Dismissed

Delhi College of Technology and Management v. State of Haryana and Anr.

Punjab & Haryana HC24 Sept 2012CWP/13149/2011

Case brief

AI extract

What is this about?

This High Court dismissed a writ petition challenging a demand for passenger tax at Rs.60/- per seat. The court held that a college is distinct from a private school; therefore, the petitioner was not entitled to the exemption benefits granted to private schools under the amended Punjab Passengers and Goods Taxation Rules.

What did the court decide?

Notice dated 21.3.2011 and letter dated 27.6.2011 upholding the demand for passenger tax were not set aside.

Delhi College of Technology and… — Pension and Retirement Benefits | Punjab & Haryana HC (2012)

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CWP No.13149 of 2011 [1]

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THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

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Civil Writ Petition No.13149 of 2011 Date of Decision: 24 – 9 – 2012

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Delhi College of Technology and Management

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....Petitioner

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State of Haryana and another

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....Respondents

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CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL HON'BLE MR.JUSTICE G.S.SANDHAWALIA

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Present: Mr.Vivek Sethi, Advocate for the petitioner.

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Mr.Gagandeep Wasu, Addl.A.G., Haryana.

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G.S.SANDHAWALIA, J.

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The present writ petition has been filed under Articles 226/227 of the Constitution of India praying for setting aside the notice dated 21.3.2011 (Annexure P7) and letter dated 27.6.2011 (Annexure P10) whereby the petitioner-institution has been directed to pay Rs.60/- per student per seat as passenger tax. The challenge is on the ground that the same is contrary to the notification dated 16.3.2009 (Annexure P5) issued by the State of Haryana.

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The pleaded case of the petitioner is that it is an educational institution owned by a registered trust. The petitioner-institution owns vehicles which are used for the purpose of carrying its students and staff from the institution. The vehicles owned by the petitioner-institution are

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CWP No.13149 of 2011 [2]

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registered in the name of the institution and are being used for non commercial basis and no profit is earned out of the same. The petitionerinstitution infuses funds from its own pocket in order to provide an additional facility to the students and staff so as to allow students from far reaching areas an opportunity to gain education. The petitioner-institution is subjected to the passenger tax as per the provisions of The Punjab Passengers and Goods Taxation Act, 1952 (hereinafter to be referred as, `the Act') and the Rules framed thereunder.

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Vide a notification dated 6.2.2006, under Sub-Rule (2F) (i) of Rule 9 of the Punjab Passengers and Goods Taxation Rules, 1952 (hereinafter to be referred as, `the Rules'), the owner of an educational institution bus was to pay lump sum month wise tax at the rate of Rs.60/per seat per month for nine months in a year. Vide notification dated 18.10.2007, sub rule (2F) after Clause (i) of the Rules was amended to the extent that in case of private schools (owning educational institution buses), the rate of bus charges per seat was exempted if same was not exceeding Rs.100/-; if it exceeded Rs.100/- but not exceeded Rs.200/-, Rs.20/- was to be charged and where the bus charges exceeded Rs.200/-; Rs.40/- was to be charged. Thereafter, the said Rule was amended on 16.3.2009 (Annexure P5) and the lump sum tax was exempted on monthly bus charges per seat not exceeding Rs.200/- and in case it exceeded Rs.200/-, the rate was fixed at Rs.20/-. The petitioner being an educational institution was covered by the condition under the proviso and liable to pay Rs.20/- per seat.

