The High Court · 2025

M/s. Flytech Aviation limited, 1-g-303/33, 3rd Floor, Nagam Towers. NTR fit;*?,;,r Road, secunde,roao _ iod'6ds."p[rj tVii. Exe. Direcror Smt. K AND

1. 2 A-ssistant Commissioenr (C ot commerciar rur"., Nm J}ffl l1;[?;S";ltlal Audit Unit, o/o. commissioner to Government, Revenue Department, Government of A.p. EXo.?rT:?f"' ...PETITIONER ..,RESPONDENTS Petition under Articre 226 0t the constitution of rndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ of mandamus any other appropriate writ or order or direction to decrare the assessment order for the 2006-2007 dated 1o-4-200g passed by the 1st respondent in treating the educationar activity carried on by the petitioner as business and revying sares tax on the disputed turnover as illegar, contrary to the provisions of the Act, without jurisdiction and consequenry declare the activity cariied on by the petitioner in offering educational seryices and the incidental activity of sale of application forms, tncome from leasing of immbvabre property and suppry of food to the students can not be subjected to tax under the act. l.A. NO:1OF 2OO8(WPMP. NO: 14569 O F 2008) Petition under Section 151 CPC praying that in the circumstances stated intheaffidavitfiledinsupportofthepetition,theHighcourtmaybepleasedto grantstayofallfurtherproceedingspursuanttoorderdatedl0-4-2008passed bythelstrespondentincludingcollectionofdisputedsalestaxofRs'4'67'1201 for the assessment year 2006-2007 pending disposal of the writ petition' Counsel for the Petitioner: SRI TEJPRAKASH TOSHNIWAL Counsel for the Respondent No'1: SPL' SC FOR COMMERCIAL TAXES / GP FOR COMMERGIAL TAX Counsel for the Respondent No'2: GP FOR REVENUE WRIT PETITI ON NO: 1'l 224 0F 2008 Between: Floor' Naoam Towers' NTR Ivl/s Flvtech Aviation Limited, 1 -8-303/13r ^3rd Ui,ir",''slp.'n,j;;T,''"d;;;i;;'or'0"-soo orio, Rep bv its Exe' Director smt' K.Mamatha ...PETITIONER AND 1 2 Assistant Commissioner (CT) (Audit-l), Central Audit Unit' O/o Commissioner of Commercial Taxes' Nampally, Hyderabad' Prl Secretary to Government, Revenue Department' Government of A P'' Hyderabad. ...RESPONDENTS Petition under Article 226 of Ihe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may be pleased to issue a Writ of Mandamus any other appropriate writ or order or directiontodeclaretheassessmentorderpassedfortheA.Y.2004-2005dated l0.04.2oo8passedbythelstRespondentintreatingtheeducationalactivity carried on by the Petitioner as business and levying sales tax on the disputed turnoverasillegal,contrarytotheprovisionstotheAct,withoutjurisdictionand consequentlY declare the activity carried on by the Petitioner in offering educationar services and the incidentar activity of sare of apprication forms and supply of food to the students can not be subjected to tax under the Act. l.A. NO: 1 OF 2008(wPMP. N O:14577 oF 2008) Petition under Section 'l 51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to grant stay of a, further proceedings pursuant to order dt..r0.04.2008 passed by the 1st Respondent incruding corection of disputed tax of Rs.g0,55gr for the assessment year 2004-05 under the Act. pending disposar of the writ petition. Counsel for the petitioner: SRI TEJpRAKASH TOSHNIWAL Counsel for the Respondent No.1: SpL. SC FOR COMMERCIAL TAXES / GP FOR COMMERCIAL TAX Counsel for the Respondent No.2: Gp FOR REVENUE The Court made the foltowing: COMMON ORDER a THE HON'BLE SRT JUSTICE T. VTNOD KT]MAR And THE HON'BLE SMT. JUSTTCE P.SREE SUDHA WRIT PETTTION Nos.11204 t12lI and 11224 of 2008 COMMON ORDER: (Per Hon'ble Sri Justice T.Vinod Kumar) Heard learned counsel for the petitioner and leamed Special Standing Counsel for Commercial Taxes appearing on behalf of respondents, and perused the record'

2. Since, thc petitioner in all these Writ Petitions is one and the sarne 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 I't respondent authority in passing the Assessment Orders lor the years 2OO4-05,2005-06 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 shofi 'VAT Act') respectively whereby the receipts towards supply of lbod 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 provisiorls of the said Acts.

4. Briefly stated, the case of the petitioner is that it is a institution registered with the Director General or. civil Aviation (DGCA), Government of India to admit students for imparling of educatiot'r and training to stuclents 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 i 997 which has been renewed from time to time all through this period.

5. It is the furlher case of thc petitioner that in pur.suance of the registration obtained by it fiom the DGCA, it had admitted students who are interested to undergo training for obtaining Commercial Pilot licence as well as Air Crali Maintenance Engineering etc; that in order to provide such tr.aining 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 befole taking their examination for obtaining necessary 3 cerlification.

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 1 " respondent.

