TaxTMI 
TaxTMI 
2025 (12) TMI 314
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....or the reasons stated in the grounds. (B) Issue a writ of certiorari or any other writ or direction or order to quash the impugned show cause notice bearing number no. CTO(ENF)GKK/2023-24/B-228 for the period 2018-19 issued by the Respondent No. 1 enclosed as Annexure B. (C) Issue a writ of certiorari or any other writ or direction or order to declare Notification No. 13/2022-CT dated 5.07.2022, issued by Respondent No. 2, enclosed as Annexure C, as ultra-vires Section 168A of CGST Act, 2017 for the reasons stated in the grounds. (D) Issue a writ of certiorari or any other writ or direction or order to declare Notification No. 9/2023-CT dated 31 March 2023, issued by Respondent No. 2, enclosed as Annexure C1, as ultra-vires Section 168A of CGST Act, 2017 for the reasons stated in the grounds. (E) Issue a writ of certiorari or any other writ or direction or order to declare Notification No. 08/2022 dated 12.07.2022, issued by Respondent No. 3, enclosed as Annexure D, as ultra-vires Section 168A of KGST Act, 2017 for the reasons stated in the grounds. (F) Issue a writ of certiorari or any other writ or direction or order to declare Notific....
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....pass any other writ, order or direction as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case and in the interest of justice and equity And (J) Grant such other consequential reliefs as this Honourable High Court may think fit including refund of amounts pald, if any and the cost of this writ petition." 2. The petitioner - M/s. Rani Channamma University is before this Court calling in question the adjudication orders dated 30.12.2023 passed by respondent No. 1 under Section 73(9) of the CGST/KGST Acts, 2017 read with the Rule 142(5) of the CGST/KGST Rule, 2017. 3. Learned counsel for the petitioner submits that the issue in the lis stands answered by the judgment rendered by the Co-ordinate Bench in the case of M/s. Bengaluru North University vs. Joint Commissioner of Central Tax and others in W.P.No. 4254/2024 and connected matters disposed of on 22.04.2025, wherein it held as under: "10. Before proceeding further, it would be apposite to state that the issues involved in the present petitions stand directly and squarely covered and answered in favour of the petitioners-University in the case of Goa University....
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....uor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. (2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or ....
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....imilar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and] (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authoritie....
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....nd in marching ahead along with others. 31. In P.A. Inamdar v. State of Maharashtra (2005) 6 SCC 537, the Hon'ble Supreme Court has held thus: "81. 'Education' according to Chambers Dictionary is 'bringing up or training;... strengthening of the powers of body or mind; culture'. 82. In Advanced Law Lexicon (P. Ramanatha Aiyar, 3rd Edn., 2005, Vol. 2), 'education' is defined in very wide terms. It is stated: 'Education is the bringing up; the process of developing and training the powers and capabilities of human beings. In its broadest sense the word comprehends not merely the instructions received at school, or college but the whole course of training Moral, intellectual and physical; is not limited to the ordinary instruction of the child in the pursuits of literature. It also comprehends a proper attention to the moral and religious sentiments of the child. And it is sometimes used as synonymous with "learning". XXXX 84. In 'India-Vision-2020' published by the Planning Commission of India, it is stated (at p. 250): 'Education is an important input both for the growth of the soc....
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....pensable component of education, without which such education is incomplete. Therefore, to say that Boards/Universities are not "educational institutions" would amount to divorcing examinations from education. Similar was the view taken by the Karnataka High Court in Principle Addl. Directorate General DGGSTI v. Rajiv Gandhi University of Health Sciences (supra). 35. Let us turn to the present case. The Petitioner University is creature of statute i.e., the Goa University Act, 1984. The Petitioner was established with a purpose of ensuring proper and systematic instruction, teaching, training and research. The fees such as affiliation fees, prospectus fees and migration certificate fees, sports fee etc. received by the Petitioner are per se not commercial in nature. The State has a duty to provide education to the people of India. This duty is being discharged through the University. 58. .... Learned Senior Advocate for the Petitioner University is justified in contending that where the main activity is not a business then any incidental or ancillary transaction held, would normally amount to business only if an independent intention to carry on business in the in....
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....usiness. When we revert to Section 2 (17), we find that the statute defines the said expression to mean any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity irrespective of whether it be for a pecuniary benefit or not. Clauses (b) and (c) of Section 2 (17) are again coupled to clause (a). Clause (d) of Section 2 (17) is concerned with the supply or acquisition of goods, while clauses (e), (f), (g) and (h) would also have no application whatsoever considering the nature of activities which are contemplated therein. 28. That thus leaves us to consider whether the power to regulate, as exercised, could be said to be an activity akin to trade, commerce, manufacture, profession, vocation, adventure, voyager and which are activities enumerated in Section 2 (17) (a). We find ourselves unable to fathom how a power of regulation which stands statutorily vested in a Commission could be countenanced to fall within the ambit of any of those activities. It becomes pertinent to note that while Section 2 (17) (i) also encompasses activities or transactions undertaken by the Central or State Governments or a local authority, the s....
