TaxTMI 
TaxTMI 
2026 (1) TMI 426
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....ee received by the University. 2. The brief facts of the case are that the appellant is a university established under the Uttarakhand Technical University Act, 2005. Investigations were initiated by the Regional Unit of the D.G.G.I., Dehradun by summoning records and employee of the appellant. Subsequently, a show cause notice dated 10.04.2019 was issued demanding service tax amounting to Rs.62,28,510/-along with interest allegedly leviable on the affiliation fees received by the appellant during the period w.e.f. 01.10.2013 to 30.06.2017. The Additional Commissioner, Central Excise, Dehradun confirmed the demand of service tax amounting to Rs.62,28,510/- along with interest and imposed equal penalty under section 78 of the Finance Act,....
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....on is done in discharge of public duties enjoined by law; that therefore, such acts having no commercial elements do not fit in the expression 'activities carried on for consideration' appearing in the definition of "service" in section 668(44) of the Finance Act, 1944. In other words, it has been held that the act of affiliating colleges by charging affiliation fee by the university is not service and, therefore, levying of service tax was not justified. 4. Learned Authorized Representative fairly conceded that the issue involved in the present case was no more res-integra, as the same has already been decided by the Hon'ble High Court of Karnataka in Principal Additional Director General, Directorate General of GST Intelligence....
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....141) taxmann.com 206 (Karnataka) 4.3 Further, we observed that in the case of Rajiv Gandhi University of Health Sciences (supra), the Hon'ble Karnataka High Court has held as follows:- "VIII. AS TO TAXABILITY OF INCOME FROM AFFILIATION AND ALLIED FUNCTIONS: (a) The University being a statutory body, accords affiliation to the health science colleges on the recommendation of the State Government. This is done under Section 45 of the RGUHS Act. Affiliation results into certain benefits/privileges; at the same time, it also makes the affiliated colleges to undergo certain supervision at the hands of the Syndicate. Section 48 provides for withdrawal of affiliation. Similarly, Section 46 provides for grant of recognition by the....
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.... expression has a wider connotation and includes both active and passive act. The second component of the definition is consideration, which again is not well defined. However, as per Explanation (a) to section 67 of the Act, 'consideration' includes any amount that is payable for the taxable services provided orto be provided. This Explanation does not make the idea clear. (c) Let us see the definition of consideration u/s 2(d) of the Indian Contract Act, 1872, which reads: "When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence or promise is called consideration for the....
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....deration' even though such an activity may lead to accrual of gains to the person carrying out the activity. Thus, an award received in consideration for contribution over a life time like Nobel Prize, Jnana Peeta, etc., will not be a consideration. There can be many activities without consideration. An artist performing on a street does an activity without consideration even though passersby may drop a coin in his bowl. They are, however, under no obligation to pay any amount for his performance since they have not engaged him for that. On the other hand if the same person is called to perform on payment of an amount of money, then the performance becomes an activity for a consideration. (d) In the above backdrop, let us examine '....
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....s 'to affiliate or recognise colleges and institutions and to withdraw such affiliation or recognition'. Section 45 provides for affiliation and the procedure therefor. For grant of admission, affiliation is a pre-condition under subsection (10). Section 48 provides for withdrawal of affiliation on fault grounds. For the grant or renewal of affiliation, the University levies fees, late fees, fines & penalties in terms of extant statutes of the University. However, the act of granting, renewing or withdrawing is done in discharge of public duties enjoined by law. Therefore, such acts do not fit into the expression 'activities carried on for consideration', more particularly, when they do not have commercial elements, as rightly contended by ....