7. It is the further contention o[ 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 itsell is not liable to tax inasmuch as there is no element of 'sale ofgoods' 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. 1,0001 p.m. by inserting a proviso to Section 49 of the VAT Act by issuing4.lotification vide Act 3312006. { 4

9. On the basis of the above submissions, it is contended that the impugned Assessment Orders passed by the 1,r respondent authority clearly rack jurisdiction and authority, and as sucr.r, the petitioner has assailed the said orders by filing the present Wr.it Petitions

10. In support of the aforesaid contentions, reliance has been placed by the petitioner on the decision of this Court in Gowtham Resitlential Junior College and Others Vs. Commercial Tax Of/icer antl othersr , wherein a Division of the erstwhile High Court of Andhra pradesh refering to the decisior.r of the Apex Court in (Jniversity o/' 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 underlaken, it is not commercial in nature, particularly supptying of food to students cannot be treated as business for it to be subjected to

11. The petitioner has also reJied upon the decision of this Court dated 29-\O-ZOZ2 in W.p.No.3462 of 200g, to which one of us (TVK,J) is a member. '45 ApsrJ 49 'AIR 1963 sc 1873 I I i l i I i l 5

12. Per contra, learrred 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 teading 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 imparling skills in order to secure employment and as such, cannot be treated as impafiing 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 leamed 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. lb. We have taken note of respective contentions ursed

17. While, the petitioner clairn itself to be registered institute with DGCA for imparting training for obtaining Comrnercial Pilot License, Air Craft Maintenance Engineering courses. Engine Overhaul and Avionics shop, the respondenl 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 lrom the DGCA, (iovernment of India, which in the lacts of the present case was granted initially in the year 19g7 and has been renewed all througl.r this period.

19. Though, it is contended by the leamed 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 txgler to secure a cerlificate, 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 ceftiflcate. I I

20. Even, in the facts of the present case, the students who want to obtain Commercial Pilot License, Ait Crafi: Maintenance Engineering certification, are required to take part in the examination conducted by the DGCA. ln order to sit for that examination, they are required to attend classes apaft from doing practicals by therrselves, fbr 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 leaming and can be considered as education, as by underlaking practical training one would get educated in respective branch/held.

21. Since, the petitioner is registered with the DGCA lor imparling such practical training, which also includes theoretical aspects for the students to take AMIE examination, this Courl is of the view that the courses offered by the petitioner cannot be equated to a,airtrple 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, Covern rncnt ol India.

22. Since, this Court is now holding that the training being imparted by the petitioner in the field of Civil Ar,.iation being one lorm o1' education, such activity cannot be considered as 'business' as defined under Section 2(bbb) of the ApGST Act or Section 2(6) ol the VAT Act,, dealing with any trade, cornmerce or manufacture or any adventure of concem in the nature of trade for the petitioner to be treated as .dealer' as defi.ed under Section 2(e) of the APGST Act and Section 2(10) of the VAT. Act for il 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 appll,ing the ratio of the decision of Madras High Courl in Dy. Commissioner (CT) Vs. South Indin i; I 9 Textile Research Associationi wherein the activity of purchasing of cotton and selling cotton yam'lcotton 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. Furlher, this Court in W.P.No.3462 of 2008 by referring to the decision ol the Apex Court in Universily of Delhi (supra) having taken a similar view, this Courl 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 vatid 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 t 4l src 197 I , 10 1't 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 rernedy would not bc a bar for. this Court for adjudicating the present Writ Petitions by relegating the pelitioner 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. That Rule Nisi has made Absolute- a-s above witness The Hon,bte snr su.rov pAiti ih; A"iing chief Justice on this wednesday, [tt" irli.ti"tt oay oi abrit, Two TFousand and Twenty Five' //TRUE COPY// SD/-A.V.S.PRASAD DEPUTY REGISTRAR SECTI N OFFI CER To, 1 . The Assistant Commissioner (CT) (Audit-l)' . Central Audit Unit' O/o ' co"mmlsGoner of Commeicial Taxbs, i\ampally' Hyderabad' 2. The Prl Secretary to Government, Revenue Department' Government of A P ' Hyderabad.

3. One CC to SRI TEJPRAKASH TOSHNIWAL' Advocate IOPUCI 4. One CC to SPL. SC FoR COMMERCIAL TAXES IOPUCI 5. Two CCs to GP FOR COMIVIERCIAL TAX' High Court for the State of - Telangana at HYderabad [OUT]

6.TwoCCstoGPFoRREVENUE,HighCourtfortheStateofTelanganaat Hyderabad [OUT] 7 BSR G.IP Two CD CoPies NV HIGH COURT DATED:3010412025 COMMON ORDER THE sr4l 6 ot{ ( c 2 3 frlJB 2025 /),.. :-t ^.,-: u€! ( l : -a WP.Nos.11204,11218 and 11224 ot 2008 AL,LOWING ALL THE WRIT PETITIONS, WITHOUT COSTS (c ,-{fl o\l-,1 \t i , i i I I I I , ) I i I I I I I i I t : l I I I r