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TMI Blog2019 (12) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA. BRIEF FACTS OF THE CASE 1. The Constitution of India, though promised, the implementation of the effective health delivery system to the rural masses in general and unprivileged in particular. The Government of India, after setting up several Committees, had decided to involve the NGO's in establishing such Medical Institute as a "Joint Venture" with the participation of State Government, which can produce the qualified and trained Doctors, who are willing to go and settle down in rural areas and thus the promise given in this direction can be fulfilled and in order to materialise this, the proposals were invited from the NGOs. 2. In response to Government of India's Initiatives to fulfil its constitutional obligations which is followed by the offer, the Kasturba Health Society (hereinafter referred to as "Appellant Society" emerged as Charitable Institution by way of Registration Under the Societies Registration Act, 1860 vide registration No.95/64(Wardha) and also under The Bombay Public Trust Act, 1950 vide registration No.F-87 (W) on 11th Day of September 1964, with the sole objective of attending the health needs of rur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Voluntary Registration and as a result got registered with GSTN having registration No. 27AAATK2046G1ZV with effect from 21st July 2017. 7. Though the appellant society got registered voluntarily under GST Act for the reasons mentioned above, it had not filed any returns till March 2019, since none of the activity was in the nature of "business" so as to fall within the meaning of "supply" as provided in section 2(87) of the GST Act and hence, it bonafidely believed that it is not obliged to comply with the provisions of GST Act. Then, the jurisdictional GST authorities have issued one after other notices to the appellant society for adhering to the compliance along with an obligation of filing of returns and therefore the appellant institution enquired with other Institutions, those who are having engaged in similar activity. Where, it is learnt that none of them is registered under GST act and further learnt that those who have attempted to register, had also applied for the cancellation of registration, which is duly cancelled by the jurisdictional GST authorities after considering their nature of activity. Thereafter on legal advice, the appellant had decided to thrash ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Doppler, Angiography, Gastroscopy, Sonography during the course of diagnosis and treatment of disease would fall within the meaning of "composite supply" qualifying for exemption under the category of "educational and/or health care services." c. Whether the nominal charges received from patients (who is an essential clinical materials for education laboratory) towards an "Unparallel Health Insurance Scheme" to retain their flow at one end for the purpose of imparting medical education as a result to provide them the benefit of concessional rates for investigations and treatment at other end would fall within the meaning of "supply" eligible for exemption under the category of "Educational and/or Health Care Services." d. Whether the nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, Refreshment etc. which are support activities for attainment of main activities and further amount received on account of disposal of wastage would fall within the meaning of "supply" qualifying for exemption under the category of "educational and/or health care services." 9. The Hon'ble Advance Ruling Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Maharashtra Goods and Services Act 2017 is bad in law in treating that the Kasturba Heath Society does not satisfy the Criterion of "Educational Institution " and thus holding it liable to be registered Under the GST Act 2017, is concerned. 13. The Hon'ble Advance Ruling Authority has failed to bring the cognizable material on record in support of its contention that Kasturba Heath Society does not satisfy the Criterion of "Educational Institution "and thus erred on facts and in law in treating that the appellant doesn't not provide any services. 14. The Hon'ble Advance Ruling Authority has erred in not answering the questions No (iii) a to (iii) d raised before it, as not maintainable by misdirecting itself and further erred in law by holding that the Mahatma Gandhi Institute of Medical Sciences since having not made any application for Advance Ruling, the further conclusion that application is not maintainable, is also perverse in law. 15. The Hon'ble Advance Ruling Authority since not raised the issue of Separate Legal Entity neither at the time Admission of Application nor during the Final Hearing and as such the conclusion drawn by it is without providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered under The Societies Registration Act, 1860. Even after coming federal state of Government in India the provision of said Act instead of repealing, is being implemented by every State Government as well as Central Government duly supplemented by the Rules for monitoring and regulating, the institutions engaged into carrying out the Educational and Medical activity. The Society registered under this Act is only a legal entity which can sue and to be sued for each and every official matter/activity and thus there is no separate or an independence existence of the Society from it's any one or more activities. In order to have more monitoring and control over the affairs in the larger Public Interest the registered Society, further, automatically gets registered under The Bombay Public Trust Act, 1950. 