THE HON'BLE SRI JUSTICE T. VINOD KUMAR
AND
THE HON'BLE SRI JUSTICE PULLA KARTHIK
Writ Petition No. 3462 of 2008
ORDER:(per the Hon'ble Sri Justice T.Vinod Kumar)
1. This Writ Petition is filed for issue of a Writ of Certiorari to
call for the records relating to the assessment order passed by
the 1st respondent, dt.29.12.2007, treating the educational
activity conducted by the petitioner as a business activity and levying tax on the disputed turn over, as illegal and contrary to the provisions of the A.P.VAT Act, 2005(for short 'the Act'), and also contrary to the law laid down by the Hon'ble Supreme Court in University of Delhi v. Ram Nath1.
2. Heard Tej Prakash Toshniwal, learned counsel for the petitioner, Sri K.Raji Reddy, learned Special Standing Counsel for Commercial Taxes appearing for respondents, and perused the record.
3. The case of the petitioner is that it is running an educational institution with hostel facility to its students, where the students are served/supplied with food during the term of 1 AIR 1963 SC 1873 2 their education with the petitioner-institution; that for the purpose of imparting education, petitioner is charging requisite fee, which includes tuition fee, supply of educational material and also providing hostel facility including the food, washer- men charges, etc., and the same cannot be subjected to tax as providing food to students, who seek admission into the petitioner-educational institution cannot be considered as a business activity, inasmuch as there is no trade or commerce involved.
4. In support of the above said contention, petitioner has relied on the judgment of a Division Bench of the erstwhile High Court of A.P. in Goutham Residential Junior College, Gudavally, Vijayawada & others v. The Commercial Tax Officer, Benz Circle, Vijayawada & Others2.
5. Counter affidavit on behalf of the respondents is filed.
6. Sri K.Raji Reddy, learned Special Standing Counsel for Commercial Taxes appearing for respondents-authorities, relying on the said counter affidavit, would contend that supply of food by the petitioner-educational institution is for consideration, in the form of mess charges, and the same would 2 45 APSTJ Pg.49 3 answer the description of sale under Section 2(28) of APVAT Act, 2005 read with Explanation-V appended thereto. He would further contend that it is only by way of an amendment brought to the provision of Section 4(9) of APGST Act, 2017, w.e.f. 01.09.2006, the prescription of Rs.1,000/- per month and above as mess charges collected has been specified for levy of tax and since the period involved in the impugned assessment order relates to the tax period from April, 2005 to March, 2006, petitioner is liable to pay tax on the value of mess charges collected, irrespective of the amount collected, since the same would constitute sale price as defined under Section 2(29) of the APVAT Act, 2005, and therefore he seeks to sustain the impugned assessment order.
7. We have taken note of the above said submissions.
8. The Hon'ble Supreme Court in Ram Nath's case(1 supra) had observed that "it may be legitimate to observe that it is not surprising that the Act should have excluded education from its scope, because the distinctive purpose and object of education would make it very difficult to assimilate it to the position of any trade, business ........".
9. Following the said principle, a Division Bench of the erstwhile High Court of A.P. in Goutham Residential Junior 4 College's case(2 supra) held that imparting of education is not a commercial activity and if any activity incidental to the said core activity, which is not commercial in nature, particularly, supplying of food to students, cannot be treated as business for it being subjected to tax.
10. We see no reason to take a different view from the view expressed by the coordinate Bench in Goutham Residential Junior College's case(2 supra), which has placed reliance on the decision of the Hon'ble Supreme Court in Ram Nath's case(1 supra) to arrive at the above said conclusion. In view of the same, the impugned order cannot be sustained.
11. Accordingly, the Writ Petition is allowed and the impugned order, dt.29.12.2007, passed by the 1st respondent, is set aside. No order as to costs.
12. Consequently, miscellaneous petitions pending, if any, shall stand closed.
___________________ T. VINOD KUMAR, J ___________________ PULLA KARTHIK, J 29th October, 2022.
gra 5 THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SRI JUSTICE PULLA KARTHIK WRIT PETITION No. 3462 of 2008 (per Hon'ble Sri Justice T.Vinod Kumar) Dt.29.10.2022 gra