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Respondent No.2 issued notice dated 1.2.2011 asking the petitioner to show cause as to why the balance amount of tax at the rate of Rs.40/- per month per seat should not be recovered and interest under

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CWP No.13149 of 2011 [3]

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Section 14-B of the Act should not be levied on the short payments of tax. A similar notice was issued on 21.3.2011. The petitioner represented that the colleges were exempted from additional amount of Rs.40/- per seat towards passengers tax and thereafter another representation was sent on 3.6.2011 to the same effect asking for withdrawal of the show cause notice dated 21.3.2011. Thereafter, notice dated 27.6.2011 was received wherein the contentions raised by the petitioner were found not tenable on the ground that the notification dated 16.3.2009 was applicable to the private schools (owning educational buses) and the petitioner being a College was liable to pay Rs.60/- per seat as passenger tax for lump sum tax payers. Accordingly, the said notice has been challenged on the ground that there is no distinction between the School and College and that the distinction of educational institution would cover the case of the petitioner also and would make it liable only to the payment at the rate of Rs.20/- per seat. 5. In the written statement filed by the respondents, it has been pleaded that the notification provides separate tax rates for private school (owning educational institution buses) and other educational institution buses which ferry the students and the staff other than the private school owned buses. The educational institutions which impart education beyond 10+2 would not be entitled to the benefit of exemption. Schools and Colleges are distinct and independent entities and cannot be termed as one identity. The issue had also been clarified by the Government of Haryana vide circular dated 10.1.2011 whereby it has been cleared that the rate of tax shall be Rs.60/- per seat per month for nine months in a year for the Colleges. The name of the petitioner itself suggested that it is a college and not a school, therefore, the tax at the rate of Rs.60/- per month per seat was

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CWP No.13149 of 2011 [4]

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attracted. It has also been pleaded that the petitioner was liable to deduct tax at source as per Section 5A of the Act to the tune of 1/5^th of the contract amount payable on monthly basis. The petitioner had also raised the same issue in Civil Writ Petition No.10633 of 2011 which was dismissed as withdrawn on 21.10.2011.

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No replication was filed by the petitioner.

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Counsel for the petitioner has submitted that the petitioner being an educational institution was entitled to the benefit of the amendment made on 16.3.2009 (Annexure P5) wherein private schools (owning educational institution buses) were to pay lump sum tax of Rs.20/per seat per month and the State was wrongly issuing show cause notice and demanding the arrears of tax at the rate of Rs.60/- per seat per month. Reliance was placed upon a Division Bench judgment of this Court in Principal, Haryana College of Technology and Management v. State of Haryana and others , 2005(2) PLR 489 to contend that motor vehicles owned by the educational institutions are entitled to exemption of total tax.

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State on the other hand has defended the stand taken in the written statement and distinguished the judgment relied upon by counsel for the petitioner on the ground that the case was decided on 7.2.2005 and the amendments are at the subsequent point of time and pertains to the provisions of the Punjab Motor Vehicles Taxation Act, 1924.

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A perusal of the notification dated 6.2.2006 would go on to show that owner of an educational institution having a bus was liable to pay lump sum tax at the rate of Rs.60/- per seat for nine months. Vide amendment dated 18.10.2007, a proviso was inserted and further benefit was extended to private schools (owning educational institution buses). The

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CWP No.13149 of 2011 [5]

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rate of tax was also different depending upon the monthly bus charges per seat. In cases of bus charges not exceeding Rs.100/-, the payment of tax was exempted and where it exceeded Rs.100/- but not exceeded Rs.200/-, lump sum amount of Rs.20/- per seat per month was to be charged and in case the bus charges exceeded Rs.200/-, lump sum charge was Rs.40/- per seat per month. On 16.3.2009, the earlier proviso was substituted wherein private schools (owning educational institution buses) and charging an amount less than Rs.200/- per month per seat were not liable to pay tax, whereas the tax payable was Rs.20/- over and above the monthly bus charge per seat exceeding Rs.200/-.

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The relevant portions of the amendments of Rules are reproduced below:-

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On 6.2.2006

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“(2F)(i) The owner of an educational institution bus may, in lieu of the tax chargeable on fare and freight, pay lump sum month wise at the rate of Rs.60/- per seat per month for nine months in a year.

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(ii) The lump sum shall be payable for the months of July to March in a year.

