Telangana High CourtThirumala College Of Nursing vs Kaloji Narayana Rao University Of ... on 17 October, 2023Author:P.Sam KoshyBench:P.Sam KoshyIN THE HIGH COURT FOR THE STATE OF TELANGANA ::\n                     AT HYDERABAD\n\n                              ***\n Writ Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658,\n  26659, 26661, 26663, 26688, 26766, 26776, 26779, 26790,\n  26793, 27316, 27318, 27321, 27326, 27341, 27377, 27405,\n  27420, 27429, 27456, 27458, 27460, 27461, 27462, 27463,\n    27465, 27467, 27468, 27469, 27472 and 27475 of 2023\n\nBetween:\n\nCare College of Nursing and others.\n\n                                                          Petitioners\n                               VERSUS\n\nKaloji Narayana Rao University of Health Sciences,\nRep by its Registrar, and others.\n                                                        Respondents\n\n\n\n            JUDGMENT PRONOUNCED ON: 17.10.2023\n\n\n           THE HONOURABLE SRI JUSTICE P.SAM KOSHY\n\n                                 AND\n\n THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY\n\n\n1.     Whether Reporters of Local newspapers\n       may be allowed to see the Judgments?          : Yes\n2.     Whether the copies of judgment may be\n       Marked to Law Reporters/Journals?             : Yes\n3.     Whether His Lordship wishes to\n       see the fair copy of the Judgment?            : Yes\n\n\n\n                                                 ____________________\n                                                  P.SAM KOSHY, J\n                                       ::2::                        PSK,J & LNA,J\n                                                      WP No.34617 of 2022 & batch\n\n\n\n\n       * THE HONOURABLE SRI JUSTICE P.SAM KOSHY\n                         AND\n THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY\n\n+ Writ Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658,\n  26659, 26661, 26663, 26688, 26766, 26776, 26779, 26790,\n  26793, 27316, 27318, 27321, 27326, 27341, 27377, 27405,\n  27420, 27429, 27456, 27458, 27460, 27461, 27462, 27463,\n    27465, 27467, 27468, 27469, 27472 and 27475 of 2023\n\n% 17.10.2023\n\n#   Between:\n\nCare College of Nursing and others.\n                                                                     Petitioners\n                                     VERSUS\n\nKaloji Narayana Rao University of Health Sciences,\nRep by its Registrar, and others.\n\n                                                                  Respondents\n! Counsel for Petitioner(s)      :        Mr.Gaddam Srinivas\n\n^Counsel for the respondent(s)   :        None for 1st respondent-University;\n                                            Mr. Dominic Fernandes, learned\n                                            Senior Standing Counsel for\n                                            respondent Nos.2 and 3; &\n                                            Mr.V. Rajeshwar Rao, learned\n                                            Government Pleader for\n                                            Commercial Tax Department, for\n                                            respondent Nos.4 and 5 in Writ\n                                            Petition No.24617 of 2022.\n\n<GIST:\n\n> HEAD NOTE:\n\n\n\n? Cases referred ::\n1.    W.P.No.57941 of 2018, decided on 26.07.2022\n2.    W.P.No.112 of 2019, decided on 26.07.2022\n3.    (1978) 1 S.C.C. 498\n4.    (2011) 4 S.C.C. 527\n5.    (2017) 6 S.C.C. 675\n6.    (2018) 9 S.C.C. 1 (F.B.) (S.C.)\n                                 ::3::                      PSK,J & LNA,J\n                                              WP No.34617 of 2022 & batch\n\n\n\n       THE HONOURABLE SRI JUSTICE P. SAM KOSHY\n\n                                AND\n\n THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY\n\n\nWrit Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658, 26659,\n 26661, 26663, 26688, 26766, 26776, 26779, 26790, 26793, 27316,\n 27318, 27321, 27326, 27341, 27377, 27405, 27420, 27429, 27456,\n 27458, 27460, 27461, 27462, 27463, 27465, 27467, 27468, 27469,\n                      27472 and 27475 of 2023\n\nCOMMON ORDER :Since the grounds of challenge and the petitioners and\n\nrespondents, all being the same, we proceed to decide the batch\n\nof writ petitions by this common order.2.   This batch of writ petitions are filed by the educational\n\ninstitutions assailing the demand notice raised by the 1st\n\nrespondent-University so far as payment of G.S.T. on the\n\naffiliation fee and inspection fee together with arrears from July,\n\n2017 onwards.3.   For proper appreciation of facts, it would be more relevant\n\nto take note of the contents of the demand notice issued by the\n\n1st respondent to each of the petitioners in all the writ petitions,\n\nwhich is extracted as under :::4::                          PSK,J & LNA,J\n                                                        WP No.34617 of 2022 & batch"With reference to the subject cited and vide references\n      cited, the University has been directed by GST authorities to\n      collect and deposit the GST dues from July, 2017 onwards on\n      affiliation and inspection fees paid by private institutions affiliated\n      to K.N.R.U.H.S.