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....es contained in Section 2(17), it would become clear that activities such as trade, commerce, etc., would be business and activities incidental, in connection with or ancillary to such trade, commerce, etc., would also be business. If the activity falls within clause 2(17)(a), then incidental activities or activities in connection or ancillary activities to such business would be covered by Section 2(17)(b). However, if the activity does not fall at all within sub clause (a), then the question of attracting sub clause (b) does not arise in the first place. In other words, if the activity of the University does not fall within clause (a), the question of taxing ancillary, etc., activities under clause (b) would never arise. 13.1 Additionally, I find that this question was answered in the following manner by the Bombay High Court in Goa University's case supra,: "57. The GST has been demanded based on the income recorded in the financial statements, however the activity has to qualify supply to be made liable to GST. The amounts that are chargeable to tax arise on account of supply of goods or services or both and in the absence of this, the show cause notice would ....
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.... on this principle. Issue No. (ii) is accordingly answered in favour of the petitioners-Universities. Re: Issue No. (iii)- Whether the fee collected by the Universities is 'consideration' ? 14. Before adverting to the aforesaid issue, the definition of 'consideration' as defined under CGST/KGST Act, 2017 reads as under: Section 2(31) - definition of 'consideration' reads as: 2(31) "consideration" in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. Provided that a deposit given in respect of the supply of goods or services ....
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....ts from some section of the beneficiaries, to cross-subsidise the main activity, cannot be characterised as engaging in business. The character of being "State", and such corporations or bodies set up under specific laws (whether by States or the Centre) would, therefore, not mean that the amounts are "fee" or "cess" to provide some commercial or business service. In each case, at the same time, the mere nomenclature of the consideration being a "fee" or "cess", is not conclusive. If the fee or cess, or other consideration is to provide an essential service, in larger public interest, such as water cess or sewage cess or fee, such consideration, received by a statutory body, would not be considered "trade, commerce or business" or service in relation to those. Non statutory bodies, on the other hand, which may mimic regulatory or development bodies such as those which promote trade, for a section of business or industry, or are aimed at providing facilities or amenities to improve efficiencies, or platforms to a segment of business, for fee, whether charged by subscription, or specific fee, etc. may not be charitable; when they claim exemption, their case would require further scru....
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....o have a thick connect with the fees regularly leviable and therefore, they would partake the character of fees only. In view of all this, the Revenue is not justified in levying Service Tax on the income accruing to the University on account of affiliation during the academic year between 201213 and 2016-17. The periodicity of collection of affiliation related fees pales into insignificance." 14.2 Therefore, I am of the view that since Universities are not covered under Section 2(17)(i) as also the fact that they perform public functions and are entrusted with a statutory duty in public interest, the aforesaid decision of the Bombay High Court and our own Hon'ble Division Bench decision in RGUHS's case supra would be applicable and it cannot be said that the activities fall within the contractual realm. Therefore, it cannot be said that the statutory functions carried out for a fee would constitute "consideration" under the GST legislations. Issue No.(iii) is accordingly answered in favour of the petitioners-Universities. Re: Issue No. (iv) - Whether the activities undertaken by the Universities are statutory and regulatory in nature ? 15. The B....
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....iam Sundaranar University v. The Joint Director (GST Intelligence), 2021-TIOL-888-HC-MAD-ST, held that the affiliation fees as well as the inspection commission collected by the University are in the nature of statutory levies. It was held that by performing those activities, the Petitioner is only discharging statutory function and the fees collected by the Petitioner cannot be amenable to levy of Service Tax. We are in agreement with the learned Senior Advocate for the Petitioner when he submits that from a conjoint reading of the relevant statutory provisions and judicial precedents, the fees collected by the Petitioner University are in terms of the statutory mandate to undertake the activities as set out in the Goa University Act towards regulating the activity of colleges affiliated to the University cannot be brought under the GST net. 15.1 In the present case in W.P.No.26067/2023, M/s Visvesvaraya Technological University is established under the Visvesvaraya Technological University Act, 1994 (VTU Act) and notified under Government Order No. Law/63/LGN/94 dated 03.04.1995. 15.2 On perusal of the statutory provisions of VTU Act, it is clear that the object....
