A division bench of the Gujarat High Court has asked the RTO to return the excess tax it had collected or adjusted. The matter is related to a private company that runs buses to ferry school children. The company had moved the high court after the RTO charged it four times the tax that was applicable.

The court in its order observed that as per a 2005 notification of the state government, the firms that run school buses needed to provide a certificate confirming that they only ferried students of education institutes.Once this certificate was presented before the RTO, then the firms are entitled to get the tax-adjusted for the actual tax paid and the pending tax. The court also added that the RTO will also have to return the buses it confiscated.The court observed that in this case, the RTO had confiscated 40 buses of the company that ferried school children. Of this 15 had been released following payment of Rs40 lakh tax.

The company had moved the court stating that it was being charged tax applicable to normal transport firms and not the tax that was applicable to firms that used their buses only to ferry school children.The court observed that the state's own notification pointed out that any company that provides a certificate stating that it works for and is associated with only education institutes need to pay the tax charged on school buses.As per the notification, the company owed the RTO Rs 3.33 lakh as tax for the 15 buses that were released and Rs 5.33 lakh for the rest of the 25 buses. Thus it owed a total of 8.66 lakh as tax to the RTO. However, the RTO had charged the company 4 times.

The court ordered that the RTO should immediately release the buses. It also said that the company will have to provide the certificate as per the notification.

Court Observed

As per a 2005 notification of the state government, the firms that run school buses needed to provide a certificate confirming that they only ferried students of education institutes