as the term is defined in Section 2 (33) of the Motor Vehicles Act. 1988. "means a motor vehicle constructed or adapted to carry more than six persons excluding the driver and ordinarily used by or on behalf of the owner of such vehicle for the purpose of carrying persons for or in connection with, his trade or business otherwise than for hire or reward but does not include a motor vehicle used for public purposes." Section 6 of the Act would be attracted if any motor vehicle is used or adapted to be used by its owner for the carriage of passengers for "hire or reward". In other words, transportation of passengers undertaken as a business activity "for hire or reward" by the owner of any motor vehicles is an essential ingredient of the expression "public service vehicle". "Private service vehicle" on the other hand is meant to be used by the owner or any other person for, or in connection with, owner's trade or business otherwise than for hire or reward. The word "hire" when used as a noun, means : "a payment for temporary use of something : the act of hiring or an instance of this" : and the word "reward" when used as a noun, inter alia, means : "something given or promised in recognition of service, or in requital for ill-doing". In Sales v. Lake and others, (1922) 1 KB 553, the words "plies for hire" in any public street, road etc. occurring in the definition of the term 'stage carriage' came up for consideration. It was held : "To ply for hire is to hold out a carriage to the public as ready for their use. The real test is whether there is a holding out of the vehicle to be hired by the public." The decision find its echo in Hindustan Aeronautics Limited v. Registering Authority and others, JT 1999 (6) SC 542, in the following words :
"In Sales v. Lake and others, the expression "plies for hire" arose for consideration. The language used in the provision considered therein was "every carriage of different descriptions or other vehicle which is intended or used for the conveyance of passengers and which plies for hire in any street, road or place and in which the passengers or any of them are charged to any separate and distinct or at the rate of separate and distinct fares for the respective places or seats therein". The Court was of the view that a vehicle cannot accurately be said to ply for hire unless two conditions are satisfied. Firstly, there must be a soliciting or waiting to secure passengers by the driver or other person in control without any previous contract with them. And, secondly, the owner or person in control who is engaged in or authorised the soliciting or waiting must be in possession of a carriage for which he is soliciting or waiting to obtain passengers. We are not concerned with the second condition. So far as the first condition is concerned, "a vehicle plies for hire" means that is regularly used for such hire, that Is, the vehicle which is offered for such service regularly. The expression "to ply for hire" means to exhibit the vehicle in such a way as to invite those who may desire to hire it for travel in it on payment, of usual fares or to offer its use thereby soliciting customers".
7. True, students do have to pay some charges in lieu of the facility of transportation in the school/college buses but that does not mean that the vehicle is being used by the concerned institution "for hire or reward". The nature of such payment by students would at the best be treated as their contribution towards maintenance charges in lieu of the facility of transportation provided to them.
8. "Private service vehicle" as the term Is defined in Section 2 (33) of the Motor Vehicles Act. 1988. means a motor vehicle constructed or adapted to carry more than six persons excluding the driver and ordinarily used by or and on behalf of owner of such vehicle for the purpose of carrying persons for, or in connection with, his trade or business otherwise than for hire or reward but docs not Include a motor vehicle used for public purposes. In a "private service vehicle" the transportation of persons is on behalf of the owner and is not undertaken as a business activity for hire or reward. Such vehicle is not exigible to additional tax under the Act. Similarly an "educational institution bus" will not come within the purview of "public service vehicle". The term "educational institution bus" as defined in Section 2(11) of the Motor Vehicles Act, 1988. "means 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". Transportation of students in an "educational institution bus" owned by a college, school or other educational institutions is undertaken In furtherance of and in connection with, the activities of the institution otherwise than for "hire or reward" and not as a business activity "for hire or reward". The educational institution bus would thus not qualify itself to be called "public service vehicle" which includes a maxi-cab, a motor-cab, contract carriage, and stage carriage. If, therefore, a motor vehicle is registered as an "educational institution bus" and used for transporting the students to and from the institutions otherwise than on "hire or reward", additional tax under Section 6 of the Act would not be leviable/payable in respect of such vehicle. On the other hand, if a motor vehicle is registered as "stage carriage" or other "public service vehicle", it would be exigible to tax as well as additional tax unless It is exempted wholly or partially from such liability. Rule 28 of the U.P. Motor Vehicles Taxation Rules, 1998 specifies classes of vehicles which are wholly exempted from the payment of tax under the Act and Rule 29 enumerates the classes of vehicles which are liable to taxation to the extent specified therein. Clause (v) in Rule 29 of the Rules Inserted aide notification No. 1373/30.4.99 dated 28.4.99 reads as under :
"(v) Stage-carriages owned by recognised educational institutions and used exclusively for the conveyance of pupils to and from the institution shall be exempted from the payment of additional tax under the Act, and"
9. It would be thus evident that a motor vehicle registered as "stage carriage" which is owned by educational institution and used for the purpose of carrying students to and from the institution shall be exempted from the payment of additional tax under the Act pursuant to the notification aforestated. The term "public service vehicle" includes "stage carriage" irrespective of who is its owner. In such view of the matter, educational Institutions owning a motor vehicle registered as "public service vehicle" as distinguished from "private service vehicle" or "educational institution bus" cannot escape from the liability of payment of additional tax under Section 6 of the Act except on proof that the vehicle is used exclusively for the conveyance of pupils to and from the institution. This will be a matter of evidence being a question of fact. The burden will be on the institution owning a motor vehicle which is registered as a "public service vehicle" to prove that though the vehicle is registered as "public service vehicle" it is not exigible to additional tax under Section 6 of the Act due to the reason that it is exclusively used for transportation of students to and from the institution otherwise than "for hire or reward".
