IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.52093/2019 (T – MVT) BETWEEN:
THE PRINCIPAL CANADIAN INTERNATIONAL SCHOOL No.4 & 20, MACHENAHALLI YELAHANKA BENGALURU-560064 REP. BY SMT.MALATHI SASTRY THE PRINCIPAL. …PETITIONER (BY SRI SADASHIVA.D., ADV.) AND:
1. THE STATE OF KARNATAKA REP. BY PRINCIPAL SECRETARY TRANSPORT DEPARTMENT GROUND FLOOR, M.S. BUILDING Dr. AMBEDKAR ROAD, BANGALORE-560001.
2. THE COMMISSIONER FOR TRANSPORT AND ROAD SAFETY GOVERNMENT OF KARNATAKA 1ST FLOOR, BMTC COMPLEX SHANTHINAGAR, BANGALORE-560027.
3. THE REGIONAL TRANSPORT OFFICER OFFICE OF THE REGIONAL TRANSPORT OFFICER YELAHANKA, BENGALURU-560064.
4. THE REGIONAL TRANSPORT OFFICER OFFICE OF THE REGIONAL TRANSPORT OFFICER [NORTH], YESHAWANTHPURA BANGALORE-560022.
5. THE REGIONAL TRANSPORT OFFICER OFFICE OF THE REGIONAL TRANSPORT OFFICER K.R. PURAM, BENGALURU-560049.
6. THE REGIONAL TRANSPORT [ELECTRONIC CITY] OFFICE OF THE REGIONAL TRANSPORT OFFICER BTM 4TH STAGE, 2ND BLOCK-ELECTRONIC CITY BENGALURU-560076.
7. THE REGIONAL TRANSPORT OFFICER OFFICE OF THE REGIONAL TRANSPORT OFFICER JNANABHARATHI, MALLATHAHALLI BENGALURU-560110. …RESPONDENTS (BY SRI T.K.VEDAMURTHY, AGA.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED DEMAND NOTICES 1. DATED 05.08.2019 IN RESPECT OF MOTOR VEHICLE NUMBER KA-50/8040 DEMANDING THE MOTOR VEHICLE TAX AMOUNTING TO RS.7,84,849/- FOR THE PERIOD FROM 08.01.2013 TO 31.12.2019 IS ANNEXURE-A; AND ETC., THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioner has challenged the demand notices issued by the respondent-Authorities demanding the Motor Vehicle Tax for the periods from 08.01.2013 to 31.12.2019 in respect of the motor vehicles owned by the petitioner-Institution.
2. The petitioner claims to be the Canadian International Education School offering International Baccalaureate Diploma [IB Diploma] awarded by the International Baccalaureate Organization Geneva, Switzerland equated with +2 stage [Grade-12] qualification of an Indian Board. It is submitted that the petitioner is imparting education to children and students from Kindergarten to 12th standard for Indian/Foreign students and for non-residential Indian and transients of Indian Children, as per the syllabus [courses] of study approved by the International Standards, recognized by Council of International Schools of University of Cambridge, International Schools of University, BED FORD, International Schools of University of Cambridge BED FORD MA-01730-1433.
3. It is submitted that the respondent Nos.3, 4, 5, 6 and 7 have registered the respective motor vehicles belonging to the petitioner’s International School as ‘Educational Institution Bus’ on being satisfied that the said motor vehicles are exclusively used for conveyance of students and staff of the petitioner’s Educational Institution by levying and collecting motor vehicle tax as per item No.8 [f] [ii] of schedule – Part A of the Karnataka Motor Vehicles Taxation Act, 1957 ['Act, 1957' for short] at the rate of Rs.80/- for every square meter of floor area and issued Educational Institute Permits accordingly.
