9911796707
TMI Blog2023 (10) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... e being disposed separately. 4. The petitioner in this writ petition is aggrieved by the Order in Original No.27 of 2019 (ST) dated 29.10.2019 passed by the first respondent and consequential recovery order dated 06.10.2020 bearing reference O.C.No.170 of 2020 of the second respondent. 5. By the impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019, the first respondent has confirmed a sum of Rs. 1,19,85,616/- towards service tax due from the petitioner. Apart from service tax, interest under Section 75 of the Finance Act, 1994 and penalty under Section 78 of the Finance Act have also been imposed on the petitioner vide impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019. 6. Operative portion of the impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019 passed by the first respondent reads as under:- ORDER I. I confirm the demand of Service tax of Rs. 1,19,85,616/- (inclusive of Cesses) (Rupees One crore nineteen lakhs eighty five thousand, six hundred and sixteen only) on the consideration received towards provision of Service of Affiliation/Recognition and Service of Renting of Immovable Property during the period from October 2013 to June 2017, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... daranar University vs. The Joint Director (GST Intelligence), Coimbatore, 2022 (58) G.S.T.L. 27 (Mad.), this Court has allowed the case of the petitioner therein except to the extent of renting of immovable property. 10. Like the Manonmaniam Sundaranar University, The Tamil Nadu Dr.MGR Medical University, Chennai and The Madurai Kamaraj University, the Petitioner is also providing services to various colleges seeking affiliation with it. Prior to affiliating colleges, the petitioner inspects the colleges and charge fees. At the time of renewal of the affiliation, the petitioner again inspects the colleges and charges a sum towards inspection for renewal of the existing affiliation. The petitioner also has immovable properties in its campus which have been rented out for various activities. 11. In all the three cases mentioned above, the Court has granted relief by holding that the service provided by the three above named Universities to their colleges, viz constituted colleges were not liable to tax under Finance Act, 1994. 12. The submission of the learned counsel for the petitioner is that the service provided by the petitioner falls within the purview of "negative list" in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 1994 as it stood with effect from 01.07.2012 up to its deletion on 14.05.2016. It is submitted that, the petitioner was thereafter eligible for exemption under the Mega Exemption Notification No.25 of 2012-S.T dated 20.06.2012 as amended from time to time. Hence, prayed for allowing the writ petition. 18. On behalf of the respondents, it was stated that the writ petition is devoid of merits and is therefore liable to be dismissed. It is submitted that the present writ petition was filed almost after a lapse of one year and eight days impugned on 21.10.2020 after the impugned Order-in-Original No.2 of 2019 (ST) was passed on 29.10.2019. 19. It is submitted that the writ petition is not maintainable in the light of the decision of the Hon'ble Supreme Court in Assistant Commissioner (CT) LTU, Kakinada &Ors. Vs. M/s. Glaxo Smith Kline Consumer Health Care Limited, 2020 (36) GSTL (305) SC. 20. A specific reference was made to paragraph 14 and 15, from the decision of the Hon'ble Supreme Court wherein it was held that even the Hon'ble Supreme Court cannot exercise its plenary power under Article 142 of the Constitution of India, extending the period of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal. 27. It is submitted that none of the amendment to the Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by the notification are relevant. 28. It is stated that earlier certain categories of services provided "to an educational institutions"or "by an educational institutions" were exempted from Service Tax. It is submitted that the service provided by the petitioner were however not exempted under the above notification. 29. It is submitted that vide Notification No.6/2014-S.T dated 11.07.2014, Entry No.9 of Notification No.25/2012-S.T dated 20.06.2012 was fully substituted. It is submitted that after Entry 9 of Notification No.25/2012-S.T dated 20.06.2012 was substituted with new Entry vide Notification No.6/2014-S.T dated 11.07.2014, renting of immovable property was deleted from the purview of exemption. Thus, the service provided towards affiliation or recognition to colleges or educational institution were not covered under the Mega Exemption Notification No.25/2012 S.T dated 20.06.2012 as amended from time to time. It is therefore submitted that the petitioner University was not eligible for exemption under the said Notification. 