18.2 The matter already gone on record that the Kasturba Health Society (here-in-after referred as "KHS") is registered under The Societies Registration Act 1860 and also under The Bombay Public Trust Act, 1950 for the purpose of delivery of Medical Education for Rural Health Care. The known Gandhian followers and Medical Personnel such as Dr. Sushila Nair, Dr. Jivaraj Mehta, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by KHS only. The finances necessary for day to day activities are provided by the KHS and all the required infrastructure and facility such as land, building, roads, power supply, water supply, have been owned and provided by KHS right from inception of the MGIMS. In other word words MGIMS does not have an independent existence than of KHS and for that reason by no stretch of imagination or by any scale it can be held that the Kasturba Health Society and MGIMS are separate and distinct person as held by advance ruling authority of Maharashtra State in its order dated 04-05-2019. 18.6 This contention of the appellant shall find support from the ratio laid down by the Apex Court in the case of M/s. Queen's Educational Society v/s Commissioner of Income Tax decided on 16 March, 2015 in Civil Appeal NO.5167 OF 2008 = 2015 (3) TMI 619 - SUPREME COURT to the effect that an educational society, running an educational institution solely for educational purposes. It was further held that if, in substance and reality, the sole purpose for which the assessee has come into existence is to impart education at the level of colleges and schools, such an educational society should be regarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at MGIMS. (Annexure-X). * The RTO authorities have registered Ambulance, vehicles, plied for the purpose of MGIMS are registered in the name of KHS only. (Annexure-XI). Other Evidences * The MGIMS is functioning within the framework set forth by the constitution of KHS is titled as "Memorandum of Association" and "Rules and Regulations "and as such there is no separate documents endorsed by Law formed for regulating the function of MGIMS or anybody claiming through it. (Annexure-XII) * For the reason that KHS is sole legal entity as responsible and answerable for every operational impact of MGIMS, the registration under the provisions of Goods and Services Tax Act 2017 is obtained in the name of KHS and as such all those transaction concerning and touching to MGIMS are being regularly reported in the name of KHS as much as the liability under the GST is concerned. (Annexure-XIII) In the context of above described factual matrix and applicable principle of laws there remains hardly any room to allege that KHS and MGIMS are separate and distinct person and working independently and therefore the conclusion drawn by the honorable advance ruling authority is not only complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. In fact the appellants registered under the Goods and Services Tax Act 2017 and is liable for all consequences and penal actions under said act and further concerned about the issues those have arisen and as such the application made by it is well within the competency of section 97 of the CGST /SGST Act 2017, and accordingly, the Hon'ble Advance Ruling Authority was duty bound to answer the questions raised by the appellant and thus not answering the same merely on the self-imagination that the appellant and MGIMS are separate and distinct entity is completely departure from the obligation cast upon it in the words, spirit and the mandate of section 97 of the said act. In view of this fact, the appellate authority is requested to answer the question raised by the appellant. 22. Ground-5:- The Hon'ble Advance Ruling Authority since not raised the issue of Separate legal Entity neither at the time of Admission of Application nor during the Final Hearing and as such the conclusion drawn by it is without providing an opportunity to the Appellant to convey its own stand and as such the order passed by it is against the principles of natural justice and as a result is Bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of 30 days allowed under the proviso to sub-section 2 of section 100 of the CGST Act, 2017. 25. We do find merit in the grounds put forth by the Appellant with regard to the condonation of delay of 26 days, caused in filing the present appeal. Therefore, we are satisfied to the extent that the appellant was prevented by a sufficient cause from presenting the appeal within period of thirty days from the receipt of the impugned ruling of AAR, and accordingly allow the appellant to present the appeal within a further period of 30 days in terms of proviso to sub section 2 of section 100 of the CGST Act 2017. 26. We have gone through the entire case records encompassing the facts of the case, documents placed on the record, and the submissions made by the Appellant. We have also gone through the impugned Advance Ruling order, wherein it was, inter-alia, held by the Advance Ruling Authority that Appellant, i.e. Kasturba Health Society, and MGIMS, the medical college run by the Appellant, are two separate entities, and since all the charitable and educational activities are carried out by M/s. MGIMS, and not by the Appellant, therefore, the Appellant, i.e. M/s. Kasturba Health Soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers nominated from the Appellant Society are separate entities/persons having their own role and functions. Thus, we completely agree with the AAR findings in this regard, who also observed the above said facts, and accordingly, inferred that the Appellant society and M/s. MGIMS are two separate and independent persons in so far as the GST law is concerned. We also agree with the AAR observation, wherein they held that it is MGIMS, which is undertaking the supply of the providing medical education and health care services, and not the Appellant society. Thus, MGIMS and the Appellant Society are two separate establishment. 