Private schools in Assam move HC against GMC trade licence directive

GUWAHATI: Private school managements have moved court against the Guwahati Municipal Corporation (GMC), which directed the institutes to pay trade licence fees. The All Assam Private Schools Association (AAPSA) said law does not treat imparting education as business and thus the municipality can not compel them procuring trade license.
The association moved the high court, as the municipal corporation served showcause notices on several private schools under its jurisdiction for carrying on business without obtaining trade licence under Guwahati Municipal Corporation Act, 1971.GMC is set to reply in court on November 9. According to a previous GMC order issued on February 19, 2018, private schools with more than 300 students have to obtain a trade licence.
Several leading city schools in Guwahati received the GMC showcause notices during the pandemic, when these institutions were facing a financial crunch. A penalty of Rs 50,000 has also been collected by GMC authorities from one of the private schools in August.
“It seems that in the fourth schedule under annexure 1 (Guwahati Municipal Corporation Act, 1971), containing businesses that require to procure trade licence was amended and “schools having more than 300 students” were also added. But the Supreme Court clarified in at least two cases that schools are not a trade, business or profession. Interestingly, in the RTE Act case too the Supreme Court said the state governments may reserve seats in schools as schools are not businesses,” AAPSA president Pankaj Das said.
He said the association, therefore, approached court for a legal battle, as the GMC order was against the Constitution.
“The interpretation about the legal status of schools has been settled by the 11-judge bench constituted on the TMA Pai Foundation case. Schools are not trade, profession or business. Schools are not allowed to make profits. The surplus generated has to be spent for the development of schools. It cannot be declared as a dividend to people running the schools,” said Das.
“When schools are not trade, the people running them cannot get profit, then how can the GMC demand trade licenses from schools?” he asked.
There are more than 11,000 private schools in Assam, the association said, pointing out that more than 99% of these were low-cost institutions.