30. It is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. For, these decisions are premised on the logic that provision such as Section 31 of the 2005 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction - by overstepping or crossing the limits of jurisdiction including in flagrant disregard of law and rules of procedure or in violation of principles of natural justice, where no procedure is specified. The High Court may accede to such a challenge and can also non-suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. However, if the writ petitioner choses to approach the High Court after expiry of the maximum limitation period of 60 days prescribed under Section 31 of the 2005 Act, the High Court cannot disregard the statutory period for redressal of the grievance and enterta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.07.2014 (i)Services provided to or by an * educational institution in respect of education exempted from service tax, by way of,- (a)auxiliary educational services; or (b)renting of immovable property; (*substituted with the "provided to" vide Notification No. 3/2012-ST dated 1.3.2013.) Services provided,- a.............. b.to an educational institution, by way of .- i........... ii. ........ iii........... iv. services relating to admission to, or conduct of examination by, such institution; Definitions:- For the purpose of this notification, unless the context otherwise requires:- (oa)"educational institution" means an institution providing services specified in clause (l) of Section 66D of the Finance Ac, 1994 ( 32 of 1994) 37. The above definition of "education institution" in clause 2(oa) to Mega Exemption Notification in column II was further amended by Notification No.9 of 2016 S.T dated 01.03.2016 to read as under as Section 66D(l) was deleted vide Finance Act, 2016:- "2(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)Educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational 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 been inserted under mega notification referred to above, whereby, clause 9 has been inserted with effect from 11.07.2014, where, the services provided by the educational institution to its students, faculty and staff are mentioned. The word "students", that we can u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich 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 educational institution like the petitioner institution ie., the university to give affiliation can be an integral part of the educational services, being provided jointly, both by the University and the college. The college cannot independently function without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 W.P.(MD)No.20502 of 2019 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 educational institutions. The word "educational institution", cannot denote only the college affiliated to the university, but, it includes the university. As stated above, without the university, college cannot impart education on its own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 university cannot be assessed for demanding any service tax for the services of education provided by them, which includes affiliation or other services provided for the students, faculty as well as the staff of the university. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0)ELT 0363 S.C xv.Calcutta Jute Manufacturing Co. vs. Commercial Tax Officer, 1997(093) ELT 0657 S.C xvi.Mafatlal Industries Ltd., vs. Union of India, 1997(089) ELT 0247 S.C xvii.Aphali Pharmaceuticals Ltd. vs. State of Maharashtra, 1989(044) ELT 0613 S.C xviii.Shabian Abraham vs. Collector of Central Excise and Customs, 2017(050) STR 0241 S.C xix.M.P.Steel Corporation vs. Commissioner of Central Excise, 2017(050) STR 0205 S.C xx.Ranbaxy Laboratories Ltd vs. Union of India, 2012 (027) STR 0193 S.C 45. In Union of India vs.Wood Papers Limited, 1990 (47) ELT 500, the Hon'ble Supreme Court held that at the stage of applicability, the Notification has to be construed strictly and the ambit should not be widened or extended. It further held that once only when the first stage is crossed, the notification should be construed liberally that is other technicalities and procedural compliances should not come in the way of extending the benefit. There was no scope for expanding the scope of negative list in Section 66D(l) of the Finance Act, 1994 as the petitioner has not crossed the threshold. 46. The Central Board of Excise and Custom had also issued a Educational Guideline o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween 01.07.2012 until its deletion in 2016 vide Finance Act, 2016 (28 of 2016) dated 14.05.2016 and therefore not liable to tax under Section 66B of the Finance Act, 1994 cannot be countenanced. 50. The further case of the petitioner, that the petitioner was later exempted under Entry 9 to Mega exemption Notification No.25/2012-S.T. dated 20.06.2012 as amended from time to time also cannot be countenanced. I shall explain the position in the ensuing paragraphs. 51. The Hon'ble Supreme Court has repeatedly held that the operation of the notification has to be judged not by the object which the rule making authority had in mind but the words it has employed effectuate the legislative intend. Therefore, there is no scope for extending the benefit of Section 66 D(l)(ii) of the Finance Act, 1994 to the petitioner. 52. The Hon'ble Supreme Court in the case of A.V.Fernandez vs. State of Kerala, AIR 1957 SC 657 while construing taxability held that no doubt it is true that while construing a fiscal statues and in determining the liability of a subject to tax, one must have regard to the strict letter of the law and not merely to the spirit of the statute or the strict letter of the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66B of the Finance Act, 1994, service tax was to be levied at the rate specified therein on the value of "services" other than the services specified in the "negative list" provided or agreed to be provided in the taxable territory by one person to another and concluded in as much as the manner as may be prescribed. 