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TMI Blog2021 (9) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... of the university act can be taken note of. "2.Definitions - In this Act, unless the context otherwise requires,- (a) "affiliated college" means any college within University area affiliated to the University and providing courses of study for admission to the examinations for degrees of the University and includes a college deemed to be affiliated to the University under this Act;" 2.2. Section 4(4) and 4(7) of the University Act, reads as follows: "4(4) to hold examinations and to confer degrees, titles, diplomas and other academic distinctions on persons who - ..... 4(7) to affiliate colleges to the University as affiliated, professional or post-graduate colleges under conditions prescribed and to withdraw affiliation from colleges;" 2.3. So, the above provisions of the University Act make it clear that, the petitioner university was established as an affiliating university under which several colleges in the territorial jurisdiction got affiliated and in those colleges as well as the colleges run by the University itself, the prime function of the university is to hold examinations and to confer degrees, titles, diplomas etc. Also it is the prime function of the uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a body established by the Central Government or State Governments or local authority and who is not deemed as an employee before the commencement of this section. [Explanation 2.-For the purposes of this clause, transaction in money shall not include any activity relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Explanation 3: For the purpose of this Chapter,- (a) an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as having an establishment in that territory; (b) an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons. Explanation 4.- A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory;" 2.6. Like that, with effect from 01.06.2012, Section 66-B was introduced under the heading 'Charge of service tax on and after Finance Act, 2012& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list under Section 66-D. 2.9. In this context, it is to be noted that the Clause 'l' in Section 66-D negative list had been in the statute book for a period from 01.07.2012 to 13.05.2016. However, from 14.05.2016, the Clause 'l' was omitted or taken away. However, in the meanwhile, a notification called "Mega Exemption Notification" dated 20.06.2012 was issued by the Central Government, by exercising the powers conferred under sub-section (1) of Section 93 of the Finance Act, 1994, (32 of 1994), whereby, certain services had been mentioned for giving exemptions from the purview of service tax. 2.10. In this context, it is pertinent to note that, clause 9 of the Mega Notification referred to above was substituted from 11.07.2014, which reads thus: "(9) Services provided, - (a) by an educational institution to its students, faculty and staff; (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by way of: (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;" 2.14. If we look at the said Clause (oa), it could be found that it is almost a replica of Clause 'l' of Section 66-D as referred to above. Therefore, there has been no dispute that, this kind of service tax regime had been occupying the field of service tax from 1994 till 30.06.2017, within which, from 01.07.2012 to 13.05.2016, Clause 'l' of Section 66-D by way of negative list of services had been made available to press into service and during that period the mega notification had come into effect from 2012 onwards, wherein, clause 9 was introduced with effect from 11.07.2014, which had further expanded the scope of claiming exemption for educational institutions and its services and the same has been reiterated or amplified under Notification No.9/16 dated 01.03.2016 and this position continued till 30.06.2017. 2.15. With the teeth of these statutory provisions, now, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contentions raised against the order impugned, ie., the assessment and demand made in this regard by order dated 30.05.2019, by respondent revenue, Mr.Joseph Prabakar, learned Counsel for the petitioner university has made the following broad submissions: 3.1. That the university in all fairness shall be treated only as educational institution, as except doing the services of education, no other service is rendered by the University. 3.2. If it is an educational institution, it is covered under Clause 'l' of Section 66-D, where, the services by way of pre-school education and education up to higher secondary education or equivalent, education as a part of a curriculum for obtaining a qualification recognised by any law and also the education as a part of an approved vocational educational course are all totally exempted under the said negative list and those services are not covered under the purview of service tax net. 3.3. The negative list under Section 66-D was made available for the whole period from 01.07.2012 to 13.05.2016. Therefore, during this period, whatever the educational service rendered by any institution, including the petitioner university cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or affiliation and affiliation related activities, has not accepted the contention of the university insofar as collecting rent from service providers like bank, post office, canteen etc., 3.7. Therefore, by relying upon the said decision in the case of Manonmaniam Sundaranar University Vs. The Joint Director (GST Intelligence), Coimbatore dated 22.02.2021, learned Counsel for the petitioner would canvass the point that, insofar as one portion of the view expressed by the learned Single Judge in the said judgment it is in tune with the various exemptions provided under the Act as well as the notification as referred to above. But, insofar as the view expressed by the learned Judge in the second part of the claim of service tax by revenue with respect to the rent collected from the bank, post office, canteen etc., is concerned, even that view may not be correct according to the learned Counsel for the petitioner with respect, because, it forms part of the educational activities undertaken by the University, as within the vast campus of the university there are number of students, teaching and non-teaching faculties and in order to provide the basic services, the bank, post office a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-D as well as the mega notification and the subsequent notification are concerned, such kind of exemption has been provided only for the educational institution which provides pre-school education and education upto higher secondary school or equivalent or education as a part of curriculum for obtaining a qualification recognised by any law or education as a part of approved vocational course. He would further enlarge his arguments that, the petitioner institution does not impart education directly to the students in various levels like pre-school, higher secondary school, college level or for any vocational courses. 