\n             In this regard, you are hereby directed to submit 9%\n      S.G.S.T. and 9% C.G.S.T. (a total of 18% as G.S.T.) on the\n      affiliation and inspection fee paid to the University from July,\n      2017 onwards in the form of Demand Draft in favour of the\n      Registrar, K.N.R.U.H.S. payable at Warangal within 10 days.\n      Kindly note that the D.D.s are to be submitted separately for each\n      financial year and also please provide the details of affiliation fee\n      and inspection fee paid in a table form year-wise for each\n      Financial Year.Any further orders from the G.S.T. authorities shall be\n      communicated to you for further course of action."4.    For convenience, we are referring to the facts in Writ\n\nPetition No.34617 of 2022 as facts for the rest of the batch of\n\nwrit petitions as well.       However, the other connected batch of\n\nmatters, which are also heard and decided together, are matters\n\nwhere the impugned demand notice have been raised in the\n\npresent year, i.e., 2023.5.    Heard Mr. Gaddam Srinivas, learned counsel for the\n\npetitioners; Mr. Dominic Fernandes, learned Senior Standing\n\nCounsel, appearing on behalf of respondent Nos.2 and 3; and\n\nMr.   V.   Rajeshwar       Rao,     learned     Government         Pleader      for\n                                     ::5::                       PSK,J & LNA,J\n                                                   WP No.34617 of 2022 & batch\n\n\n\nCommercial Tax Department, for respondent Nos.4 and 5 in Writ\n\nPetition No.24617 of 2022. None appeared for the 1st respondent-    Kaloji   Narayana     Rao     University    of     Health    Sciences\n\n(K.N.R.U.H.S.)6.     All the petitioners in the present writ petition as also in the\n\nother connected writ petitions are educational institutions /\n\ncolleges primarily imparting nursing course.             All the colleges\n\nbefore this Court in the various writ petitions are all affiliated\n\nwith the 1st respondent-Kaloji Narayana Rao University of Health\n\nSciences      (K.N.R.U.H.S.),    (for   short,   'the   1st   respondent-\n\nUniversity').7.     The 1st respondent is a University which has been\n\nestablished under the provisions of Act 6 of 1986. The colleges\n\nwhich intend to get affiliation the 1st respondent-University are\n\nrequired to undergo certain procedure. For the purpose of\n\ngranting affiliation, the 1st respondent-University is required to\n\nfirst conduct an inspection and for this purpose, the University\n\ncharges inspection fees as also affiliation fees from the respective\n\ncolleges. All the colleges in this batch of writ petitions have paid\n\nthe inspection fees for the inspection conducted as also the\n\naffiliation fees for the affiliation granted.::6::                        PSK,J & LNA,J\n                                                  WP No.34617 of 2022 & batch8.    The G.S.T. law came into force w.e.f. 01.07.2017.9.    Recently, the respondent Nos.2 and 3 have raised demand\n\nof G.S.T. on the affiliation fees and inspection fees from the 1st\n\nrespondent-University. Based upon the said demand, so raised\n\nby the respondent Nos.2 and 3, the 1st respondent-University in\n\nturn demanded payment of G.S.T. on the affiliation fees and\n\ninspection fees paid by each of these petitioners before this\n\nCourt in the present batch of writ petitions.        It is this demand\n\nraised by the 1st respondent-University from the petitioner-\n\neducational institutions which has led to filing of the present\n\nwrit petition.10.   At the time when the G.S.T. law was enacted, "Education\n\nService" was one of the subjects which was taxable under the\n\n'Heading    No.9992'   as   per    notification   dated      28.06.2017.\n\nSubsequently, there were certain categories of services provided\n\nby the educational institutions which stood exempted from levy\n\nof G.S.T.   It is this exemption of levy of G.S.T. upon certain\n\ncategory of services rendered by the educational institutions as\n\nper notification No.12 of 2017, dated 28.06.2017, which has\n\nbeen heavily relied upon by the petitioners praying for allowing\n\nof the writ petitions and quashment of the impugned demand\n                                ::7::                      PSK,J & LNA,J\n                                             WP No.34617 of 2022 & batch\n\n\n\nnotice raised by the 1st respondent-University for payment of\n\nG.S.T.11.   Learned counsel for the petitioners contended that perusal\n\nof Serial No.66 of Notification No.12 of 2017, dated 28.06.2017,\n\nwould show that the services provided by an educational\n\ninstitution stands exempted from payment of G.S.T. He further\n\ncontended that the term "educational institution" has been\n\nfurther defined in the same notification in Clause (y) ofSection 2of the G.S.T. Act. According to learned counsel for the\n\npetitioners, in terms of the said definition, an institution\n\nproviding education services as a part of curriculum for\n\nobtaining a qualification, would by itself bring within it the\n\nUniversity.   