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2019 (1) TMI 326 - HC - Service TaxValidity of SCN demanding service tax after repeal and introduction of GST - Educational institutions or not - Maharashtra State Council of Examinations - Maharashtra State Board of Secondary and Higher Secondary Education - Gujarat Secondary and Higher Secondary Education Board and (iv) Gujarat Technological University - activity of result processing and pre/post examination facilities provided to these institutions - taxable service or not - Held that - Issue Notice returnable on 23.01.2019. By way of adinterim relief, the further proceedings pursuant to the impugned show cause notice dated 20.04.2018 are hereby stayed.
Issues involved:
Jurisdiction of show cause notice under section 73 of the Finance Act, 1994 post-repeal by Central Goods and Service Tax Act, 2017; Determination of taxable services provided to educational institutions under section 65B(44) and section 65B(51) of the Finance Act, 1994; Interpretation of Notification No.14/2018-Central Tax (Rate) dated 26.07.2018 regarding treatment of Central and State Educational Boards as Educational Institutions for conducting examinations; Application of Gujarat Authority For Advance Ruling Goods And Services Tax decision dated 23.08.2018 on services provided to educational institutions for printing question papers. Jurisdiction of show cause notice under repealed Finance Act, 1994: The petitioners argued that the impugned show cause notice issued under section 73 of the Finance Act, 1994 lacks jurisdiction due to the repeal of provisions related to service tax by section 173 of the Central Goods and Service Tax Act, 2017. They contended that the notice is without legal basis post-repeal. Determination of taxable services to educational institutions: The show cause notice questioned the provision of taxable services in relation to result processing and examination facilities provided to specific educational bodies. The notice aimed to ascertain if these activities fall under the definition of taxable services as per section 65B(44) and section 65B(51) of the erstwhile Finance Act, 1994, focusing on whether the Boards and Universities mentioned qualify as "Educational Institutions." Interpretation of Notification No.14/2018-Central Tax (Rate) dated 26.07.2018: Reference was made to this notification, specifically paragraph (o)(ii) of Notification No.12/2017-Central Tax (Rate), which clarified that Central and State Educational Boards are to be considered as Educational Institutions for the limited purpose of providing services related to conducting examinations. The petitioners argued that this clarification renders the show cause notice misconceived. Application of Gujarat Authority For Advance Ruling Goods And Services Tax decision: The decision dated 23.08.2018 by the Gujarat Authority For Advance Ruling Goods And Services Tax was cited, which ruled that services provided to educational institutions for printing question papers for examinations fall under specific notifications related to tax rates. This ruling was likely presented to support the petitioners' argument against the show cause notice. Court's Decision: Considering the submissions, the Court issued a Notice returnable on 23.01.2019 and granted ad interim relief by staying further proceedings following the impugned show cause notice dated 20.04.2018. Direct service was permitted as part of the order.
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