Bala Bhavan Educational Trust Vs Regional Transport Officer (Madras High Court)
Conclusion: Tax Concession on the buses owned by assessee to transport students and staff could not be denied just because the vehicle was registered in the name of Trust and not school as the respective authority failed to see the objects of assessee-trust as an educational Trust.
Held: Assessee-trust was operated the PSBB Group of Schools, a private unaided educational institution affiliated with the CBSE. Assessee-trust was managing these schools, and it applied for permits for its buses to transport students and staff. It applied for permits to avail concessional tax rates for two vehicles under Section 3 read with Item 8(a) of the first schedule of Tamil Nadu Motor Vehicles Taxation Act, 1974. Assessee was issued permit. Later, the Regional Transport Officer, (respondent) demanded to pay taxes on the buses owned by assessee. Assessee had filed the Writ Petition challenging the order passed by the Regional Transport Officer, Chennai, which directed assessee to pay Rs. 500 per bus seat per quarter, totaling Rs. 9,51,300/-. Assessee contended that the 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 Regional Transport Officer, Chennai failed to see that where the functioning and operations of the trust or society were solely in relation to the educational institution, a vehicle did not cease to be an ‘educational institution bus’ under Section 2(11). It was held that the buses were registered as an educational institution bus. The permits were periodically renewed. It was valid from 06.10.2016 to 05.10.2021. Therefore, assessee was given concessional rate in respect of road tax. The respective authority failed to see the objects of assessee-trust as an educational Trust. That apart, the authority made demand with retrospective effect. The permits of assessee buses were already renewed under the caption of Educational Institution Bus. Assessee was not served with any show cause notice and was not given an opportunity to explain whether the buses were used only for educational institution or other purposes. In order to apply for permit under Section 8(a) of M.V. Act, the Form PEV to be submitted for permit in respect of educational institution bus. In the said form, assessee categorically mentioned the name of the educational institution which was duly accepted and granted permit to the buses owned by the assessee-trust.
