Punjab-Haryana High CourtApeejay College Of Engineering vs State Of Hry. & Anr on 10 April, 2015Author:G.S.SandhawaliaBench:G.S.SandhawaliaCWP No. 8643 of 2005                                                            1


                        IN THE HIGH COURT OF PUNJAB AND HARYANA AT
                                       CHANDIGARH

                                                                     CWP No. 8643 of 2005
                                                                  Reserved on:- 31.03.2015
                                                               Date of decision: 10.04.2015


            Apeejay College of Engineering                                    ...Petitioner(s)


                                                    Versus


            State of Haryana and another                                     ...Respondent(s)

            CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR,
                   ACTING CHIEF JUSTICE
                   HON'BLE MR. JUSTICE G.S.SANDHAWALIA

            Present:           Mr. H.L. Tikku, Sr. Advocate,
                               with Mr. Sumeet Goel, Advocate,
                               and Mr. Yashmeet, Advocate,
                               for the petitioners.

                               Mr. Mamta Singla Talwar, AAG, Haryana.

            G.S.SANDHAWALIA, J.This judgment shall dispose of 6 civil writ petitions i.e. CWP

            Nos. 8643, 6451, 6460, 6462, 6479, 6087 of 2005, as common questions of

            facts and law are involved in all the writ petitions.          For dictating the

            judgment, facts are being taken from CWP No. 8643 of 2005, Apeejay

            College of Engineering vs. State of Haryana and another.Challenge in the present writ petition is to the show cause

            notices dated 17.02.2005 (Annexure P-8), 08.03.2005 (Annexure P-9) and

            03.05.2005 (Annexures P-11 to P-18) issued by The Assistant Excise and

            Taxation Officer-respondent no. 2 under Section 6(4) andSection 9(4)of

            the Punjab Passengers and Goods Taxation Act, 1952 (as applicable to the

            State of Haryana) (in short 'the Act') on the ground of lack of jurisdictionSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                          2and being in contravention of the exemption granted to the educational

            institutions. Vide the said notices, the petitioner was asked to attend the

            proceedings for the purpose of assessing the tax on the vehicles owned by it

            and also for the purpose of imposing penalty underSection 9(4)of the Act.The pleaded case of the petitioner is that it is an education

            society set up by the Apeejay Education Society and the college has been

            duly approved by AICTE and the Director of Technical Education,

            Government of Haryana and is affiliated to the Maharshi Dayanand

            University, Rohtak. The education institution runs 15 buses, details of

            registration numbers of which, were mentioned and the said buses were

            used for carrying the children to and from the education institutions.The

            Actprovided that the State Government could exempt any person or a class

            of persons from the operation of the provisions of the Act for promoting

            public interest and vide order dated 22.09.1970 bearing Memo No. 9573-

            ET-(II)-70/23127, exemption had been granted to the education institutions

            from the payment of the passenger tax in respect of Stage Carriage (buses)

            owned by them and used for the transportation of children to and from such

            institutions. It was pleaded that when the notices dated 17.02.2005 and

            08.03.2005 had been received, college had given the reply on 31.03.2005

            (Annexure P-10) wherein, reliance had been placed upon Division Bench

            judgment of this Court inPrincipal, Haryana College of Technology and

            Management, Kaithal vs. State of Haryana and others, 2005 (2) PLR 489

            and the notification dated 22.09.1970 pleading that exemption had been

            granted to the education institutions and it had been held that education

            institutions would take within its fold schools, colleges and universities. InSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                              3spite of the said notification, respondent no. 2 had sought to distinguishthe

            said judgmenton the ground that it was applicable in case of road tax only

            and not that of passenger tax and that the notification pertained to school

            children only. Thereafter, the demand was again raised on 03.05.2005,

            resultantly leading to filing of the writ petitions.Initially, this Court allowed the Assessing Authority to

            determine the passenger tax but interim protection was granted that no

            coercive steps would be taken to recover the demand which may be created

            by the assessment orders subject to the petitioner furnishing adequate

            security to the satisfaction of the Assessing Authority.In the written statement filed, plea of the remedy of appeal

            provided under the Act and the remedy of revision was taken. The action

            was sought to be justified on the ground that the exemption dated

            22.09.1970 only pertained to school children and the petitioner-institution

            was a professional institution and not a school and, therefore, the benefit

            could not be extended to it.            The judgment of the Division Bench inPrincipal, Haryana College of Technology and Management's case (supra)

            was sought to be distinguished on the ground that it pertained to payment of

            road tax under thePunjab Motor Vehicles Taxation Act, 1924. Thereafter,

            the writ petitions were admitted and the interim order was directed to

            continue.Senior counsel for the petitioner has thus argued that in view of

            the exemption granted underSection 10of the Act to education institutions

            vide the letter dated 22.09.1970, the demand was without any justification

            and, therefore, the proceedings are liable to be quashed.SHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                                 4Counsel for the State, on the other hand, justified the demand

