TMI Blog2023 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of business of running restaurant, eating house or a hotel. As rightly submitted by the learned counsel for the petitioner, section 2(10) (d) of the VAT Act specifically refers to only a restaurant or eating house or a hotel but the word hostel is not specifically included therein. Therefore, the inclusion of the petitioner s institution in the category of dealer for the purpose of AP VAT Act, 2005 and assessing the same to tax U/s 21 of AP VAT Act is not correct. The petitioner s case was that the fee charged from the visitors of the hostel is not the actual price of the food consumed by them and the principle of charging the fee is the same as in the case of other hostels where students reside and that a fixed fee is charged for tea, breakfast, lunch and dinner and the same has no relation to the actual consumption and the charges paid by the residents have really a very remote relation to the actual value of the food stuffs consumed by them. Thus, according to petitioner, the transaction of supplying food stuffs to the residents of the hostel cannot be termed as sale nor can the petitioner be said to be carrying on business of buying or selling goods with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Board of Secondary Education (CBSE), New Delhi. As on the date of writ petition, the petitioner s school has 832 students and 70 staff members of both teaching and non-teaching category. A number of schools were sponsored by Bharatiya Vidya Bhavan in the State of Andhra Pradesh and petitioner s school is one among them. (b) The further case of the petitioner is that the Government of India having recognized services of Bharatiya Vidya Bhavan, notified the society as an educational institution of national eminence for the purpose of Section 80(g)(1) of the Income Tax Act, 1962 (for short I.T. Act ). As a result, the funds and donations received by the society and the institutions sponsored by it are eligible for exemption U/s 80 (g)(1) of the I.T Act. The petitioner s school is being run from out of the donations received by it. Apart from the donations, petitioner s school collects nominal fees and mess charges from the students. During the financial year 2004-05, the petitioner s institution had a surplus of Rs.2.87 lakhs which was remitted to Bharatiya Vidya Bhavan Society. The petitioner s school does not retain any surplus amounts with it. Petitioner s accounts are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those enactments are not applicable to the petitioner institution. The supply of food by the petitioner s school to its students is not being made in the course of business and running restaurant, eating house or hotel. Whereas, Section 2(10(d) of the VAT Act specifically refers to only a restaurant, eating house or a hotel. Hence the said act has no application to the petitioner. Hence the writ petition. 3. The 1st respondent filed counter and opposed the writ petition contending thus: (a) The petitioner got alternative efficacious remedy by way of an appeal against the impugned order and hence the writ petition is not maintainable. It is submitted that the petitioner is an educational institution imparting education to the students of various classes. Apart from imparting education, the petitioner is running hostel for boarders supplying food for valuable consideration. After advent of AP Value Added Tax Act, 2005 w.e.f 01.04.2005, a similar petitioner made an application U/s 67 of the said Act seeking clarification from Advance Ruling Authority under the AP VAT Act (i) as to whether their line of activity would come within the meaning of business and whether the hostel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and is undertaking several philanthropic activities one of which is imparting education on non-profit basis. Therefore, petitioner s educational institution shall, by no stretch of imagination, be treated as a dealer within the mischief of Section-2(10) of AP VAT Act, 2005 since there is no element of business, trade or commerce undertaken by the petitioner s educational institution. So far as supply of food items and beverages to the students in the hostel by collecting mess charges is concerned, the said activity is only incidental, ancillary and auxiliary to the main function of the petitioner s institute, which is obviously imparting education and as such the supply of food articles and collection of nominal charges from the boarders cannot be treated as an independent business activity dehors the main function of purveying education with a nonprofit attitude. He would thus perore that the 2nd respondent s decision to assess petitioner s educational institution to tax under AP VAT Act in respect of the mess income of the institute treating the same as sale value is wholly illegal and beyond the scope of the provisions of the AP VAT Act, besides being unjust. He placed reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.946/1939- 1940. Then the notification dated 12.04.2001 issued by the Director General of Tax (Exemptions), Calcutta, a copy of which is filed by the petitioner, shows that Bharatiya Vidya Bhavan, Mumbai, was recognized as Educational Institution of National Eminence under Section 80(g)(2)(iii)(f) of the Income Tax Act, meaning thereby all the donations made to the Bhavan are wholly deductable for income tax purposes. Then, the copies of the letter heads of the petitioner s educational institute shows that the same is mentioned as Bharatiya Vidya Bhavan s residential public school. Therefore, there can be no demur that petitioner s educational institution comes under Bharatiya Vidya Bhavan s public trust and its activity of imparting education is not in commercial lines and on profit motive. In this backdrop, it has now to be seen whether the petitioner institute is exigible to tax under A.P. VAT Act. 9. (a) A.P. VAT Act, 2005 is a consolidated law relating to levy of value added tax on sale or purchase of goods in the state of A.P. and for matters connected therewith and incidental thereto. Section 4(1) lays down that every dealer registered is liable to be registered as a VAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade, commerce, manufacture, adventure or concern is carried on or undertaken with a motive to make gain or profit and whether or not any gain or profit accrues there from; (b) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and (c) any transaction in connection with commencement or incidental or ancillary to the commencement or closure of such trade, commerce, manufacture, adventure or concern; Explanation : - For the purpose of this clause - (i) the activities of raising of manmade forests or rearing of seedlings or plants shall be deemed to be business; (ii) any transaction of sale or purchase of capital goods pertaining to such trade, commerce manufacture, adventure or concern shall be deemed to be business; (iii) a sale by a person whether by himself or through an agent of agricultural or horticultural produce grown by himself or grown on any land whether as owner or tenant in a form not different from the one in which it was produced, save mere cleaning, grading or sorting does not constitute business; 12. Thus, a conjunctive study of above provisions pelluci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinner and the same has no relation to the actual consumption and the charges paid by the residents have really a very remote relation to the actual value of the food stuffs consumed by them. Thus, according to petitioner, the transaction of supplying food stuffs to the residents of the hostel cannot be termed as sale nor can the petitioner be said to be carrying on business of buying or selling goods within the meaning of UP Sales Tax Act. The respondent however contended that the petitioner charges price of foodstuffs supplied to the visitors separately in the bills and that the customers of the petitioner include all and sundry. The division bench of High Court of Allahabad observed that the petitioner is under statutory obligation to maintain a hostel such as the visitors hostel and its activity in supplying foodstuffs to the occupiers of the hostel is an integral part of the objects of the petitioner s institute. It ultimately held thus: 20. Reverting to the facts of the instant case, it is clear that the petitioner is essentially a residential institution where all students, research scholars and research fellows have to reside in the halls of residence and hostels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve remedy is concerned, we find no much force in it. It must be reiterated that mere availability of alternative remedy is not an embargo to entertain the writ petition, rather, constitutional Courts observe judicial restraint and discipline and generally desist from entertaining writ petitions when alternative remedy is available in a given case. That does not mean they lack jurisdiction. Even in cases where alternative efficacious remedy is available, still the constitutional Courts can entertain the writ jurisdiction in certain occasions. In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai AIR 1999SC22 = MANU/SC/0664/1998 the Hon ble Apex Court enumerated such occasions and held as follows: 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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