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....d fees, late fees & penalties..................." 15.5 In W.P.No. 4254/2024, M/s. Bengaluru North University (BNU) is established in the year 2017 under the Karnataka State University (Amended) Act, 2015. The Petitioner was part of Bangalore University and it was trifurcated by creating Bangalore North University and Bangalore Central University. 15.6 On the same lines, the objective of the Petitioner (BNU) is to review and enact a new legislation for governance of Universities replacing the existing Act. The statutory provisions also provide for affiliation of colleges to the privilege of University [See sections: 2(2), 2(13), 3, 4, 59 of KSU (Amended) Act, 2015]. 15.7 Therefore, the activities carried out by the Universities are under the respective statutory provisions, which are in the nature of statutory/regulatory functions and the same cannot be termed as commercial in nature. In terms of the above, the activities not being commercial or business in nature and the fee so charged not qualifying as consideration, I am of the view that the charging provisions under Section 9 r/w Section 7 of CGST/ KGST Act, 2017 would not get attracted to the activiti....
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....ary 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; 16.2 As pointed out by the learned Senior counsel the above exemption entry is similar to the exemption entry under the erstwhile service tax law, which exempted educational services; while interpreting the above exemption entry, the High Court of Bombay in Goa University's case supra, by referring to the decision of the Hon'ble Division Bench of this Court in the case of Principal Additional Director General, DGGSTI vs Rajiv Gandhi University of Health Sciences - (2024) 22 Centax 526 (Kar.), observed that University would also qualify as an educational institution for the purpose of exemption. The Court held as under: 46. We are in respectful agreement with the view of the High Court of Karnataka in Rajiv Gandhi University of Health Sciences (supra) where it is held that University which grants affiliation is also an educational institution. The Madras High Court in Madurai Kamaraj University vs Jt. Commr. of GST & C.Ex., Madurai [....
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....se (a) of Entry No. 66: 54. ................. The University is also an educational institution and students of the University, include students studying through affiliated colleges. Thus, the activities of the University, in so far as it relates to levying of affiliation fees is exempt from GST. 16.4 Further, the Bombay High Court observed that the affiliation and other services would also be covered under clause (b)(iv) of Entry No. 66, which exempts the services relating to admission to, or conduct of examination. The Court held as under: 54. .................... The Circular dated 11.10.2024 in its application to the Goa University where it is clarified that the affiliation services by universities to colleges are not by way of services related to the admission of students to such colleges or the conduct of examinations by such colleges, is erroneous. 16.5 Respondents placed reliance on the judgment of the Telangana High Court in the case of Care College of Nursing's case supra to contend that affiliation fees charged by the University from colleges for granting affiliations to colleges is not exempted under Sl.No.66 of Notification No. 12 of....
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....ay High Court, I hold that the exemption is available to the Universities. Issue No. (v) is accordingly answered in favour of the petitioners-Universities Re: Issue No. (vi) - Whether the impugned Circulars dated 17.06.2021 and 11.10.2024 are legally valid ? 17. On the aspect of validity of Circulars dated 17.06.2021 and 11.10.2024, the Bombay High Court held as under: 50. We are of the opinion that so far as the University is concerned, these clarifications are contrary to the statutory provisions of Sections 7 and 9 of the GST Legislations in as much as the said Circular assumes that the said activity of affiliation service provided by the University to their constituent colleges would qualify as supply. 51. The Supreme Court in CCE Vs. Ratan Melting and Wire Industries, 2008 (231) E.L.T. 22 (S.C) held that the clarifications which are contrary to the statutory provisions have no existence in law to attract levy of GST in terms of section 9, it has to be first established that the activity undertaken by the petitioner University would qualify to be 'supply' in terms of Section 7 of the CGST Act. Imposing levy by way of clarifications i....
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....examination. In our view, affiliation is essentially an activity relating to admission and examination of students and hence the Circular dated 11.10.2024 in its application to the petitioner University is contrary to the settled legal position. The circular cannot take away the effect of the notification statutorily issued. The Respondents cannot whittle down the exemption notification and restrict the scope of the exemption notification by issuing a circular, whereby a new condition is sought to be incorporated thereby restricting the scope of the exemption. To support this view, we rely on Sandur Micro Circuits Ltd. Vs. CCE, Belgaum, 2008 (229) ELT 641 (SC). Reliance is also placed by learned Senior Advocate on Union Of India V/s. Inter Continental (India) 2008 (226) ELT 16 (SC). Their Lordships while examining the issue as to whether CBЕС by way of circular could introduce additional condition for claiming exemption for imported crude palm oil, held that that by issuing a circular subsequent to a notification, the department could not add new conditions to the notification, thereby restricting the scope of exemption notification or whittling it down. 17.1 T....