58. Section 66D(l) of the Finance Act, 1994 was introduced in 2012 vide Finance Act, 2012. Prior to its deletion vide Finance Act, 2016 (28 of 2016), Section 66D(l) of the Finance Act, 1994, read as under:- "Section 66D.Negative List of Services*. The negative list of services shall comprise of the following services, namely:- (l) 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 recognized by any law for the time being in force; iii.education as a part of an approved vocational education course." Note : (*Omitted by Finance Act, 2016 (28 of 2016), dated 14.05.2016.)" 59. The above provision is unambiguous and clear. There is no scope for expanding the scope of exemption by applying and invoking the Rules of Interpretation. 60. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joint Director (GST Intelligence), Coimbatore referred to supra require reconsideration. 67. I shall now turn may attention to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. To avail the benefit of Mega Exemption Notification No.25/2012-ST dated 20.06.2012, the petitioner should have during the period in dispute, satisfied the requirements of the conditions stipulated therein. 68. Once again, the decision of the Kings Bench Division in Cape Brandy Syndicate vs. IRC (1921)1 KB 64 is to be kept in mind wherein it was held "In taxing statute one has to look merely at what is clearly said. There is no room for intendment. There is no equity about tax. There is no presumption as to tax. Nothing is to read in, nothing is to be implied. One can only look fairly at the languages used. Statute has to be read plainly." 69. To be eligible for exemption under Entry 9 of Mega Exemption Notification No.25/2012-S.T. Dated 20.06.2012, the service provided by the petitioner to "educational institution" should have been specified in it. 70. At the time of inception with effect from 1.7.2012, Entry 9 to Mega Exemption Notification No.25/2012-S.T. dated 20.06.2012 read as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Exemption No.25/2012- S.T dated 20.06.2012, clause 2(f) can be dissected and understood follows:- as any services provided whether to the students or the faculty, relating to, or, any other services which educational institutions:- i) imparting any skill, or ordinarily carry out themselves, but may obtain as outsourced services from any other person, ii) knowledge, or including services relating to admission to such institution, conduct of examination, iii)education; or catering for the students under any mid-day meals scheme sponsored by Government, or iv)development of course content; transportation of students faculty or staff of such institution. v) any other knowledge - enhancement activity 77. In the Educational Guideline issued after the Finance Act, 1994 was amended by Finance Act, 2012, the Central Board of Excise and Custom it was clarified that certain services provided to or by educational institutions are separately exempted under the mega- notification namely:- (a) auxiliary educational services; or (b) renting of immovable property 78. In paragraph 4.12.6 of The Educational Guide, it was clarified as under :- 4.12.6 What are auxiliary ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCR 629] . It is a well-settled principle of interpretation that courts in construing a statute will give much weight to the interpretation put upon it at the time of its enactment and since, by those whose duty has been to construe, execute and apply the same enactment." (See also in Karnataka Small Scale Industries Development Corpn. Ltd. v. CIT [(2003) 7 SCC 224 : 2002 Supp (4) SCR 453] SCR at p. 460.)". 83. In Francis Bennion Statutory Interpretation, 4th Edition, it was stated as follows in 596 :- "Section 231. The basic rule. - In the period immediately following its enactment, the history of how an enactment is understood forms part of the contemporanea expositio, and may be held to throw light on the legislative intention. The later history may, under the doctrine that an ongoing Act is always speaking, indicate how the enactment is regarded in the light of developments from time to time. COMMENT On a superficial view, it may be though that nothing that happens after an Act is passed can affect the legislative intention at the time it was passed. This overlooks the two factors stated in this section. Contemporanea expositio. The concept of legislative intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is exemption stood withdrawn in view of amendment to Entry 9 to Mega Exemption No.25/2012-S.T dated 20.06.2012 vide Notification No. 3/2013-S.T, dated 1-3-2013. 90. With effect from 1.4.2013, the expression "provided to or by" was substituted with the expression "provided to" in Entry 9 to Mega Exemption No.25/2012-S.T dated 20.06.2012 vide Notification No.3/2013-S.T dated 1-3-2013. Therefore, with effect from 1.4.2019, perforce, the petitioner would have been liable to pay service tax for renting of its immovable property to various persons. Renting of immovable property by the petitioner was no longer exempted in view of above amendment. 