TaxTMI 
TaxTMI 
2026 (3) TMI 1636
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....already decided in favour of the assessee. However, the findings in the impugned order have been reiterated by the learned DR. Keeping in view the said submission, we proceed to decide the present appeal. 2. It is observed that the assessee-respondent herein, M/s Pandit Deendayal upadhyaya Shekhawati University (PDUSU) was engaged in granting affiliation to non-Government colleges under its jurisdiction in Rajasthan in lieu of consideration in the form of Affiliation Fee. It was observed that the assessee had not paid the service tax on the amount of affiliation fee received during the period 2016-17 and 2017-18 observing the said amount to be the consideration towards rendering a taxable service that show cause notice No. 12/2017-18 dat....
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....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 Syndicate to any institution of health sciences, even if it is situated outside the University Area. Such recognition can be withdrawn also under sub-Section (2). Grant or renewal of affiliation/recognition is subject to payment of specified fees, late fees & penalties. Learned counsel for the Appellant-Revenue argued that granting affiliation/recognition is a service as defined under clause(44) of Section 66B of the 1994 Act and t....
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.... 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 promise". The purpose of consideration is to put some legal limits on enforceability of agreements, in the sense that only those promises which are supported by consideration are enforceable, and others not binding, despite intent of the promisor to be bound by. Consideration is an index of the seriousness of the parties to be bound by the bargain. It also serves evidentiary and formal function. Lord Denning in COMBE vs. C....
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....owever, 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 'affiliation' which has yielded income to the respondent University. This word is not defined either in the RGUHS Act or in the Finance Act. The word 'affiliation' is derived from Latin word affiliare which means 'to adopt as a son.' In Ramanath Iyer's 'The Law Lexicon' 2ND Edition Reprint 2010, LexisNexis, Page 73, it is described as under: "Affiliation' of college. To university means such a connection between an ....
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....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 Mr.Raghuraman. Added, the idea of 'activities carried on for consideration' as employed in the definition of service u/s 65B(44) of the Finance Act ordinarily obtains in the realm of freedom of contract and not in the field of public law. Of course, the concept of sovereign function being impertinent, does not factor in the discussion. The function related to affiliation cannot be treated as a 'bundled service' under clause (3) ....