Joseph Vayalil George vs. Union Of INDIA

Heard learned counsel for the petitioner and learned CGC for 1st respondent and learned counsel for respondents 2 and 3 and perused the material on record. NC: 2025:KHC:15789

A perusal of the material on record will indicate that the petitioner is the Garden City University which has various educational services including the private services to its students, faculties and staff, in that the petitioner – University leased private hostel facilities to its students by charging certain amounts from the students. On 26.04.2021, the 3rd respondent issued a show cause notice to the petitioner who submitted a reply culminating in an order dated 04.01.2023, whereby the 3rd respondent dropped the proceedings under the Finance Act, 1994 as against the petitioner – University on the ground that the services rendered by the petitioner to its students including providing hostel facilities to them was exempt from payment of service tax for the tax period 2015- 16, 2016-17. Aggrieved by the said order dated 04.01.2023, the respondents – revenue filed an appeal before the 2nd respondent – Appellate authority, who proceeded to pass the impugned order at Annexure-C dated 07.08.2024 allowing the appeal filed by the revenue by setting aside the order passed by the original authority, aggrieved by the impugned order passed by the 2nd respondent – appellate authority, the petitioner is before this Court by way of the present petition. NC: 2025:KHC:15789

In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the exemption Notification No.25/2012-ST dated 20.06.2012 which was amended w.e.f. 11.07.2014 vide Notification No.6/2014 – ST in order to point out that all services provided by the petitioner to its students, faculties and staff including services provided by way of hostel facilities was exempt from payment of service tax as correctly held by the original authority. It is further submitted that the 2nd respondent – appellate authority has not considered or appreciated the said exemption granted in favour of the petitioner in its right perspective and has misread, misconstrued and misinterpreted the said exemption Notification and has proceeded to pass the impugned order, which deserves to be set aside.

Learned CGC for the 1st respondent as well as learned counsel for other respondents submit that there is no merit in the petition and that the same is liable to be dismissed. It is also submitted that the petitioner has alternative remedy by way of an appeal before the 2nd respondent – appellate authority and as such, NC: 2025:KHC:15789 there is no merit in the petition and that the same is liable to be dismissed.

A perusal of the impugned order will indicate that despite extracting the aforesaid Notifications, the 1st appellate authority has come to the erroneous conclusion that the exemption granted in favour of the petitioner – University by way of exempting payment of service tax on renting immovable property was subsequently withdrawn by amendment w.e.f. 11.07.2014. In this context, it is relevant to state that notwithstanding the fact that the specific exemption granted in the Notification prior to amendment in relation to renting immovable property having omitted by way of amendment, the amendment continued in respect of services provided to its students, faculties and staff and the entry is broad enough to apply to and govern service of providing hostel facility by the petitioner to its students, which stands covered by the aforesaid Notification.

Under these circumstances, I am of the considered opinion that the 1st appellate authority clearly mi irected itself in reversing the well reasoned and well considered order passed by NC: 2025:KHC:15789 the original authority and consequently, the impugned order passed by the 1st appellate authority deserves to be set aside.

In the result, I pass the following:- ORDER