            raised and submitted that the letter in question only pertained to school

            children.After hearing counsel for the parties, this Court is of the

            opinion that the demand raised is without any basis as admittedly,

            exemption has been granted to education institutions from the payment of

            passenger tax in respect of such carriage buses owned by them and used for

            transportation of children to and from such institutions.Section 10of the

            Act provides that the State Government may, by general or special order and

            subject to specific conditions, if any, exempt any person or class of persons

            from the operation of all or any of the provisions of this Act, if in its

            opinion, such exemption would promote national or public interest. The

            said Section reads as under:-"10. Exemptions.- The State Government may,
                               by general or special order and subject to specific
                               conditions, if any, exempt any person or class of persons
                               from the operation of all or any of the provisions of this
                               Act, if in its opinion, such exemption would promote
                               national or public interest."It is not in dispute that in view of the above provision, the letter

            dated 22.09.1970 (Annexure P-20) was issued by the Deputy Secretary to

            Government of Haryana, Excise and Taxation Department to the Excise and

            Taxation Commissioner, Haryana, which reads thus:-"Subject:    Exemption of State Carriages (Buses)
                               owned and operated by Educational Institutions in
                               carrying School children from the levy of Passengers
                               Tax underSection 10of the Punjab Passengers andSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                          5Goods Taxation Act, 1952.Reference: Your memo No. 3105/a-iv, dated the
                               20th July, 1970
                                     In exercise of the powers conferred bySection 10of the Punjab Passengers and Goods Taxation Act,
                               1952, the Governor of Haryana hereby exempts the
                               educational institutions from the payment of Passengers
                               Tax under the Act, ibid, in respect of Stage Carriage
                               (buses) owned by them and used for the transportation
                               of children to and from such institutions."2.    This memo issue with the concurrence of
                               the Finance Department's U.O.No.3399-2FG-(1)-70/,
                               dated the 10th September, 1970."A perusal of the above would go on to show that exemption has

            been granted to education institutions from the payment of passenger tax in

            respect of such carriage buses owned by them and used for transportation of

            children to and from such institutions.In similar circumstances, the Division Bench of this Court inPrincipal, Haryana College of Technology and Management's case (supra),

            while dealing with the similar provision regarding the exemptions from the

            payment of road tax under thePunjab Motor Vehicles Taxation Act, 1924,

            held in favour of the educational institution which was a college of

            technology and management by giving a wider interpretation to the word

            'pupil', which was mentioned under Rule 8(i)(iii) of the Punjab Motor

            Vehicles Taxation Rules, 1925 and held that educational institutions

            mentioned in the rule would take within its fold schools, colleges and

            universities and the word pupil would apply to all categories of students.

            The relevant observations read thus:-SHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                               6"7. A conjoint reading           of the provisions
                               reproduced above shows that the motor vehicles owned
                               by the educational institutions are entitled to total
                               exemption from tax provided that the same are used
                               solely for the purposes of carrying pupils to and from
                               the institution or for the purpose directly related to or
                               incidental to the functions of the institution. The
                               language of Rule 8(1)(iii) of the Rules is very wide and
                               takes within its fold the vehicles owned by the
                               educational institutions which are used for carrying the
                               students to and from the institution or for a purpose
                               which is directly related to or is incidental to the
                               functioning of the institution. In our opinion, this rule is
                               applicable to the petitioner's case because the vehicle
                               owned by the College is to be used for the purpose of
                               carrying its students and staff to and from the
                               institution. The use of the vehicle for the staff is directly
                               related to the functioning of the institution because
                               without the staff, the College cannot run. Therefore, the
                               condition incorporated in letter Annexure P4 for levy of
                               road tax at the rate of Rs. 200/- per seat per annum will
                               have to be treated as ultra vires toSection 13(1)of the
                               Act read with Rule 8(1)(iii) of the Rules.8. The plea of the respondents that the students of
                               the College cannot be treated as covered by the word
                               'pupil' as is commonly understood cannot, but be treated
                               as frivolous and vexatious. There is nothing in the
                               language of Rule 8(1)(iii) of the Rules from which it can
                               be inferred that expression 'educational institution'
                               appearing therein is restricted to schools and it does not
                               apply to other educational institutions, like the College
                               and the word 'pupil' is referable only to the school
                               children and not to the students of the College. Rather,
                               by adopting the rule of purposive interpretation, it mustSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                              7be held that expression "educational institution" takes
                               within its fold the schools, colleges, universities etc. and
                               the word 'pupil' comprehends within itself all categories
                               of students."The above said observations are fully applicable in the present

            circumstances also. The educational institutions have been exempted from

            payment of passenger tax in respect of stage carriage buses owned by them

            which have been used for transportation of children to and from such

            institutions. Once the Government itself has taken a decision as such, the

            Authorities below are not justified in trying to deny the benefit of

            exemption which was granted in public interest to the educational

            institutions underSection 10of the Act and thus would frustrate the purpose

            of the exemption granted. Merely because in the heading, the word school

            children had been written, would not mean that the exemption was only

            granted to the children of schools and not to other educational institutions.