29. The above findings also find support from the judicial pronouncements cited by the Appellant in their advance ruling application filed before AAR, wherein they have cited the judgment passed by the Hon'ble Bombay High Court, Nagpur Bench in the case of Ajay Gambhir & Ors. Vs. Dean, Mahatma Gandhi Institute of Medical Sciences, Sevagram, & Ors., 1985 = 1985 (3) TMI 314 - BOMBAY HIGH COURT, wherein the Hon'ble High Court in para 11 observed as under: "Thus, we see no difficulty whatsoever in holding that Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the Central Government and the State Government, which clearly indicates that not the entire control of the institute is vested with the Appellant society. Thus, the above contention of the Appellant is fallacious, and therefore, is not tenable. 33. It is inter alia further submitted by the Appellant that the said project of Medical Education for rural masses is brought in to existence on the principle of public private partnership in which KHS was considered as parent and legal entity and the project is titled as "Mahatma Gandhi Institute of Medical Sciences" (Referred to as MGIMS) as would be evident from the Notification issued by Govt. of India on 28th February 1976. The above submission made by the Appellant further underpins our findings that MGIMS, which as per the Appellant themselves, is a public private partnership, is separate establishment from KHS, the Appellant society. Thus, the above submissions made by the Appellant proved to be adverse for their own cause, as the same is corroborating the findings made by us, and hence, is not tenable. 34. It is inter alia further submitted by the Appellant that all the technical-nontechnical staff working for the implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany is controlled and managed by its parent/holding company, it does not preclude it from being the separate entity/establishment from the parent/holding company, as the subsidiary companies may undertake different and independent functions or role than those of the parent/holding company, thereby rendering the same as distinct persons in terms of the provisions of section 25 of the CGST Act, 2017. Same is the case with various branches of any company, which will be treated as distinct persons in terms of the GST law. Therefore, the above submissions made by the Appellant is not tenable. 36. The Appellant have referred to the ratio laid down by the Apex Court in the case of M/s. Queen's Educational Society v/s Commissioner of Income Tax decided on 16 March, 2015 in Civil Appeal No.5167 OF 2008 = 2015 (3) TMI 619 - SUPREME COURT and Aditanar Educational Institution Vs. Additional Commissioner of Income Tax, II 1997 224 ITR 310 (SC) = 1997 (2) TMI 3 - SUPREME COURT, wherein the Hon'ble Apex Court held that Educational institutions, which are registered as a society, would continue to retain their character as such. Relying upon the above cited judgment, the Appellant conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrency the registration granted under FCRA in the name of KHS alone and the transaction of MGIMS are not required to report separately, the ownership and title of the land on which MGIMS is functioning also in the name of KHS. 39. It is opined that the above documentary evidences relied upon by the Appellant do not detract MGIMS from the fact that it is MGIMS, which is affiliated with the State Universities and monitored, controlled and regulated by the Medical Council of India. The role of the Appellant society is merely as the caretaker of the said medical institute, which is responsible for its management and administration as per the agreements entered by the Appellant Society with the Central Governments and State Government of Maharashtra. Thus, the core function of providing the medical institution is carried out by MGIMS, and not by the Appellant Society. This adequately proves its separate and independent existence as distinct entity from the Appellant Society. 40. We have also considered the other grounds put forth by the Appellant in their defense. However, the same do not lend any support to the Appellant's contention, hence we would not like to belobour on those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant but same is related to the medical institute, i.e., MGIMS. (iii)(b) Whether the cost of Medicines and Consumables recovered from OPD patients along with nominal charges collected for Diagnosing by the pathological investigations, other investigation such as CT-Scan, MRI, Colour Doppler, Angiography, Gastroscopy, Sonography during the course of diagnosis and treatment of disease would fall within the meaning of "composite supply" qualifying for exemption under the category of "educational and/or health care services." Ans: - The above question is not maintainable in terms of the Clause (a) of section 95 of the CGST Act, 2017, as the transaction with respect to which the Appellant has asked the question, is not pertaining to the Appellant. (iii)(c) Whether the nominal charges received from patients (who is an essential clinical materials for education laboratory) towards an "Unparallel Health Insurance Scheme" to retain their flow at one end for the purpose of imparting medical education as a result to provide them the benefit of concessional rates for investigations and treatment at other end would fall within the meaning of "supply" eligible for exemption under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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