University writ on service tax fails; exemptions under Section 66D(ii), Section 66B and Notification 25/2012-ST denied

HC dismissed the petitioner-university's writ challenging service tax liability, holding that its services did not fall within the negative list under Section 66D(l)(ii) of the Finance Act, 1994 and that the Mega Exemption Notification No. 25/2012-ST must be strictly construed at the applicability stage. The court rejected the claim that the university was outside the service tax net under Section 66B, except for a limited period exemption on renting of immovable property as an educational institution between 01.07.2012 and 31.03.2013. The exemption for renting stood withdrawn from 01.04.2013 by subsequent amendments, and no further benefit was available. The petition was dismissed.

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Issues Involved:
1. Validity of the impugned Order-in-Original confirming service tax and penalties.
2. Applicability of Section 66D(l)(ii) of the Finance Act, 1994.
3. Applicability of Mega Exemption Notification No.25/2012-ST dated 20.06.2012.
4. Maintainability of the writ petition due to limitation.

Summary:

Issue 1: Validity of the Impugned Order-in-Original
The petitioner challenged the Order-in-Original No.27 of 2019 (ST) dated 29.10.2019, which confirmed a service tax demand of Rs. 1,19,85,616/- along with interest and penalties under Sections 75 and 78 of the Finance Act, 1994. The consequential recovery order dated 06.10.2020 was also contested.

Issue 2: Applicability of Section 66D(l)(ii) of the Finance Act, 1994
The petitioner argued that the services provided fell within the "negative list" under Section 66D(l)(ii) of the Finance Act, 1994, and were thus exempt from service tax. The court, however, held that the services provided by the petitioner, such as affiliation and renewal of affiliation, did not fall within the purview of "education as a part of a curriculum for obtaining a qualification recognized by law." The court emphasized that the language of Section 66D(l) was plain and unambiguous, leaving no room for interpretation.

Issue 3: Applicability of Mega Exemption Notification No.25/2012-ST dated 20.06.2012
The petitioner contended that the services were exempt under the Mega Exemption Notification. The court examined the amendments to the notification and concluded that the services provided by the petitioner did not qualify as "auxiliary educational services" or services related to admission or conduct of examination by an educational institution. The court noted that the exemption for renting of immovable property was only applicable until 01.04.2013, after which it was withdrawn by subsequent amendments.

Issue 4: Maintainability of the Writ Petition Due to Limitation
The court noted that the writ petition was filed after the statutory period of limitation had expired. Citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. M/s. Glaxo Smith Kline Consumer Health Care Limited, the court held that it could not entertain the writ petition as it was filed beyond the maximum limitation period prescribed under the Act.

Conclusion:
The writ petition was dismissed on all counts except for the exemption related to renting of immovable property for the period between 01.07.2012 and 01.03.2013. The petitioner was granted liberty to file a statutory appeal before the first Appellate Authority within thirty days, with the condition to pre-deposit the service tax demanded, except for the exempted period. The Appellate Authority was directed to await the decision of the Division Bench in the appeal pending against the decision of the learned Single Judge in a similar case. No costs were awarded, and connected miscellaneous petitions were closed.

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