In the process, the collection of fees towards\n\ninspection and affiliation also would get exempted from levy of\n\nG.S.T. In addition, he contended that the amendment brought\n\nto Serial No.66 of the Notification No.12 of 2017, dated\n\n28.06.2017, by incorporating Clause (aa) also would make it\n\nemphatically clear that conduction of entrance examination and\n\ncollection of entrance fees also has been brought within the\n\nexempted category and, thus, it would include affiliation and\n\ninspection fees as well.::8::                       PSK,J & LNA,J\n                                                       WP No.34617 of 2022 & batch12.In support of his contention, learned counsel for the\n\npetitioners firstly relied upon a recent decision of a learned\n\nSingle Judge of the Karnataka High Court in M/s. Rajiv Gandhi\n\nUniversity      of      Health    Sciences      vs.   Principal    Additional\n\nDirector General, Directorate General of GST Intelligence\n\nand    others 1      and   also    in    M/s.BangaloreUniversity        vs.\n\nPrincipal Additional Director General, Directorate General of\n\nGST Intelligence and others2, wherein the learned Single Judge\n\nallowed the said writ petitions by setting aside the show-cause\n\nnotice and also the consequent further actions as well, raised by\n\nthe University from the respective colleges.13.    Additionally, learned counsel for the petitioners also placed\n\nreliance on the following decisions of the Hon'ble Apex Court inThe Principal and others vs. The Presiding Officer and\n\nothers3,Chairman, Bhartia Education Society vs. State of\n\nHimachal Pradesh4 andMaharishi Markandeshwar Medical\n\nCollege and Hospital vs. State of Himachal Pradesh5.1 W.P.No.57941 of 2018, decided on 26.07.20222 W.P.No.112 of 2019, decided on 26.07.20223 (1978) 1 S.C.C. 498\n4 (2011) 4 S.C.C. 527\n5 (2017) 6 S.C.C. 675\n                                 ::9::                       PSK,J & LNA,J\n                                               WP No.34617 of 2022 & batch14.   Learned counsel for the petitioners relied on the above\n\ndecisions to show that affiliation is intrinsically connected with\n\nthe educational institutions having affiliation from a particular\n\nUniversity.   That since the object of the University also is to\n\nensure uniform curriculum and standards among the different\n\naffiliated colleges imparting education on the same course. In the\n\ninstant case, it is the nursing course which is being imparted by\n\nthe petitioners herein, therefore, the 1st respondent-University\n\nwould also fall within the purview of 'educational institution' and\n\nas such the petitioners would also be exempted from levy of\n\nG.S.T. on the inspection fees and affiliation fees.15.   Learned counsel for the petitioners further contended that\n\nin the event, the said fees becomes amenable to G.S.T. and if the\n\npetitioners are made to pay G.S.T. on the inspection fees and\n\naffiliation fees, the petitioner-Colleges would be compelled to\n\npass on the burden on the students who get admitted to the\n\nrespective colleges of the petitioners.   Thus, in terms of Serial\n\nNo.66 of the notification No.12 of 2007, dated 28.06.2017, since\n\nit exempts so far as the services rendered by the educational\n\ninstitutions to the students, the petitioners should not be\n\ncompelled to pay G.S.T. on the inspection fees and the affiliation\n                                  ::10::                      PSK,J & LNA,J\n                                                WP No.34617 of 2022 & batch\n\n\n\nfees. It would also be detrimental to the interest of the students\n\nwho have meanwhile taken admission to the petitioner-Colleges.16.   Per contra, Mr. Dominic Fernandes, for Commercial Tax, for\n\nrespondent Nos.2 to 4, contended that the impugned demand\n\nnotice is one which is in fact raised by the 1st respondent-\n\nUniversity and the 1st respondent-University as such has not\n\ndisputed or denied payment of G.S.T. on the inspection fees or\n\naffiliation fees.17.   Learned       Special   Standing    Counsel   for    respondent-\n\nDepartment further submitted that in terms of Notification No.11\n\nof 2017, dated 28.06.2017, the Government had made it\n\nexpressly clear that under the 'Heading - 9992', the educational\n\ninstitution is one which is taxable under the G.S.T. law.             The\n\nterm 'Education Service' includes various components viz.,\n\naffiliation fees, inspection fees and various other fees which is\n\ncollected both by the 1st respondent-University as also by the\n\nrespective colleges affiliated to the 1st respondent-University. It\n\nwas further contended that after making education service\n\ntaxable, the Government relaxed the same to some extent vide\n\nNotification No.12 of 2017, dated 28.06.2017, and it is that\n\nwhich is reflected upon in Serial No.66 of the said notification.::11::                       PSK,J & LNA,J\n                                                 WP No.34617 of 2022 & batchClause (a) of Serial No.66 under the same 'Heading - 9992'\n\nprescribing services provided by an educational institution to its\n\nstudents, faculty and staff to be one under the exempted\n\ncategory so far as the levy of tax is concerned.18.   