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2005 (8) TMI 336 - HC - Service TaxCommercial training of coaching center - constitutional validity - In the first place, the petitioners raised a contention that parallel colleges do not come within the definition clause contained in s. 65(27) of the Act. Alternatively, they contended that if the parallel colleges are covered by the definition clause, and consequently the charging provision, then the same is discriminatory and violative of Art. 14 of the Constitution, inasmuch as regular colleges affiliated to universities whether aided or self-financed rendering the same services are outside the scope of levy. - Held that: - levy of service-tax for services rendered by parallel colleges which indirectly falls on the students, but by simultaneously providing exemption to regular affiliated colleges allowing the students therein study free of tax is patently discriminatory and violative of Art. 14 of the. Constitution of India. Though the service-tax is, in the Union List, since education happens to be in the concurrent list and considering the encouraging policy of the State Government to improve the educational opportunities of the students in the State, wherefrom large number of educated people migrate outside the State and outside the country seeking employment, the view of the State Government was called for by this Court. After referring the matter to the Cabinet, the Under Secretary to Government has filed an affidavit in Court wherein he has stated that though the State is helpless in regard to levy of service-tax, the Government decided to bring to the notice of the Central Government the difficulties experienced by parallel colleges in the matter of service-tax. In the circumstances, it has to be assumed that the State Government is also in favour of exemption to the parallel colleges in the same way granted to regular colleges under the exemption in the definition clause. In view of the above findings, I hold that the impugned provisions of the Act authorising levy of service-tax on parallel colleges are arbitrary and violative of Art. 14 of the Constitution of India.
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