TMI Blog2021 (9) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... r conducting an examination is primarily a job of the university and the colleges affiliated to the university are only facilitators. Therefore, examinations are not conducted directly by the colleges, it is being conducted by the university, but the facilitator is the college. Therefore, the word conduct of examination by such institution means, conduct of examination by the university and the college and not by the college alone. The examination is the examination of the university, for which, facilitation is given by the college, wherein the examinations are conducted and ultimately, valuation is to be done by the university and marks are awarded and degree is conferred by the university. It is the university, where, the facilitator is the college, where, the examination is being taken place and therefore, the word conduct of examination , cannot have such a narrow and pedantic interpretation. Throughout the regime between 2012 and 2017, the educational institution had been provided with the exemption as has been stated in various provisions of the Act as well as the mega notification, followed by the amended notification and during all these periods, these institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating University. To understand the purpose for which the petitioner university was established and the main function and powers of the university, the following provisions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the functions of that office as such member; or (B) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (C) the duties performed by any person as a Chairperson or a Member or a Director in 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 carry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vels of education from pre-school level to college level, which include the part of curriculum for obtaining a qualification recognised by any law, that means, any qualification like UG degree, PG degree, Diploma or Post Graduate, professional degree and also vocational course degrees or certificates are all exempted, since they are being part of negative 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 educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and also education as a part of an approved vocational education course. In order to appreciate the same, the relevant clause (oa) under Notification No.9 of 2016 is extracted hereunder: for clause (oa), the following shall be substituted with effect from such date on which the Finance Bill, 2016, receives assent of the President of India, namely:- (oa) educational institution means an institution providing services 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue against the petitioner university is bad in law and therefore, in this context, a challenge has been made as to the action taken by the respondent revenue to issue show cause notice F.No.IN/DGGI/CoZU/M/39/2018 dated 23.10.2018, followed by the order dated 30.05.2019, confirming the proposal made in the show cause notice and demanding service tax for the said period. This is how this writ petition has come up with the aforementioned prayer. 3. In support of 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 qual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions and therefore, the impugned order is liable to be set aside, he contended. 3.6. Expanding further on his arguments, learned Counsel would also submit that, though in this context a similar university of the State of Tamil Nadu has already approached this Court and filed a writ petition seeking such a relief in W.P.(MD)No.12879 of 2019, a learned Judge of this Court by order dated 22.02.2021, though had accepted the claim made by the petitioner university in that case insofar as the exemption for 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as an exempted area within the meaning of Section 66-D 'l' and subsequently the mega notification and notification No.9 of 2016. Therefore, for the whole period between 01.04.2013 and 30.07.2017, the petitioner is not liable to pay any service tax as demanded and therefore, he contended that, the impugned order in entirety shall be interfered with. 4. Per contra, Mr.K.Prahu, learned Standing Counsel appearing for the respondent revenue has made submissions stating that, insofar as the exemption provided under Section 66-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices provided by the university, insofar as granting affiliation, conducting inspection etc., are not the services covered under the exemption clause and therefore, such kind of services can never be treated as exempted services from the purview of the service tax and also under the purview of the Central GST Act, thus such an advance ruling has already been given by the authority in the said order. 8. Relying upon heavily on the said order of the Advance Ruling Authority, learned Counsel would contend that, since the ruling has come, where the issue 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 universit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categories of services by educational institutions. One is pre-school to higher secondary education service, second is education as a part of curriculum for obtaining a qualification recognised by law for the time being in force and the third one is education as a part of an approved vocational course. This Court feels that, sub-clause 2 of Clause 'l' of Section 66-D is relevant for the present issue, the reason being that, whatever be the education as a part of curriculum for obtaining a qualification recognised by law for the time being in force means whatever be the Degree, Diploma, PG diploma, 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 curr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the revenue is nothing but the institution which impart education and conduct examination ie., affiliated college and not the university. But, in the considered view of this Court, that kind of interpretation is not possible, in view of the expanded meaning that has been given and the explanation given, which shows the intention of the Central Government who issued the mega exemption notification, under which, we can understand that, what are all the allied services that shall form part of the educational services, which may be services provided to the staff, services provided to the faculty, expanded services like transportation, 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e colleges, it is being conducted by the university, but the facilitator is the college. Therefore, the word conduct of examination by such institution means, conduct of examination by the university and the college and not by the college alone. The examination is the examination of the university, for which, facilitation is given by the college, wherein the examinations are conducted and ultimately, valuation is to be done by the university and marks are awarded and degree is conferred by the university. Therefore, it is the university, where, the facilitator is the college, where, the examination is being taken place and therefore, the word 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 opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des the services to be provided not only to the students, but also faculty and staff. In this category, the faculty and staff of the university are getting whatsoever services by way of transportation, boarding and lodging etc., are also to be included in the meaning educational services being provided by the educational institutions ie., the petitioner herein which can also be exempted from the purview of service tax. Therefore, that aspect of assessment and demand made for levying service tax on the services provided by the petitioner institution under the heading renting of immovable property also, in the considered view of this Court, cannot be sustained. Therefore, 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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