Aravind Eye Hospital vs. Additional Commissioner

Facts

The petitioner, Aravind Eye Hospital, filed a writ petition seeking to quash a show cause notice dated 31.10.2025 issued by the Additional Commissioner of GST and Central Excise. The petitioner argued that the show cause notice relied on notifications under Section 83A of the Act, which came into force only in 2025, and thus could not be applied to the present proceedings. Furthermore, the petitioner contended that similar issues concerning the classification of charges for training medical and non-medical personnel as commercial coaching centers had already been decided in their favor by the Tribunal. The petitioner also highlighted that the hospital operates as a trust and provides free eye care, suggesting its activities should not be treated as commercial. The petitioner further argued that when proceedings are under Sections 73 and 78, modifications under Section 83A should not be relied upon and that the issue cannot be raised again, citing the Supreme Court in Nizam Sugar Factory vs. Collector of Central Excise, A.P.

Held

The Court noted that in earlier proceedings (WP(MD).No.6020 of 2018), the show cause notice was set aside because it was not issued by the same authority who passed the final order, and the matter was remitted for a fresh show cause notice. The Revenue appealed this decision in W.A(MD).No.641 of 2019. The Division Bench, while confirming the Single Judge's order, also observed that a corrigendum should have been issued when there was a change of adjudicating authority, and no such corrigendum was issued as per a circular dated 10.03.2017. The Division Bench explicitly stated that it was not delving into the merits of whether the services attracted GST, leaving that to the competent authority. The Court held that the order of the learned Single Judge, confirmed by the Division Bench, mandated the issuance of a fresh show cause notice. Under these circumstances, the Court found it inappropriate to consider the jurisdictional and other issues raised by the petitioner at this stage. The Court granted liberty to the petitioner to raise all questions, including jurisdiction and factual aspects, in their reply to the fresh show cause notice, and directed the authority to consider all submissions and pass a speaking order. The writ petition was disposed of with these observations and directions.

Key Issues

1. Whether notifications issued under Section 83A of the CGST Act, which came into force in 2025, can be applied to proceedings concerning periods prior to its enactment? (Question of law) 2. Whether charges for training medical and non-medical personnel by a charitable trust hospital, which also provides free eye care, can be classified as commercial coaching centers attracting GST? (Question of mixed law and fact) 3. Whether the principle of res judicata or issue estoppel applies, preventing the revenue from raising the same issue again, especially after prior favorable decisions for the assessee? Petitioner's Arguments: - Section 83A is not applicable as it came into force in 2025 and the proceedings relate to earlier periods. - The Tribunal has already held that training charges are not commercial coaching. - The hospital's charitable nature and provision of free services mean its activities are not commercial. - Reliance on Section 83A is improper when proceedings are under Sections 73 and 78. - The issue cannot be raised again, citing Nizam Sugar Factory vs. Collector of Central Excise, A.P. Revenue's Arguments: - The judgment records no specific arguments from the respondent revenue.