According   to   learned     counsel     for    the   respondent-\n\nDepartment, a plain reading of Serial No.66 (which was further\n\namended vide Notification No.2 of 2018, dated 25.01.2018)\n\nwould go to show that the collection of affiliation fees and\n\ninspection fees does not stand exempted.             It was the further\n\ncontention of learned counsel for the respondent-Department\n\nthat, in the 47th G.S.T. Council Meeting held on 28/ 29.06.2022,\n\none of the topic of discussion in their agenda was in respect of\n\nthe confusion that prevailed regarding the taxability of G.S.T. on\n\nsale of application forms to the prospective students, issue of\n\nmigration, eligibility forms to graduate students, affiliation works\n\nand other educational activities.         In this context, the G.S.T.\n\nCouncil had in its aforesaid meeting categorically resolved that\n\nthe services provided by the educational institutions to its\n\nstudents, faculty and staff stands exempted vide Notification\n\nNo.12 of 2017, dated 28.06.2017.::12::                     PSK,J & LNA,J\n                                               WP No.34617 of 2022 & batch19.   It was further resolved in the same meeting that so far as\n\ncollection of application fees for entrance examination and also\n\ncollection of fee for issuance of eligibility certificates and for\n\nentrance examination and admission fees, etc., all would stand\n\nexempted in terms of Notification No.12 of 2017, dated\n\n28.06.2017.   However,      as   regards   issue   of   affiliation    of\n\neducational institutions with the Universities and Boards, etc., it\n\nwas resolved that the Circular issued by the Government of\n\nIndia, Ministry of Finance, Department of Revenue, dated\n\n17.06.2021, would be governing the field. As per Clause (4)(iii) of\n\nthe said Circular, G.S.T. @ 18% applies to such services provided\n\nby the Board or University so far as accreditation to education\n\ninstitutions is concerned20.   Learned counsel for the respondent-Department further\n\ncontended that the decisions rendered by learned Single Judge\n\nof the Karnataka High Court inThe Presiding Officer and\n\nothers(1 supra) andChairman, Bhartia Education Society(2 supra) (as was strongly harped upon by the learned counsel\n\nfor the petitioners) would not be applicable or come to the rescue\n\nof the petitioners as proper material papers were not brought\n\nbefore the said High Court at the time of disposal of the said writ\n                                ::13::                       PSK,J & LNA,J\n                                               WP No.34617 of 2022 & batch\n\n\n\npetitions.   That that the learned Single Judge had primarily\n\nrelied upon Clause 66D of the Finance Act, 1994which had the\n\nnegative list of services upon which there would be no levy of tax.21.   The learned counsel for the respondent-Department further\n\nbrought to the notice of this Court that Sub-Clause (l) of the\n\nClause 66D of the Finance Act, 1994already stood omitted by\n\nway ofFinance Act, 2016w.e.f. 14.05.2016. The levy of G.S.T. is\n\nunder the provisions of the G.S.T. law which does not have any\n\nsuch clause as was relied upon by the learned Single Judge of\n\nthe Karnataka High Court from the Finance Act, i.e., Clause\n\n66D. Therefore, the said decisions are distinguishable both on\n\nfacts and also on law.22.   Having heard the contentions of learned counsel on either\n\nside and on perusal of the records, what needs to be taken into\n\nconsideration for deciding the issue raised by the learned\n\ncounsel for the petitioners is the first notification that was issued\n\nby the Government, i.e., Notification No.11 of 2017, dated\n\n28.06.2017 which first reflected the description of the services\n\nwhich would be taxable and also reflected the headings and the\n\nrate of charges of G.S.T. upon each of the services notified\n\ntherein.::14::                           PSK,J & LNA,J\n                                                         WP No.34617 of 2022 & batch\n\n\n\n23.   Serial    No.30     of   Notification        No.11    of      2017,    dated28.06.2017 is the head subject which is relevant for the decision\n\nof this Court, which for ready reference is extracted hereunder :Notification No.11/2017-Central Tax (Rate)\n\n                                              New Delhi, the 28th June, 2017\n\n              G.S.R.... (E) - In exercise of the powers conferred by sub-\n      section (1) ofSection 9, sub-section (1) ofSection 11, sub-section\n      (5) ofsection 15and sub-section (1) ofSection 16of the Central\n      Goods and Services Tax Act, 2017 (12 of 2017), the Central\n      Government, on the recommendations of the Council, and on being\n      satisfied that it is necessary in the public interest so to do, hereby\n      notifies that the central tax, on the intra-State supply of services of\n      description as specified in column (3) of the Table below, falling\n      under Chapter, Section or Heading of scheme of classification of\n      services as specified in column (2), shall be levied at the rate as\n      specified in the corresponding entry in Column (4), subject to the\n      conditions as specified in the corresponding entry in Column (5) of\n      the said Table :-Sl.     