Telangana High Court
M/S Flytech Aviation Limited, vs Assistant Commissioner Ct Auditi on 30 April, 2025
Author: T. Vinod Kumar
Bench: T.Vinod Kumar, P.Sree Sudha
THE HON'BLE SRI JUSTICE T. VINOD KUMAR
And
THE HON'BLE SMT. JUSTICE P.SREE SUDHA
WRIT PETITION Nos.11204, 11218 and 11224 of 2008
COMMON ORDER:(Per Hon'ble Sri Justice T.Vinod Kumar) Heard learned counsel for the petitioner and learned Special Standing Counsel for Commercial Taxes appearing on behalf of respondents, and perused the record.
2. Since, the petitioner in all these Writ Petitions is one and the same and the issue involved is similar, they are being disposed of by this common order.
3. The petitioner by the present Writ Petitions has assailed the action of the 1st respondent authority in passing the Assessment Orders for the years 2004-05, 2005-06 and 2006-07 under the Andhra Pradesh General Sales Tax Act, 1957 ( for short 'APGST Act') and the Andhra Pradesh Value Added Tax Act, 2005 (for short 'VAT Act') respectively whereby the receipts towards supply of food to students and sale of application forms are subjected to tax (Sales Tax/VAT) by treating imparting of education and training by the petitioner in the field of Commercial Pilot licence, Air Craft Maintenance Engineering, 2 Engine Overhaul and Avionics Shop as 'business' activity under the respective provisions of the Acts as being illegal, arbitrary and contrary to the provisions of the said Acts.
4. Briefly stated, the case of the petitioner is that it is a institution registered with the Director General of Civil Aviation (DGCA), Government of India to admit students for imparting of education and training to students for obtaining Commercial Pilot licence, Air Craft Maintenance Engineering, Engine Overhaul and Avionic shops; and that the petitioner was granted registration initially in the year 1997 which has been renewed from time to time all through this period.
5. It is the further case of the petitioner that in pursuance of the registration obtained by it from the DGCA, it had admitted students who are interested to undergo training for obtaining Commercial Pilot licence as well as Air Craft Maintenance Engineering etc; that in order to provide such training to the students, to take part in the examination conducted by the DGCA, the petitioner had maintained hostel facility wherein the students interested to pursue the aforesaid courses offered by the petitioner could stay during the period of their training/education 3 before taking their examination for obtaining necessary certification.
6. It is contended by the petitioner that imparting of education cannot be equated to the petitioner carrying on 'business' as defined under the respective enactments and the petitioner cannot be treated as 'dealer' for it to be assessed to tax by the 1st respondent.
7. It is the further contention of petitioner that since, the activity of imparting education would not come within the purview of 'business', the petitioner cannot be treated as a 'dealer', the receipt of amount by the petitioner towards supply of food to students and sale of application forms cannot be subjected to tax, as such activity is incidental to its main activity of imparting education, which itself is not liable to tax inasmuch as there is no element of 'sale of goods' involved.
8. It is also contended by the petitioner that under provisions of the VAT Act, the Government itself had granted exemption from levy of VAT, if the mess charges collected are less than Rs.1,000/- p.m. by inserting a proviso to Section 49 of the VAT Act by issuing Notification vide Act 33/2006. 4
9. On the basis of the above submissions, it is contended that the impugned Assessment Orders passed by the 1st respondent authority clearly lack jurisdiction and authority, and as such, the petitioner has assailed the said orders by filing the present Writ Petitions.
10. In support of the aforesaid contentions, reliance has been placed by the petitioner on the decision of this Court in Gowtham Residential Junior College and Others Vs. Commercial Tax Officer and others 1, wherein a Division of the erstwhile High Court of Andhra Pradesh referring to the decision of the Apex Court in University of Delhi Vs. Ram Nath2 had held that imparting of education is not a commercial activity and if any activity incidental to the core activity is undertaken, it is not commercial in nature, particularly supplying of food to students cannot be treated as business for it to be subjected to tax.
11. The petitioner has also relied upon the decision of this Court dated 29-10-2022 in W.P.No.3462 of 2008, to which one of us (TVK,J) is a member.
1 45 APSTJ 49 2 AIR 1963 SC 1873 5
12. Per contra, learned Special Standing Counsel appearing on behalf of respondents contended that the courses offered by the petitioner cannot be equated to basic education that is imparted leading to obtaining a qualification like Intermediate/Degree or Post Graduation.
13. Learned Special Standing Counsel would contend that the courses offered by the petitioner are only meant for imparting skills in order to secure employment and as such, cannot be treated as imparting education for it to claim the same as not being 'business', and consequently claim exemption on the charges collected by it for supplying food and sale of application forms as not liable to tax.