4. Subsequently, on the audit objections raised by the Comptroller of Auditor General that these Educational Institution buses do not comply with Rule 178 of the Karnataka Motor Vehicles Rules, 1989 ['Rules, 1989' for short] as the petitioner’s Institution is not recognized by the State Government or not governed by the Karnataka Societies Registration Act, 1960 ['Act, 1960' for short] to be treated as private service vehicles, the respondent - Authorities demanded the difference of motor vehicles tax applying the tax applicable to item No.8 [e] of Schedule – Part ‘A’ of the Act, 1957. Such tax liability was determined applying the rate of Rs.1,100/- for every square meter and demand notices were issued by the respondent Nos.4, 5, 6 and 7. However, respondent No.3 has issued the demand notice treating the petitioner’s Educational Institution bus as public service vehicle, demanding the tax at the rate of Rs.2,250/- per square meter of floor area. Hence, the writ petition.
5. Learned counsel for the petitioner submitted that the demand notices issued by the respondent- Authorities are without jurisdiction. No application of mind is forthcoming, in the absence of the reasons recorded by the authorities for quantifying the tax liability. Different respondents have demanded different rates of tax. There being no uniformity/consistency in the determination of tax liability and the decision taken unilaterally without providing an opportunity of hearing to the petitioner solely on the basis of audit objections is bad in law and the same calls for interference by this Court.
6. Learned counsel relied upon the various provisions of the Act to contend that the vehicles used by the petitioner requires to be construed as ‘Educational Institution Bus’ in terms of Section 2[11] of the Act and not a ‘Private Service Vehicle’ as defined under Section 2[1][ee] of the Act, 1957. It was argued that the opinion of the Comptroller of Auditor General cannot be the basis for demanding the difference of tax. Accordingly, seeks for setting aside the impugned demand notices.
7. Learned Additional Government Advocate appearing for the respondents supporting the impugned demand notices, submitted that the petitioner- Institution is not recognized by the State Government or is a society registered under the provisions of the Act, 1960. Hence, the vehicles of the petitioner-Institution has to be construed as ‘Private Service Vehicles’.
8. Heard the learned counsel appearing for the parties and perused the material on record.
9. The main controversy involved herein is the classification of the motor vehicles owned by the petitioner-Institution for the purpose of determining the tax liability under the provisions of the Act, 1957. It is the specific case of the petitioner-Institution that reply was filed to the notices issued by the respondent- Authorities enclosing the copies of the clarifications said to have been issued by the then Commissioner for Transport, wherein it has been clarified that the Motor Vehicles Tax has to be levied to the vehicles in question as ‘Educational Institution Bus’ and not as ‘Public or Private Service Bus’. On receipt of the objections/reply, it was obligatory on the part of the respondent-
Authorities to provide an opportunity of hearing to the petitioner before issuing the demand notices. The notices issued under Section 8A of the Act, 1957 at Annexures-H and J indicates that on the audit objections raised, the difference of amount is demanded by the Authorities. Except the audit objections, no other reason is assigned to determine the tax liability on the vehicles in question as Private Service Vehicles.
10. It is well settled law that reasons are the harbinger between the mind of the maker of the order to the controversy in question and a decision arrived at. In the absence of the reasons, the order impugned is void ab inito and hit by the principles of natural justice. As such, the order impugned is not sustainable. Besides the same, it is ex-facie apparent that there is flagrant infraction of the principles of natural justice. It was necessary to provide an opportunity of hearing to the petitioner-Institution. Such a basic requirement not being complied with, the demands impugned cannot be approved.
11. For the aforesaid reasons, The demand notices at Annexures-A to F, G to R shall be treated as show cause notices to which the petitioner-Institution shall furnish reply/explanation before the RTOs concerned within a period of two weeks from the date of receipt of certified copy of the order. The respondent - Authorities shall consider the objections of the petitioner-Institution and after providing an opportunity of hearing, shall take a decision in the matter in accordance with law, by passing a speaking order assigning reasons. Such compliance shall be made within a period of eight weeks from the date of submission of reply/explanation by the petitioner- Institution.
12. The petitioner-Institution shall appear before the respondent No.3 on 07.01.2020, before the respondent No.4 on 10.01.2020, before the respondent No.5 on 13.01.2020, before the respondent No.6 on 16.01.2020, before the respondent No.7 on 20.01.2020 and shall take further orders.
Writ petition stands disposed of in terms of the above.
Sd/- JUDGE NC.