The petitioners have sought for writ of certiorari, 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 petitioners are concerned.
2. The case of the petitioners in brief is as follows:
The petitioners trust have established Engineering Colleges under the name and style of Sri Sairam Engineering College, Poonthandalam Dharkast, West Tambaram, Chennai.44 and Sri Venkateswara College of Engineering at Pennalur, Sriperumbudur and they acquired a fleet of 20 buses and applied for necessary permits for the vehicles for the use of their students and staff. The term Education Institution 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.
Section 3 (h) of
Section 66 of the Motor Vehicles Act regarding necessity of permits would not apply to any transport vehicle owned and used solely for the purpose of any educational institution. Subsequently the said
Section 66 (3)(h) was deleted with effect from 14.08.2000 and consequent upon such deletion, permits were 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 applications of the petitioners for necessary permits were considered and while issuing permits, the respondent has mentioned the name of the petitioners as holder of the permit and it is also stated that the vehicle has to be used for transporting students and staff of the educational institutions.
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 the scope of taxation under item 8(a) of the First Schedule under Tamil Nadu Motor Vehicles Taxation Act. 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,managing the educational institutions to recover the tax with penalty at the rate applicable to the private service vehicles which is Rs.75/- per seat per quarter for sometimes and later Rs.100/- per seat per quarter on and from 01.12.2001. The Regional Transport Officer, Chenai (West), Chennai.78 has passed the impugned order dated 22.07.2002 thereby directing the petitioners to surrender the Educational Institution Buses Permit issued in Trust's name and further directed the petitioners to pay the tax with penalty applicable to Private Service Vehicles from the date of issue of Educational Institution Bus Permit and apply for Private Service Vehicle Permit for the vehicles mentioned in the annexure enclosed therein. Aggrieved by the said order, the petitioners have preferred these writ petitions.
4. Mrs.Radha Gopalan, learned counsel appearing for the petitioners submitted that the impugned order is totally violative of principles of natural justice and that the petitioners were not given any show cause as to why the tax for Private Service Vehicles should not be collected with penalty. She further submitted that all along the respondent had been accepting the tax for educational institution bus ie., at the rate of Rs.500/- per quarter and the petitioners 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 the exercise of power,for imposing liability on the petitioners with penalty being quasi judicial, it is incumbent on the respondent to issue show cause and afford an opportunity of personal hearing to the petitioners before making demand for tax/penalty.
6. She further submitted that the Transport Commissioner ought to have considered that the petitioners' Trust are the owners of the Engineering Colleges and that the vehicles were used exclusively for carrying students and staff of the educational institution and, therefore, the vehicles cannot be brought under the definition of " public service vehicle" for which differential rate of tax can be applied and, therefore, the directions to surrender educational institutions bus permits issued in the name of the trust and to pay the tax and penalty applicable to private services vehicle, are liable to be set aside.
7. She further submitted that the trust has been granted permission to establish and run colleges and when the permits stand in the name of the petitioners' trust for the use of vehicles solely for carrying the students and staff, it cannot be denied the rate of tax is applicable for such use, merely on the ground that the permit stands in the name Trust, and not in the name of the educational institution. Finding fault with the authorities, describing the trust or the society, as the holder of permits, she further submitted that the respondent could have very well described the educational institution, namely Sri Sairam Engineering College,or Sri Venkateswara Engineering College as the case may be , as holders of permits and for the fault committed by the Motor Vehicle Authorities, the petitioners trust cannot be penalised by demanding the rate of tax applicable to private services vehicle.
8. Learned Additional Government Pleader appearing for the respondent submitted that vehicles registered in the name of the trust cannot be used for college purposes. If any Educational Institution established and administered by the Trust, uses the vehicle only for the purpose of transporting students and staff of the College, the Trust could have approached the concerned authority and the permit could have been changed in the name of Principal or Correspondent. He further submitted that since both the vehicles were registered in the name of Trust, the demand notice issued by the respondent is fully justified in terms of the provisions of Motor Vehicles Act and clause 8(a) to Schedule of the Tamil Nadu Motor Vehicle Taxation Act.
9. Inviting the attention of the Court to Clause 8 (a) to Schedule 1 of Tamil Nadu Motor Vehicles Taxation Act, 1974 which stated that in respect of vehicles owned by educational institutions (Educational institution bus) for every person (other than the driver) which the vehicle is permitted to carry, the tax would be Rs.150/- per quarter. Learned Additional Government Pleader submitted that the registration of the vehicle should be primarily in the name of the educational institution viz., College or school or institution, for giving the appropriate meaning to the words "Educational Institutions" and he further submitted that the vehicles are registered in the name of Trust. According to him, Tryst has got a different connotation and meaning and the same cannot be equated to an educational institution, as defined in the Motor Vehicles Act.
10. Learned Additional Government Pleader further submitted that the concession given by the Government in respect of the vehicles owned by the educational institutions at the rate of Rs.500/- per quarter is not applicable to the vehicles owned by the trust and, therefore, there is no illegality in directing the petitioners to surrender educational institution bus permits issued in the name of the trust. Consequently they are liable to pay tax with penalty applicable to the private service vehicles from the date of issue of the educational institution bus permit.
