Telangana High Court
Kakatiya Residential College ... vs Commercial Tax Officerii, on 29 October, 2022
Bench: T.Vinod Kumar, Pulla Karthik
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
AIR 1963 SC 1873
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
45 APSTJ Pg.49
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
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
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