Chapter,       Description of Service          Rate       Condition\n   No.    Section or                                   (per cent)\n           Heading\n  ... ..        ...                     ....                     ...             ...30     Heading 9992    Education services                9             -24.   From a plain reading of the above notification, it is\n\nevidently clear that educational services have been particularly\n\nheld to be taxable.25.   It is now relevant to take note of the notification issued by\n\nthe Government of India granting exemption to certain services,\n\nvide Notification No.12 of 2017-Central Tax (Rate), dated\n\n28.06.2017, at Serial No.66, which again for ready reference is\n\nreproduced hereunder, viz.,\n                                      ::15::                           PSK,J & LNA,J\n                                                         WP No.34617 of 2022 & batch\n\n\n                  Notification No.12/2017-Central Tax (Rate)\n\n                                               New Delhi, the 28th June, 2017\n\n           G.S.R.... (E) - In exercise of the powers conferred by sub-section\n   (1) ofSection 11of the Central Goods and Services Tax Act, 2017 (12 of\n   2017), the Central Government, on being satisfied that it is necessary in\n   the public interest so to do, on the recommendations of the Council,\n   hereby exempts the intra-State supply of services of description as\n   specified in column (3) of the Table below from so much of the central tax\n   leviable thereon under sub-section (1) ofSection 9of the said Act, as is in\n   excess of the said tax calculated at the rate as specified in the\n   corresponding entry in Column (4) of the said Table, unless specified\n   otherwise, subject to the relevant conditions as specified in the\n   corresponding entry in Column (5) of the said Table, viz.:-Sl.      Chapter,        Description of Service            Rate       Condition\nNo.     Section or                                      (per cent)\n         Heading\n... ..        ...                        ....                    ...              ...66     Heading 9992    Services provided -                 9              -(a) by an educational\n                       institution to its students,\n                       faculty and staff;(b) to an educational\n                       institution, by way of -(i) transportation of\n                       students, faculty and\n                       staff;(ii) catering, including any\n                       mid-day meals scheme\n                       sponsored by the Central\n                       Government,              State\n                       Government        or    Union\n                       territory;\n                       (iii) security or cleaning or\n                       house-keeping         services\n                       performed        in      such\n                       educational institution;\n                       (iv) services relating to\n                       admission to, or conduct\n                       of examination by, such\n                       institution; upto higher\n                       secondary;\n                                Provided         that\n                       nothing contained in entry\n                       (b) shall apply to an\n                       educational        institution\n                       other than an institution\n                       providing services by way\n                       of pre-school education\n                       and education up to\n                       higher secondary school or\n                       equivalent.\n                                       ::16::                          PSK,J & LNA,J\n                                                         WP No.34617 of 2022 & batch26.   The above notification stood amended vide Notification\n\nNo.2 of 2018, dated 25.01.2018, wherein Clause (aa) was also\n\ninserted after Clause (a) under Serial No.66, which reads as\n\nunder :"(o)   against serial number 66, in the entry in column (3) -(i) after item (a), the following item shall be inserted, viz.,\n\n             "(aa) by an educational institution by way of conduct of\n      entrance examination against consideration in the form of\n      entrance fee."27.   