Principal Additional Director General vs. M/S Bangalore University
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This writ appeal was filed by the Principal Additional Director General, Directorate General of GST Intelligence, and others (appellants) against M/s. Bangalore University (respondent). The appeal challenges a judgment dated July 26, 2019, passed by a learned Single Judge in WP No. 112/2019. The core issue revolves around whether affiliation fees collected by the University from its affiliated colleges constitute 'educational services' for the purpose of GST. The respondent-University brought to the Court's attention a previous decision by a co-ordinate bench in W.A.No.856/2022, dated July 30, 2024, which had quashed a show-cause notice related to service tax on income from affiliation, renewal, withdrawal, or denial of affiliation/recognition.
Held
The Court held that the question raised in this appeal is identical to the one decided by a co-ordinate bench in W.A.No.856/2022, disposed of on July 30, 2024. In that previous case, the co-ordinate bench had quashed a show-cause notice that sought to levy service tax on income arising from the grant, renewal, withdrawal, or denial of affiliation/recognition to institutions, which included fees, late fees, fines, and penalties. Therefore, following the precedent set by the co-ordinate bench, the present writ appeal is also disposed of on the same terms concerning the collection of affiliation fees by the respondent-University. The ratio decidendi is that income derived from affiliation activities, including fees, is not to be considered as taxable educational services.
Key Issues
1. Whether the charges collected by the University as affiliation fees from affiliated colleges form part of educational services under the GST regime? The appellants contended that these fees are taxable as services provided by the University. The respondent-University argued, by referring to a co-ordinate bench's decision in W.A.No.856/2022, that the show-cause notice demanding service tax on income derived from affiliation, including fees, late fees, fines, and penalties, was quashed. This implies that the University's position, supported by the co-ordinate bench's reasoning, is that such income/service does not constitute taxable educational services.
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)
Heard learned counsel Sri.Jeevan J Neeralgi for appellants and learned counsel Sri.Raghavendra C.R. for respondent-University. Perused the writ appeal papers.
The question involved in the present appeal is as to whether the charges collected by the University as affiliation fees from the affiliated colleges would form part of educational services.
Learned counsel for the respondent brings to the notice of this Court that a co-ordinate Bench of this Court in an identical fact situation in W.A.No.856/2022 disposed NC: 2024:KHC:35647-DB WA No. 801 of 2022
of on 30.07.2024 has quashed the show-cause notice, calling upon the assesses to pay service tax on the income accruing on account of or attributable to grant, renewal, withdrawal or denial of affiliation/recognition to the institutions concerned and that such income/service would include fee, late fee, fine, penalty and the like.
In view of the above decision, the question raised in this appeal also stands disposed of in terms of the order dated 30.07.2024 in W.A.No.856/2022 insofar as collection of affiliation fee by the respondent-University is concerned.
With the above, the writ appeal stands disposed of. (S.G.PANDIT) JUDGE (C.M. POONACHA) JUDGE
MPK CT:bms
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.