91. The amendment in Notification No.6/2014-S.T.dated 11.07.2014 completely changed the complexion of Mega Exemption Notification No.25/2012-S.T. dated 20.06.2012. 92. Notification No.6/2014-S.T.dated 11.07.2014 introduced a new definition of "educational institutions" in definition Clause 2(oa) as mentioned above. Exemption to "auxiliary service" and renting of " immovable property" as it stood at the inception with effect from 01.07.2012 in Mega Exemption Notification No.25/2012 - S.T dated 20.06.2012 was deleted. The definition of "auxiliar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-ST dated 20.06.2012 vide Notification No.9/2016-S.T dated 01.03.2016. The definition clause 2(oa) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 thus read as under:- "2(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 recognized by any law for the time being in force; (iii)Education as a part of an approved vocational education course." The said amendment however did not alter the above position. It did not allow any scope for conferring any exemption to the petitioner for amount charged towards affiliation and renewal of affiliation. 98. The definition of "educational institution" in clause 2(oa) merely amended by Notification No.9/2016-S.T dated 01.03.2016 as Section 66D of the Finance Act, 1994 itself stood omitted by Finance Act, 2016 (28 of 2016) dated 14.05.2016. 99. The amended definition of "educational institution" in definition clause 2(oa) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 merely incorporated the ingredient of Section 66 D(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al institution" is to be interpreted assuming there is an ambiguity in the language, in Entry 9(b) (iv) of Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 it has to be interpreted by applying the principle of " Nosciter - a sociss". In the Prabhudas Damodar Kotecha v. Manhabala Jeram Damodar, (2013) 15 SCC 358 the Hon'ble Supreme Court held that the principle of nocitur a sociis, which provides that words must take colour from words with which they are associated. If the principle of " Nosciter - a sociss" meaning of the expression in Entry 9(b)(iv) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 has to be interpreted from the meaning of other clauses in Entry 9(b) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. Therefore, the even if the above principle is applied, it has to construed, the there was no scope for construing the exemption in favour of the petitioner. 104. Only such services provided to " educational institutions" were exempted from payment of service tax under Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. Merely, because " "educational institutions" impart education as a part of a curriculum for obtaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertical carried by the petitioner which is a "service" not exempted and is therefore liable to service tax. Even otherwise, there is no scope for telescoping the benefit of Section 66D(l)(ii) of Finance Act, 1994 into Entry No.9 of Mega Exemption Notification No.25/2012-ST dated 20.06.2012 as amended by Notification No.9 of 2016-S.T dated 01.03.2016 and Notification No.6/2014-S.T dated 11.07.2014. Thus, there is no scope for conferring exemption which is not available to the petitioner. 109. The affiliation work and the charges collected and similar amounts collected for renewal of affiliation cannot be said to service provided in relation to relating to admission to, or conduct of examination by, such institution. 110. Services provided by the petitioner to "educational institution" viz., "constituent colleges" were neither in the contemplation of Section 66D (l)(ii) of the Finance Act, 1994 nor under Notification No.9 of 2016- S.T dated 01.03.2016 as amended from time to time. Unless such services were in relation to admission to " Educational Institution" for, conduct of examination by, such " Educational Institution" such service cannot be equated with activity of affiliation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to supra as mentioned above would require a reconsideration as there is no scope for interpretation when the language in the Notification was clear. There was also no scope for merging to exclusion and exemption together. 116. In view of the above discussion, this writ petition has to fail, on all counts except, for "renting of immovable property" for a brief period between 01.07.2012 and 31.03.2013. The said exemption is not available with effect from 01.04.2013 in view of amendment to vide Notification No.3/2013-ST dated 01.03.2013 amending Mega Exemption Notification No.25/2012 - ST dated 20/06/2012. 117. After 1.4.2013, only if the petitioner had rented out its immovable property by to an " Educational Institution". After amended to Mega Exemption Notification No.25/2012 - ST dated 20/06/2012, vide Notification No.6/2014-S.T dated 11.07.2014, there was no exemption for renting of "immovable property" 118. Since the decision of the learned Single Judge in the case of Madurai Kamaraj University vs. Joint Commissioner, Office of the Commissioner of GST and Central Excise, Madurai is pending appeal before the Hon'ble Division Bench, liberty is given to the petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
