2022 (8) TMI 707

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....penalty / fine for delayed payment from Colleges affiliated to it and also rents from certain buildings rented out by it. 2. Respondent No.1 has issued a show cause notice proposing to levy service tax on the affiliation fees, penalty / fine for delayed payment from Colleges affiliated to it and also rents from certain buildings rented out by it. Aggrieved by the same, the instant writ petition is filed. 3. In the writ petition, the petitioner has challenged several provisions of Finance Act, 1994 (for short hereinafter referred to as 'Act') and the notifications issued thereunder along with the impugned show cause notice dated 20.04.2018 bearing No. SCN Sl.No.22/2018-19 vide Annexure-'C' and also Statement of Demand dated 28.02.2019 ....

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....private Institutions by affiliating the same. 6. It is further submitted that what is under challenge is only the show cause notice and the petitioner is required to answer the same instead of approaching this Court. On the said ground, it is prayed that the writ petition be dismissed. 7. By way of the impugned show cause notice, the respondents have sought to impose service tax on the petitioner - University for the affiliation fee collected by it during the academic year - 2012-2013 to 2016-2017. As per the Act, the negative list of services which are not chargeable to service tax is contained in Section 66D and Clause(l) of Section 66D of the Act. Clause (l) of Section 66D reads as under:- "(l) Services by way of-....

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....nance Act, 1994 by placing the said activity under exemption list.   10. It is not the case of the respondents that the consideration received towards the educational activity is taxable for service tax. It is their case that affiliation fee collected by the petitioner - University cannot be considered as a consideration for providing educational services. 11. As already stated above, the act of University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the respondents to consider otherwise is erroneous. 12. The case of the petitioner is that it is not in real estate business and certain buildings are let out by it to carry on certain acti....

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....ct and the rent received also deserves to be exempted once the activity of providing education by the petitioner - Institution is exempted from service tax. 15. The only question that arises for consideration is whether the petitioner is liable to pay the service tax on the rent received by it from the buildings let out by it. 16. Normally, a person is bound to reply to the show cause notice issued by the Authority and it is not appropriate for him to approach the Court without doing the same. However, in the instant case, the dispute does not pertain to quantification of service tax, but whether the respondents - Authorities have jurisdiction to demand service tax for the activity of petitioner - University in providing education. Fu....