Home Case Index All Cases Service Tax Service Tax + HC Service Tax - 2014 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 385 - HC - Service TaxConstitutional validity of levy of Service Tax treating Parallel Colleges as “commercial training or coaching centres” coming under Section 65(27) of the Finance Act, 1994 - Article 14 of the Constitution of India - Held that:- When we come to the real picture herein, it can be seen that whether it is parallel colleges run by the writ petitioners herein or by the regular colleges are concerned, they are not issuing any certificate or diploma directly and are not awarding any degree, etc. Going by the averments of both sides, these types of institutions are preparing the students to appear for the University examinations in various subjects, like arts, science, commerce, etc., leading to award of degree, diploma, certificate, etc., which are approved by law. To that extent there is no dispute also. The crucial aspect is whether, there is an intelligible differentia in the classification sought to be introduced. These students form a homogeneous class. The coaching centres which come within the first limb of the Section 65(27) alone are subjected to the tax liability. Therefore, since Parallel Colleges, which are involved herein are also conducting classes and preparing the students for appearing the very same University examinations like regular students, which fact is not disputed and has been practically agreed to in the counter affidavit filed by the respondents in the writ petitions also, we find no distinction between these two classes of students. Merely because some of the students who are less fortunate have found themselves in Parallel Colleges, that cannot lead to a situation where they have to bear the burden of Service Tax as rightly found by the learned Single Judge. The distinction provided in the section is not based on any other characteristics like the curriculum, period of study, infrastructure provided by the colleges, the way in which fees are collected in regular colleges and Parallel Colleges, etc. The legislative policy is clear from Section 65(27) itself. Therefore, we will have to find out, the real object of the provision and the impact of the same. Therefore, the plea raised by the learned counsel for the appellants that students undergoing regular course of study are covered by various other factors like curriculum, period of study undergone, University examinations, etc. are relevant cannot be accepted. Those institutions or colleges, namely, parallel colleges, who are parties before this Court, who are preparing students to obtain certificates or diploma or degree or any other educational qualifications, recognised by law will not be liable to pay Service Tax under Sections 65(26) and 65(27) read with Section 65(105)(zzc) of the Act. The Department will be free to find out the credentials of other institutions or coaching centres as to whether they will come within the first limb of Section 65(27). Such individual cases will have to be dealt with accordingly and in the proper legal manner, as the learned Single Judge has made clear that the judgment is not to be treated as declaring the Section unconstitutional insofar as any other category of educational institution or training centre is concerned. We are not making a Universal declaration in respect of all institutions in whatever manner they are being conducted. - Decided against the revenue.
|