11. Learned Additional Government Pleader further submitted that as the petitioner is not entitled to the concession applicable to the educational institution bus, there is no need to issue any show cause notice and, therefore, there is no violation of principles of natural justice.
12. Heard the learned counsel appearing for the parties and perused the material available on record.
13. Before adverting to the facts of the case, it is relevant to extract the definition of the term "owner" as provided under
Section 2 (30) of the Motor Vehicles Act, 1988.
"30."owner" means a person in whose name a motor vehicle stands registered,and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease of an agreement of hypothecation, the person in possession of the vehicle under that agreement."
Education Institution bus as defined under
Section 2(11) of the Motor Vehicles Act 1988 that the vehicle should be used solely for the purpose of transporting students and staff of education institution in connection with its activities.
14. The law relating to the levy of tax as codified under Section 3 of the Tamil Nadu Motor Vehicles Taxation Act is as follows:
" 1) Subject to the provisions of sub-section (2) tax shall be levied on every motor vehicle used or kept for use in the State of Tamil Nadu at the rate specified for such vehicle in the First Schedule or in the Second Schedule or in the Third Schedule, as the case may be,
2) The Government may, by notification, from time to time, increase the rate of tax specified in the Schedules, Provided that such increase, by notification, under this sub-section shall not, in the aggregate, exceed fifty per cent of the rate specified in the First Schedule or in the Second Schedule or in the Third Schedule, as the case may be".
As per Section 3 of Tamil Nadu Motor Vehicles Taxation Act, the amount of tax to be paid is fixed as per clause 8(a) to Schedule 1 of the Act and the quarterly tax at Rs.150/-
15. The rate of tax prescribed in respect of item 8 (a) of the I schedule under Tamil Nadu Motor Vehicles Act in respect of vehicles owned by educational institution (educational institution bus), at the time of registration of vehicle was Rs.500/- per quarter. In respect of the other motor vehicles covered by "Transport vehicle permit and those in respect of which private services vehicle permit", the rate of tax at Rs.150/- per staff.
16. Though the trust is said to have established the educational institutions as per the norms provided by the AICTE a trust can have various activities and administering an educational institution may be one of the activities of the Trust. The vehicle registered in the name of Trust can be used for all activities of the trust, but the educational institution vehicle is meant only for the purpose of transporting students and staff of the education institution. The vehicle registered in the name of the Trust can be used for transporting its trustees,beneficiaries, administrative staff of the trust and so on and so forth.
17. A "private service vehicle" as defined under
Section 2 (33) of the Act, 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.
18. In the instant case, the vehicles owned by the trust is used for the purpose of trade or business,and 'trade' includes activity done by a person, for the purpose of generating income. Therefore,the vehicles owned by the petitioners will not fall within the definition, either school/college or other educational institutions.
19.
Section 66 of the Motor Vehicles Act deals with necessity for permits which reads as follows:
"(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used".
As the vehicles used by the petitioners cannot be brought under the definition of "educational institution bus", consequently, they have to apply for permits under
Section 66 of the Motor Vehicles Act and, therefore, the direction issued by the respondent to surrender the permits of the petitioners is not liable to be set aside. As the petitioners are not entitled to exemption granted for the educational institution vehicles, they are liable to pay the deferential rate of tax applicable to the private service vehicle.
20. Section 15 of the Tamil Nadu Motor Vehicles Taxation Act provides for imposition of penalty and it reads as follows:
"If the tax due in respect of any motor vehicle has not been paid within the period prescribed under
Section 8, the registered owner or the person having possession or control thereof shall--
(a) pay, in addition to the tax, a penalty of such sum, not exceeding twice the amount of the quarterly tax or as the case may be, half of the amount of annual tax payable, as may be prescribed, and different sums may be prescribed for different classes of motor vehicles and for different periods; and
(b) also be punishable with fine which may extend to fifty rupees, and the amount of the tax due by him in respect of such vehicle together with penalty referred to in clause (a) shall also be recovered as if such tax and penalty were a fine".
21.
Section 66 (3) (h) of the Motor Vehicles Act, 1988 shall not apply to any transport vehicles owned by, and used solely for the purposes of, any educational institution which is recognised by the Central or State Government or whose managing committee is a society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India".
Section 66 (3)(h) has been deleted with effect from 14.08.2000 and consequent upon deletion, the petitioners ought to have applied to the concerned Transport Authority for issue of a private service vehicle permit. Admittedly the petitioners have failed to apply for such permits, but have rushed to this Court, seeking for a relief as prayed for in the writ petitions.
22. Since payment of tax is demanded as per Section 8(a) of the Tamil Nadu Motor Vehicles Taxation Act, penal provision is automatically attracted as per Section 15 of the Tamil Nadu Motor Vehicles Taxation Act and therefore, imposition of penalty is also sustained.
23. In the result, both the writ petitions are dismissed. However, the petitioners shall make necessary arrangements for surrendering the permits and also pay the differential rate of tax and penalty applicable to the private service vehicles, within a period of three months from the date of receipt of this order copy.
11.01.2008 Index:yes kvsg To The Regional Transport Officer Chennai (West) Chennai.78 S.MANIKUMAR.,J.
kvsg W.P.Nos.33165 and 33166 of 2002 11.01.2008