The aforesaid amendment was brought by virtue of a\n\ndecision that was taken on the recommendations of the Council,\n\nand the 25th meeting of G.S.T. Council held on 18.01.2018,\n\nwherein certain exemptions / changes in the G.S.T. rates was\n\ndecided and one such item was in respect of the service relating\n\nadmission and conduction of examination. The decision of the\n\nsaid Council is reproduced hereunder, viz.,\n\n\n             "(20)   To exempt services relating to admission to, or\n      conduct of examination provided to all educational institutions, as\n      defined in the notification.To exempt services by educational institution by way of\n      conduct of entrance examination against consideration in the form\n      of entrance fee."::17::                     PSK,J & LNA,J\n                                              WP No.34617 of 2022 & batch28.   If we read the provisions of G.S.T. law, the notification\n\nNo.11 of 2017, dated 28.06.2017, emphatically holds education\n\nservice to be one which is liable to tax. The relaxations granted\n\nvide Notification No.12 of 2017 is confined to the services\n\nrendered by the educational institutions to the students, faculty\n\nand staff. It also grants exemption in respect of collection of fees\n\nrelating to entrance examination and other fees chargeable from\n\nthe students for admission or any such purpose. Nowhere has\n\nthe respondents declared or notified that charging of inspection\n\nfees and the affiliation fees by the 1st respondent-University also\n\nwould fall within the exempted category. Under the taxing law,\n\nunless there is a specific exemption granted specifically on\n\ninspection fees and affiliation fees, the petitioners cannot be\n\npermitted to claim exemption drawing an inference of the\n\naffiliation and inspection fees both being part of the Notification\n\nNo.12 of 2017, dated 28.06.2017, and also being inter-linked to\n\nthe   curriculum   which   is   undertaken   by   the    educational\n\ninstitutions and the admissions derived therefrom.29.   The fact that the Notification No.11 of 2017, dated\n\n28.06.2017, has a broader subject when it prescribes education\n\nservice and Notification No.12 of 2017, dated 28.06.2017,\n                                      ::18::                          PSK,J & LNA,J\n                                                        WP No.34617 of 2022 & batch\n\n\n\nspecifically enumerates specific services which stand exempted\n\nand   inspection      and    affiliation      fees   not    reflected    in    the\n\nNotification No.12 of 2017, dated 28.06.2017, the relief sought\n\nfor by the petitioners or the issue raised by the petitioners would\n\nnot be sustainable.         Since there were certain handicaps and\n\nconfusions prevailing, the G.S.T. Council itself in its 47th G.S.T.\n\nCouncil Meeting held on 28/29.06.2022 very categorically held\n\nthat as regards the question of granting exemption to the\n\naffiliation and other fees collected by the 1st respondent-\n\nUniversity, it is the Circular dated 17.06.2021 issued by the\n\nGovernment of India which would govern the field and clause (4)\n\nthereof reads as under :"4.    Taking into account the above, the G.S.T. Council has\n      recommended, to clarify as below :(i)    G.S.T. is exempt on services provided by Central or State\n      Boards (including the boards such as NBE) by way of conduct of\n      examination for the students, including conduct of entrance\n      examination for admission to educational institution [under\n      S.No.66(aa) of Notif.No.12/2017-CT(R)].        Therefore, G.S.T. shall\n      not apply to any fee or any amount charged by such Boards for\n      conduct of such examinations including entrance examinations.(ii)   G.S.T. is also exempt on input services relating to\n      admission to, or conduct of examination, such as online testing\n      service, result publication, printing of notification for examination,\n                                        ::19::                      PSK,J & LNA,J\n                                                      WP No.34617 of 2022 & batch\n\n\n\n      admit card and question papers, etc., when provided to such\n      Boards [under S.No.66(b)(iv) of Notif.No.12/2017-CT(R)].(iii)   G.S.T. at the rate of 18% applies to other services provided\n      by such Boards, namely of providing accreditation to an institution\n      or to a professional (accreditation fee or registration fee such as\n      fee for FMGE screening test) so as to authorize them to provide\n      their respective services."30.   A plain reading of the said Clause (4) would give a clear\n\nindication that, except for the exemption that has been\n\nspecifically enumerated in Notification No.12 of 2017, dated\n\n28.06.2017,      all    other       services    rendered    by    educational\n\ninstitutions and universities are taxable under the G.S.T. law.\n\nAnother fact which needs to be considered is that under the\n\nNotification No.11 of 2017, dated 28.06.2017, (as has been\n\ndiscussed earlier), the entire 'education service' itself is held to\n\nbe taxable under G.S.T. law, and if the Government intended to\n\nexempt the educational institutions and universities from the\n\nambit of G.S.T. law, they would have simply, as in Notification\n\nNo.11 of 2017, incorporated 'education service' and would have\n\nexempted the petitioners and the universities as well. However,\n\nthat is not the case.31.   