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On 18.10.2007

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(iv) In sub-rule (2F), after clause (i),

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(a) for sign”.” Existing at the end, the sign “:” shall be substituted;

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(b) the following proviso shall be inserted and shall be deemed to have been inserted with effect from 1^st March, 2007, namely:-

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“Provided that in case of private schools (owning educational institution buses) such charge of lump sum per seat month for nine months in a year shall be as under:-

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CWP No.13149 of 2011 [6]

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*Monthly bus chargesper seat*	*Lumpsumpayable Tax*
Not exceeding Rs.100/-	_Exempt _
Exceeding Rs.100/- but not	Rs.20/-
Exceeding Rs.200/-
Exceeding Rs.200/-	Rs.40/-”;

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On 16.3.2009

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In the Punjab Passengers and Goods Taxation Rules, 1952, in Rule 9, in sub-rule (2F) in Clause (i), for the existing proviso, the following proviso shall be substituted, namely:-

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“Provided that in case of private schools (owning educational institution buses), such charge of lump sum per seat per month for nine months in a year shall be as under:-

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Monthly Bus charge Lump-sum per seat Payable Tax Not exceeding Rs.200 Exempt Exceeding Rs.200 Rs.20/-.”

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From a perusal of the amendment of Rules, it shows that the

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State Government initially had fixed the tax at flat rate of Rs.60/- per seat per month for nine months in a year for all educational institutions. Thereafter, a proviso was entered into for the benefit of private schools which owned educational institution buses and the amount was reduced and exempted. In certain cases where the schools were charging less than Rs.100/- per seat, the payment of tax was exempted and where monthly bus charges exceeded Rs.100/- but not exceeded Rs.200/-, the tax payable was Rs.20/- and Rs.40/- in cases where the charges were exceeding Rs.200/respectively. Subsequently, the proviso was substituted and exemption was granted till the charges did not exceed Rs.200/- per seat and for payment over Rs.200/-, lump sum tax payable was Rs.20/- per month. Thus, a distinction was carved out between the educational institutions and private

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CWP No.13149 of 2011 [7]

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schools owning educational institution buses. The petitioner is admittedly not a school and is known by the name of Delhi College of Technology and Management. It is the case of the petitioner itself that it is not imparting primary or secondary level education to the students. In fact from the name itself, it is suggestive that it is a College and, thus, cannot be granted the benefit of the amendments carried out in the Rules in the years 2007 and 2009 which only cover the cases of private schools (owning educational institution buses).

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The Court, while examining a statute, has to interpret it in a manner which does not render any part of it as redundant or surplusage The Hon'ble Apex Court in Aswini Kumar Ghose and another v. Arabinda Bose and another , AIR 1952 SC 369 laid down as:

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“It is not a sound principle of construction to brush aside words in a statute as being in apposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute.”

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The classification made by the State is a reasonable classification and even otherwise it is not the case of the petitioner that the said classification is bad and the notification is liable to be quashed. Rather, the prayer is that the demand is contrary to the notification dated 16.3.2009. However, as per amendments of Rules as reproduced above, it is clear that the demand is within the jurisdiction since the petitioner-institution cannot be considered to be a private school and neither it is its case that it is such. The decision in Principal, Haryana College of Technology and Management's case (supra) is also not applicable to the facts of the present case since it was delivered on 7.2.2005 and was taking into consideration the provisions of the Punjab Motor Vehicles Taxation Act,

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CWP No.13149 of 2011 [8]

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1924 and the Rules prevalent under the said Act, whereby total exemption had been granted to the motor vehicles owned by the educational institutions. In the present case amendments have been made subsequently whereby the amount of tax has been categorized separately for educational institutions as well as for schools. Accordingly, no fault can be found in the show cause notice issued by the respondents whereby they have demanded the balance of the passenger tax payable.

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Hence, there being no merit in the writ petition, the same is

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dismissed.

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( G.S.SANDHAWALIA )

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JUDGE

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( AJAY KUMAR MITTAL ) September 24, 2012. JUDGE

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RC/sailesh

Delhi College of Technology and Management v. State of Haryana and Anr.

Case brief

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Delhi College of Technology and Management v. State of Haryana and Anr.

Case brief

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