5. Therefore, the learned Standing Counsel for the respondent tries to distinguish the factor that, the petitioner institution is not an educational institution directly imparting education to the students. In fact, it is only an affiliating body created under the Uniersity Act and its prime duty is to affiliate the colleges to the university, for which quid pro quo charges are being collected from the educational institutions and not from the students directly. Therefore, in the process of granting affiliation to educational institutions, and the allied activities s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been answered against the similarly placed university, that would be directly applicable to the case of the petitioner also, therefore, no exemption can be taken by the petitioner university by making these arguments, stating that, whatever services provided by them towards the affiliation and other allied activities are to be treated as exempted service. Therefore, the learned Counsel would contend that, in view of the said ruling of the Advance Ruling Authority as well as the unambiguous provisions available under the Act as well as the notification relied upon by the petitioner, the claim made by the petitioner university that the service tax cannot be levied, is completely without any basis or not backed by any legal provisions under the relevant statute referred to above. Hence, learned Counsel seeks dismissal of this Writ Petition. 9. It is also one of the contention of the learned Standing Counsel appearing for the respondent that, there has been an appellate remedy provided under the Act as against the impugned order and in this context, he has also relied upon the judgment of the Gujarat High Court made in Civil Application No.489 of 2021, in the case of M/s. Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma, Professional Degree or Post Graduate Degree are concerned, in order to obtain such qualification, if education being imparted as a part of curriculum, that education shall be part of service for the purpose Clause 'l' for getting exemption. 15. When an educational institution is imparting education as part of curriculum for obtaining a qualification as stated supra, no doubt, such services are being exempted and in this context, there can be no quarrel from the revenue side also. 16. However, whether such kind of service of imparting education as part of curriculum for obtaining a qualification whether is rendered by the petitioner university is a question where, it is the stand of the revenue that, the university is not directly imparting any education except providing affiliation to the institution, but would not deal with imparting education to the students. Therefore, the activities of affiliation and allied activities like inspection etc., cannot be treated as imparting education by the educational institution concerned. 17. However, insofar as the said stand taken by the revenue is concerned, we must take into aid the expanded provision which has subsequently b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtation, boarding and lodging and other allied activities enabling the students as well as the staff and faculty to come to the institution and getting imparted the education. 19. In this context, sub-clause (iv) of clause 9 referred to above is so important, which says that, services related to admission or conduct of examination by such institution are exempted services. Here, the services rendered to admission is two fold, one is the admission being made for the students in a particular institution. However, such admission can be made legally by the said institution, only on the basis of the affiliation granted by the University, fixing the intake strength of each and every course for the particular academic year. Illustratively, if there is a class where the university has given permission/affiliation for 100 students, not even 101 students can be admitted by the college. Therefore, that admission of the students strictly relates to the affiliation granted by the university. Therefore, the affiliation activity is an integral part of imparting education for any student for getting qualified to get a qualification like degree or diploma. Accordingly, the services provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d "conduct of examination", cannot have such a narrow and pedantic interpretation as has been given by the Advance Ruling Authority in their order dated 19.11.2020, which has been in fact, heavily relied upon by the respondent revenue. Therefore, this Court is not subscribing the said view given by the Advance Ruling Authority in their order dated 19.11.2020. 22. In this context, it is further to be noted that, the very Advance Ruling Authority in the said order in paragraph No.7.6. has also made it clear that, we do not part any opinion on the claim of the applicant that they extend such services to the institutions by extending the affiliation. Therefore, the said issue as claimed by the said university in the said ruling of the Advance Ruling Authority has not been answered and it has been kept open by stating the aforesaid that they do not want to express any opinion on such claim. Therefore, the claim made by the university on that aspect even though was indicated, the issue was kept open. In that context also, this Court feels that, no such pedantic or narrow view can be taken as that would destroy the very concept of providing exemptions to the services rendered by the educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, on both aspects, the assessment and demand made by the respondent, in the considered view of this Court, is untenable and therefore, it is liable to be interfered with. 25. The alternative appeal remedy plea raised by the respondent also has been considered and in this context, the judgment of the Gujarat High Court has been placed for my consideration, where the Court has simply relegated the party therein to go before the appellate authority under Section 86 of the Finance Act. In my considered view, here, the issue is, whether the exemption claimed by the petitioner is tenable or not is the main question, where, already there has been a judgment by the learned Judge by order dated 22.02.2021, as referred to above, where certain area has not been considered, as the mega notification was not brought before the Writ Court and therefore, it normally cannot be resolved by the appellate authority under Section 86 of the Finance Act. Therefore, that kind of relegation of parties to the appellate authority, in this context, in the present case, does not arise. 26. In the result, the impugned order is liable to be set aside as the petitioner educational institution ie., the u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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