Notification No.12 of 2017, dated 28.06.2017, which stood\n\namended       further    vide       Notification   No.2    of    2018,   dated\n                                 ::20::                      PSK,J & LNA,J\n                                               WP No.34617 of 2022 & batch\n\n\n\n25.01.2018, specifically enumerates the specific nature of service\n\nrendered by the educational institutions which would stand\n\nexempted.     Inspection and affiliation fees however is not\n\npart of the said notification granting exemption. Yet another\n\naspect which needs to be considered is that Notification No.12 of\n\n2017, dated 28.06.2017, provides for exemption of services\n\nrendered by the educational institutions to three different\n\ncategories, i.e., students, faculty and staff. It does not deal with\n\nthe services rendered by the university to the educational\n\ninstitutions. 'Affiliation' and 'inspection' is a service rendered by\n\nthe university to the educational institutions for which the\n\nuniversity had charged the respective educational institutions.32.   Surprisingly, in the instant case, as of now, the 1st\n\nrespondent-University does not seem to be aggrieved of the\n\ndemand raised by the respondent-Department so far as payment\n\nof G.S.T. on the inspection and affiliation fees is concerned.\n\nWhat is further necessary to be reflected at this juncture is that\n\nthe nature of service rendered by the 1st respondent-University\n\nto the respective educational institutions is at a stage where the\n\nadmissions to the students have not commenced.              It is at the\n\ninception   stage   of   the   educational   institutions     that   the\n                                         ::21::                           PSK,J & LNA,J\n                                                            WP No.34617 of 2022 & batch\n\n\n\ninspection is conducted and the affiliation is thereafter granted.\n\nThe admission and the services rendered by the educational\n\ninstitutions to the students, the faculty and the staff are all\n\nservices rendered subsequent to the affiliation.                    Therefore, the\n\ncontention that the petitioners have canvassed is hard to accept.33.    The Constitution Bench decision of the Hon'ble Apex Court\n\nrendered in the case of Commissioner of Customs (Import),\n\nMumbai vs. M/s. Dilip Kumar and Company 6, dealing with the\n\nsituation where there is any doubt or confusion so far as\n\nclaiming of exemption is concerned (though there is none in the\n\npresent writ petition so far as this Bench is concerned) the\n\nHon'ble apex Court held at para Nos.48 to 51 as under :"48. The next authority, which needs to be referred is\n      Mangalore Chemicals [Mangalore Chemicals and Fertilisers Ltd. v.\n      CCT, 1992 Supp (1) SCC 21] . As we have already made reference to\n      the same earlier, repetition of the same is not necessary. From the above\n      decisions, the following position of law would, therefore, be clear.\n      Exemptions from taxation have a tendency to increase the burden on the\n      other unexempted class of taxpayers. A person claiming exemption,\n      therefore, has to establish that his case squarely falls within the\n      exemption notification, and while doing so, a notification should be\n      construed against the subject in case of ambiguity.6 (2018) 9 S.C.C. 1 (F.B.) (S.C.)\n                                   ::22::                          PSK,J & LNA,J\n                                                     WP No.34617 of 2022 & batch49. The ratio in Mangalore Chemicals case [Mangalore\nChemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21] was\napproved by a three-Judge Bench in Novopan India Ltd. v. CCE\n[Novopan India Ltd. v. CCE, 1994 Supp (3) SCC 606] . In this case,\nprobably for the first time, the question was posed as to whether the\nbenefit of an exemption notification should go to the subject/assessee\nwhen there is ambiguity. The three-Judge Bench, in the background of\nEnglish and Indian cases, in para 16, unanimously held as follows :(SCC p. 614)\n\n          "16. We are, however, of the opinion that, on principle,\n     the decision of this Court in Mangalore Chemicals [Mangalore\n     Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21]-- and inUnion of India v. Wood Papers Ltd. [Union of Indiav. Wood Papers Ltd., (1990) 4 SCC 256 : 1990 SCC (Tax) 422]\n     , referred to therein -- represents the correct view of law. The\n     principle that in case of ambiguity, a taxing statute should be\n     construed in favour of the assessee -- assuming that the said\n     principle is good and sound -- does not apply to the\n     construction of an exception or an exempting provision, they\n     have to be construed strictly. A person invoking an exception\n     or an exemption provision to relieve him of the tax liability\n     must establish clearly that he is covered by the said provision.In case of doubt or ambiguity, benefit