            If the State wanted to make a distinction as such, it would have specified

            that the institutions imparting education upto certain level i.e. primary or

            secondary were entitled for the benefit. The distinction, thus, sought to be

            made out is not justified and a liberal interpretation is to be given once

            exemption has been granted to the educational institutions.The plea regarding the alternate remedy under the Act is

            without any basis also since the writ petitions were admitted almost 10

            years earlier and at this stage to relegate the petitioner to its alternative

            remedy, would not be appropriate since it is the settled principle that in

            cases which have been admitted, the petitioners cannot be relegated to the

            alternative remedy after such a long period. Even otherwise, once theSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                              8authorities lacked inherent jurisdiction itself, it would not be appropriate to

            drive the petitioner's to seek its remedy before the authorities. Reference

            can be made to the judgment of the Apex Court in L.K. Verma vs. HMT

            Ltd. and another, 2006 (2) SCC 269, wherein, it has been held as under:-"The High Court in exercise of its jurisdiction
                               underArticle 226of the Constitution, in a given case
                               although may not entertain a writ petition inter lia on
                               the ground of availability of an alternative remedy, but
                               the said rule cannot be said to be of universal
                               application. Despite existence of an alternative remedy,
                               a writ court may exercise its discretionary jurisdiction
                               of judicial review inter alia in cases where the court or
                               the   tribunal   lacks   inherent    jurisdiction   or   for
                               enforcement of a fundamental right or if there has been
                               a violation of a principle of natural justice or where
                               vires of the act is in question. In the aforementioned
                               circumstances, the alternative remedy has been held not
                               to operate as a bar. [SeeWhirlpool Corporation v.
                               Registrar of Trade Marks, Mumbai and Others, (1998)
                               1 SCC 1, Sanjana M. Wig (Ms.) v. Hindustan Petroleum
                               Corpn. Ltd., (2005) 8 SCC 242, State of H.P. and Others
                               v. Gujarat Ambuja Cement Ltd. and Another(2005) 6
                               SCC 499]. In any event, once a writ petition has been
                               entertained and determined on merit of the matter, the
                               appellate court, except in rare cases, would not
                               interfere therewith only on the ground of existence of
                               alternative remedy.[SeeKanak (Smt.) and Another v.
                               U.P. Avas Evam Vikas Parishad and Others, (2003) 7
                               SCC 693]. We, therefore, do not see any justification to
                               hold that the High Court wrongly entertained the writ
                               petition filed by the Respondent."SHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                            9The said view was furtherlaid down inKrishan Lal vs. Food

            Corporation of India and others, 2012 (4) SCC 786 wherein, the Apex

            Court refused to relegate the parties to their alternative remedy of

            arbitration on account of the pendency of the matter for the last 10 years at a

            belated stage. The relevant observations read thus:-"11. It is true that there was an arbitration clause

                               in the agreement executed between the parties. It is

                               equally true that, keeping in view the nature of the

                               controversy, any claim for refund of the amount

                               deposited by the appellant could be and ought to have

                               been raised before the Arbitrator under the said

                               arbitration. The fact, however, remains that the High

                               Court had entertained the writ petition as early as in the

                               year 2002 and the present appeals have been pending in

                               this Court for the past ten 10 years or so. Relegating the

                               parties to arbitration will not be feasible at this stage

                               especially when the proceedings before the Arbitrator

                               may also drag on for another decade. Availability of an

                               alternative remedy for adjudication of the disputes is,

                               therefore, not a ground that can be pressed into service

                               at this belated stage and is accordingly rejected."However, we may hasten to add that we were only adjudicating

            on the show cause notices issued in the year 2005 and not commenting on

            any subsequent amendments made in Rule 9 of the Punjab Passengers and

            Goods Taxation Rules since a Division Bench, in which one of us (G.S.SHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005                                                       10Sandhawalia, J.) was a Member and had occasion to deal with subsequent

            notification issued under Sub Rule (2F)(i) of the Rules inCWP No. 13149

            of 2011, Delhi College of Technology and Management vs. State of

            Haryana and anotherdecided on 24.09.2012.Accordingly, the present writ petitions are allowed and the

            show cause notices dated 17.02.2005 (Annexure P-8), 08.03.2005

            (Annexure P-9) and 03.05.2005 (Annexures P-11 to P-18) are quashed.(S.J. VAZIFDAR)                                       (G.S. SANDHAWALIA)
                  JUDGE                                                   JUDGE


            10.04.2015
            shivaniSHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarhCWP No. 8643 of 2005   11SHIVANI GUPTA2015.04.10 14:08I attest to the accuracy andintegrity of this documentChandigarh