TaxTMI 
TaxTMI 
2005 (8) TMI 336
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....artment demanding registration under s. 69 of the Act and payment of service-tax under s. 66 r/w s. 65(105)(zzc) of the Act are also under challenge on the ground that the same are unauthorised, discriminatory, and hence violative of Art. 14 of the Constitution of India. I have heard Sri M.K. Damodaran, senior counsel and other counsel appearing for the petitioners, and Sri John Varghese, Addl. Solicitor General of India, appearing for the respondents. There is no need to go into the facts of every individual case or the details of notices issued, because the services rendered by the petitioners are the same and notices issued are of the same pattern either demanding registration or payment of service-tax on the charges received by the parallel colleges for the services rendered by them. The Supreme Court vide judgment in Tamil Nadu Kalyana Mandapam Association vs. Union of India and Ors. (2004) 188 CTR (SC) 297 : (2004) 167 ELT 3 (SC) and Division Bench of this Court in All Kerala Chartered Accountants Association vs. Union of India and Ors. (2002) 176 CTR (Ker) 268 : ILR (2002) 1 Ker 547 upheld the constitutional validity of some other charging provisions of the Act. Though the a....
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....o protect educational institutions as charity includes education also. If education is run on business lines, then solution is to amend s. 11 and other relevant provisions of the IT Act withdrawing the exemptions to institutions and Government can simultaneously provide financial aid to beneficiaries which will put an end to misuse of income-tax provisions. Therefore I do not think the levy of service-tax on students will serve the purpose of disciplining those who make business out of education. Tax on education, particularly when the incidence of tax is passed on to the beneficiaries, that is, the students, is a regressive legislation and has to be condemned, more so, when large number of poor people seek salvation through education and employment. However, the question is whether this Court is free to interfere with legislative policy and strike down the taxing provision supported by a specific constitutional entry on the ground that it is against the spirit of the Constitution laid down in the Directive Principles mentioned above. The Supreme Court has repeatedly stated that Courts while examining constitutional validity should not substitute judicial wisdom in the place of the....
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...." means any institute or establishment providing commercial or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. Even though petitioners have referred to the dictionary meaning of "commercial training" and contended that imparting of coaching by them to students to write various university degree examinations such as B.A., B. Com., M.A., M. Com., etc., do not come within the meaning of "commercial training". I do not think the said argument can be accepted because, on going through sub-cl. (27) of s. 65 it is clear that coaching in any form for imparting knowledge or skill or lessons on any subject or field, except the subjects specifically excluded by the said definition clause are covered by it. In fact, the institutions excluded are those imparting coaching or training in sports, pre-school coaching and training centres and i....
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.... a "course-study", which requires minimum attendance in lecture classes and practical training in an affiliated college or institution. The distinction between the petitioners and the affiliated colleges is that only affiliated colleges and institutions can conduct course-study wherever required to qualify the students to write the university examination. Students studying in the parallel colleges are private students who are taking private coaching in subjects where course-study is not required under the examination regulations of the university to write the examinations. Such courses are in subjects in humanities, language, commerce, etc., where students attending parallel colleges are free to write examination as private students without the need to complete any course-study. In other words, students trained by the petitioners in the parallel colleges are otherwise eligible to write examinations just by registration with the university without any need to undergo any course-study anywhere. of course, regular affiliated colleges are also imparting education in same subjects where course-study is not required to write the university examinations. However, those colleges are conduc....
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....ative of Art. 14 of the Constitution of India, the effect of levy has to be gone into. Counsel for the petitioners rightly contended that there is no provision in the Act prohibiting collection of service-tax and service-provider is, therefore, entitled to collect service-tax which in this case is from the students. Even if prohibition is introduced against collection of service-tax, fee has to be increased without which the heavy burden of 10 per cent tax cannot be paid is the case of the petitioners. In either case, the burden of service-tax on education falls on the student community. It is in this context that the validity of the provision has to be considered with reference to Art. 14 of the Constitution of India. As already stated, students studying in the parallel colleges are students who are entitled to write the university examinations as private students. The curriculum prescribed for the examination and the degree certificate awarded to private students and students studying in regular colleges, whether aided or self-financed affiliated to university, are the same. Therefore there is no distinction between the two classes of students namely, the students studying in the....
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....ut that those who start parallel colleges are mostly those who by virtue of their weak financial position are not able to secure jobs in regular colleges and they employ equally unfortunate ones as members of teaching staff. In other words, there may not be any qualitative difference in the coaching rendered in parallel colleges and in regular colleges. Even though counsel for the respondents submitted that by virtue of notification fixing the threshold limit of Rs. 4 lakhs turnover for attracting service-tax liability only big institutions are liable, I do not think any distinction can be drawn among parallel colleges based on turnover because, the burden of service-tax on the parallel colleges will have to be borne by the students, and the validity of charging section has to be tested against Art. 14 of the Constitution with reference to its effect on the beneficiaries, that is the students. In view of the findings above, I find no distinction between students undergoing private study in parallel colleges and those undergoing study in affiliated colleges whether aided or self-financed in the same subjects for writing the same examinations. Therefore levy of service-tax for servic....