14. It is also contended by the learned Special Standing Counsel that by undergoing education/training at petitioner's institution, the students do not obtain any certificate and it is only in the nature of a coaching centre to enable the students to take part in the examination conducted by the DGCA.
15. Thus, it is contended that the petitioner cannot claim itself to be imparting education consequently, its receipts towards 6 supply of food and sale of application forms not being liable to tax under the enactments.
16. We have taken note of respective contentions urged.
17. While, the petitioner claim itself to be registered institute with DGCA for imparting training for obtaining Commercial Pilot License, Air Craft Maintenance Engineering courses, Engine Overhaul and Avionics shop, the respondent authorities on the other hand, claim the petitioner to be only a training centre, which is in the nature of a coaching centre.
18. In order to appreciate the rival contentions, it is to be noted that the petitioner in order to provide training in the aforesaid courses is required to have registration/approval from the DGCA, Government of India, which in the facts of the present case was granted initially in the year 1987 and has been renewed all through this period.
19. Though, it is contended by the learned Special Standing Counsel that the petitioner-institute is only a coaching centre to enable the students to take training in the petitioner-institute for being eligible to take part in the examination conducted by the DGCA in order to secure a certificate, such imparting of training 7 can be compared with student joining a recognized Junior College, who on attending the classes, would take part in the examination conducted by the Board and secure a certificate.
20. Even, in the facts of the present case, the students who want to obtain Commercial Pilot License, Air Craft Maintenance Engineering certification, are required to take part in the examination conducted by the DGCA. In order to sit for that examination, they are required to attend classes apart from doing practicals by themselves, for which they need to join in a recognized institute. The petitioner being one such institute registered with DGCA, they would be imparting education in the form of training as per the curriculum prescribed by the DGCA in order to sit for the examination. Thus, imparting of training particularly in a specialized filed is one form of learning and can be considered as education, as by undertaking practical training one would get educated in respective branch/field.
21. Since, the petitioner is registered with the DGCA for imparting such practical training, which also includes theoretical aspects for the students to take AMIE examination, this Court is of the view that the courses offered by the petitioner cannot be equated to a simple coaching centre, where a student joins for 8 sharpening his skills while undergoing regular education in another college, more particularly when the petitioner in order to provide such technical training being in the filed of Civil Aviation is required to obtain registration from the DGCA, Government of India.
22. Since, this Court is now holding that the training being imparted by the petitioner in the field of Civil Aviation being one form of education, such activity cannot be considered as 'business' as defined under Section 2(bbb) of the APGST Act or Section 2(6) of the VAT Act, dealing with any trade, commerce or manufacture or any adventure or concern in the nature of trade for the petitioner to be treated as 'dealer' as defined under Section 2(e) of the APGST Act and Section 2(10) of the VAT Act for it either to obtain registration under the respective enactments or its incidental proceeds of supplying food and sale of application forms being liable to tax.
23. A Division Bench of this Court in Gowtham Residential Junior College (supra) by applying the ratio of the decision of Madras High Court in Dy. Commissioner (CT) Vs. South India 9 Textile Research Association3 wherein the activity of purchasing of cotton and selling cotton yarn/cotton waste resulting from the research activities undertaken by the Association was constructed as exclusively a research activity but not a business activity and the sales and purchases could not be subjected to sales tax, had held that purchasing of food items by the petitioner therein and supplying the same to the students in hostel could not be taxed under the sales tax as such activity cannot be treated as commercial activity.
24. Further, this Court in W.P.No.3462 of 2008 by referring to the decision of the Apex Court in University of Delhi (supra) having taken a similar view, this Court is of the view that the levy of sales tax on the supply of food and sale of application forms by the petitioner from its students, cannot be held to be valid for it to be sustained.
25. Though, a faint submission is made by the learned Special Standing Counsel that the petitioner is required to avail the remedy of appeal provided under the Act, it is to be noted that since, the levy of sales tax under the impugned orders by the 3 41 STC 197 10 1st respondent authority is without jurisdiction, and also having regard to the pendency of the Writ Petitions on the file of this Court, this Court is of the view that existence of alternative remedy would not be a bar for this Court for adjudicating the present Writ Petitions by relegating the petitioner to avail the alternative remedy at this point of time.
26. Accordingly, the Writ Petitions are allowed and the impugned orders are set aside. No costs.
27. As a sequel, miscellaneous petitions pending if any shall stand closed.
____________________ T. VINOD KUMAR, J _________________ P.SREE SUDHA, J Date: 30 .04.2025 Vsv