Get as much written down as possible, who said what and when.
Get as much written info from the council as to why they refused something they had only just granted.
Ask them where in their rules it says you can't have what you presented as a taxi. Many councils have rules but don't have them written down, i.e. passed by committee.
Stick to your guns and insist that the only reason you bought that vehicle was because the council said it would meet their criteria. It should be the council that pays for any alterations, as you would not have bought that vehicle otherwise.
If you are going to a mags court then you should really have proper representation, and I'm surprised no-one wants your money.
But if you still struggle then try
National Private Hire Legal Services Tel 0161 280 8800.