of it must go to the\n     State."50. In TISCO Ltd. v. State of Jharkhand [TISCO Ltd. v. State of\nJharkhand, (2005) 4 SCC 272] , which is another two-Judge Bench\ndecision, this Court laid down that eligibility clause in relation to\nexemption notification must be given strict meaning and in para 44, it\nwas further held : (SCC pp. 289-290)\n                                         ::23::                          PSK,J & LNA,J\n                                                           WP No.34617 of 2022 & batch\n\n\n\n                 "44. The principle that in the event a provision of fiscal\n           statute is obscure such construction which favours the assessee\n           may be adopted, would have no application to construction of\n           an exemption notification, as in such a case it is for the\n           assessee to show that he comes within the purview of\n           exemption (see Novopan India Ltd. v. CCE [Novopan India\n           Ltd. v. CCE, 1994 Supp (3) SCC 606] )."51.In Hari Chand case [CCE v. Hari Chand Shri Gopal,\n      (2011) 1 SCC 236] , as already discussed, the question was whether a\n      person claiming exemption is required to comply with the procedure\n      strictly to avail the benefit. The question posed and decided was indeed\n      different. The said decision, which we have already discussed supra,\n      however, indicates that while construing an exemption notification, the\n      Court has to distinguish the conditions which require strict compliance,\n      the non-compliance of which would render the assessee ineligible to\n      claim exemption and those which require substantial compliance to be\n      entitled for exemption. We are pointing out this aspect to dispel any\n      doubt about the legal position as explored in this decision. As already\n      concluded in para 50 above, we may reiterate that we are only\n      concerned in this case with a situation where there is ambiguity in an\n      exemption notification or exemption clause, in which event the benefit of\n      such ambiguity cannot be extended to the subject/assessee by applying\n      the principle that an obscure and/or ambiguity or doubtful fiscal statute\n      must receive a construction favouring the assessee. Both the situations\n      are different and while considering an exemption notification, the\n      distinction cannot be ignored."34.     Relying upon the constitutional decision of the Hon'ble\n\nApex Court also, we are of the firm view that firstly, the\n\nNotification No.12 of 2017, dated 28.06.2017, cannot be made\n                                 ::24::                     PSK,J & LNA,J\n                                              WP No.34617 of 2022 & batch\n\n\n\napplicable upon inspection and affiliation fees charged by the 1st\n\nrespondent-University    from     the    educational     institutions.\n\nSecondly, since so far as inspection and affiliation fees charged\n\nby   the   1st   respondent-University    from    the    educational\n\ninstitutions has not been specifically exempted in terms of the\n\nConstitution Bench judgment in M/s. Dilip Kumar and\n\nCompany (6 supra), the said benefit cannot be extended to the\n\npetitioners. As regards the two decisions rendered by the\n\nKarnataka High Court in M/s. Rajiv Gandhi University of\n\nHealth Sciences (1 supra) and in M/s.Bangalore University\n\n(2 supra), which was heavily relied upon by the learned counsel\n\nfor the petitioners, we are in complete agreement to the\n\ncontentions raised by the learned counsel for the respondent-\n\nDepartment that the learned Single Judge of the Karnataka High\n\nCourt while passing orders in the aforesaid two decisions, has\n\nrelied upon the provisions ofFinance Act, 1994(Clause 66D).\n\nSub-Clause (l) of Clause 66D of the Finance Act, 1994which in\n\nfact, first of all, stood omitted by theFinance Act, 2016w.e.f.\n\n14.05.2016. Secondly, what also needs to be mentioned is that\n\nunder the G.S.T. law there is no such provision as Sub-Clause\n\n(11) of Clause 66D of the Finance Act. Therefore, we are inclined\n                                ::25::                     PSK,J & LNA,J\n                                             WP No.34617 of 2022 & batch\n\n\n\nto respectfully disagree with the view taken by the Karnataka\n\nHigh Court in the aforesaid two decisions. Therefore, the said\n\ndecisions are distinguishable in facts and law.35.   For all the aforesaid reasons, we do not find any substance\n\nin the contentions raised by the learned counsel for the\n\npetitioners. Accordingly, the Writ Petition No.34617 of 2022\n\nstands dismissed. Consequently, all the connected writ petitions\n\nalso stand dismissed. No costs.36.   As a sequel, miscellaneous petitions pending if any in these\n\nwrit petitions, shall stand closed._____________________________\n                                    P. SAM KOSHY, J\n\n\n                           ____________________________________\n                            LAXMI NARAYANA ALISHETTY, J\n\n\nDate : 17.10.2023\n\nNote : LR copy to be marked\nB/o.Ndr/kkm