10. In M/s. Tata Engineering and Locomotive Co. Ltd. v. Sales-tax Officer and Regional Transport Officer, Poona and another, AIR 1979 SC 343, it has been held that If a nominal charge is realised from the employees of the company, that would not make the transport a "public service vehicle" carrying passengers so as to attract the provisions of Section 3 of the Bombay Motor Vehicles (Taxation of Passengers) Act. 1958, in which it had been provided that a tax on all passengers carried by road in stage carriages at such rate to be fixed by the State Government from time to time by or in the Official Gazette as would yield an amount not exceeding 20% of the inclusive amount of fares payable to the operator of a stage carriage would be leviable and payable to the State Government. The term "public service vehicle" was not defined in the Bombay Motor Vehicles (Taxation of Passengers) Act. 1958, their Lordships of the Supreme Court, however, held that :
"The word "public" has got a well known connotation and means a carriage to which any member of the public can have free access on payment of the usual charges."
11. Reference may also be made to the decisions of this Court in M/s. Saraya Distillery, Gorakhpur v. Passenger Tax Officer, Gorakhpur, 1990 All LJ 782 and I.T.I. Limited, Allahabad v. Passenger Tax Officer, Allahabad, AIR 1996 All 79, in support of the view we are taking. Both these cases, it may be observed, arose out of the provisions of the U.P. Motor Gadi (Yatri Kar) Adhiniyam. 1962. The owner of the vehicle In the first case, namely, M/s. Saraya Distillery, Gorakhpur, had taken the permit of stage carriage type metador was granted for the purpose of providing conveyance to Its employees and children. In the permit, it was specifically mentioned that the vehicle would be used for the transport of the petitioner's employees and it would not be used for carrying passengers. Admittedly, the employees and their children did not pay any "hire or reward" to the company and it was on these facts that Division Bench of this Court held that the vehicle was not a "stage carriage" within the meaning of Section 2 (g) of the U. P. Motor Gadi (Yatrikar) Adhiniyam, 1962. In I.T.I. Limited (supra), vehicles therein had initially been registered as "stage carriage" but subsequently they were got transferred as "private service vehicle". A Division Bench of this Court on the facts of that case held that the vehicles therein were part of the welfare scheme in respect of the employees of the factory for the purpose of transporting them to and from the factory. The Court on the facts of that case held that the total amount realised from the employees for the purpose of transporting them to and from the factory was about Rs. 13,800, whereas the total cost of the maintenance for the vehicles came to be Rs. 23,672 per month. The Division Bench placing reliance on the Supreme Court decision in Tata Engineering and Locomotive Company Ltd. (supra) held that since the vehicles were being used only for the purpose of its employees and their children under the welfare scheme for the employees, such vehicles would be "private service vehicles" and not "public service vehicles".
12. The conclusions deductible from the above discussion are summed up as under :
"(i) A motor vehicle registered as "educational institution bus" which is owned by an educational institution and used solely for the purpose of transporting students or staff of the institution in connection with any of its activities shall not be exigible to additional tax under Section 6 of the Act and similarly a motor vehicle registered as "private service vehicle" and ordinarily used by or on behalf of its owner for the purpose of carrying persons for. or in connection with, his trade or business otherwise than for "hire or reward" too shall not be leviable to additional tax under Section 6 of the Act,
(ii) On the other hand, a motor vehicle registered as a "public service vehicle" shall be exigible to additional tax under Section 6 except a motor vehicle owned by educational institutions and used exclusively for the conveyance of students to and from the institution otherwise than "for hire or reward". The burden will be on the institution concerned to prove that though the vehicle is registered as a public service vehicle, it is exclusively used for conveyance of the students of the institution otherwise than "for hire or reward". Nominal payments made by students for the facility of conveyance extended to them by the Institution is to be treated as their contribution towards maintenance charges.
(iii) The power to grant exemption under Rule 29 (v) of the Rules exercisable even in respect of a period antecedent to insertion of clause (v) in Rule 29 of the Rules vide Notification dated 28.4.1999.
13. Questions framed in the beginning of this judgment are answered accordingly and the petition is disposed of in the light of the observations made in this judgment. There will be no order as to costs.