Surendera Dental College And Research Institute vs. Rajasthan University Of Health Science

Held

The Court held that the grant of affiliation by a University is a statutory and regulatory function and does not constitute a supply of service under the CGST Act. Affiliation fees are not consideration for any taxable activity. The Court further held that affiliation services are exempt under Entry 66 of Notification No. 12/2017-CT (Rate). Therefore, the levy and collection of GST on affiliation fees were held to be illegal and unsustainable. The Court relied on the reasoning from the previous judgment, emphasizing that affiliation is an institutional arrangement enabling educational institutions to prepare students for examinations and conferment of degrees, akin to the functions of Central and State Educational Boards. Consequently, the demand raised by RUHS was set aside. Regarding the transfer of affiliation fee, the Court held it to be beyond its jurisdiction in the present writ petition and granted liberty to the petitioner to file an appropriate writ petition for that relief.

Facts

The petitioner, Surendera Dental College And Research Institute, filed a writ petition challenging a demand for Goods & Service Tax (GST) raised by the Rajasthan University of Health Science (RUHS) on affiliation fees collected by RUHS. The petitioner also sought a direction for RUHS to transfer the affiliation fee for the academic sessions 2025-2026 to 2027-2028 to another university, as the affiliation was being transferred. The petitioner had paid the affiliation fee for the period 2023-2024 to 2027-2028 to RUHS. The issue of GST on affiliation fees had been previously adjudicated by a Co-ordinate Division Bench of the High Court.

Key Issues

1. Whether the grant of affiliation by a University is a statutory and regulatory function that does not constitute a supply of service under the CGST Act, and consequently, whether affiliation fees are consideration for any taxable activity or fall under exempt services. - Petitioner's contention: The petitioner relied on a previous judgment by a Co-ordinate Division Bench of the High Court in D.B. Civil Writ Petition No.9556/2024 (Rajasthan Technical University Versus Union of India & Ors.), which held that GST cannot be imposed upon affiliation fees. The petitioner argued that this legal position should apply to their case. - Revenue/State's contention: The judgment records no specific argument from the revenue or state respondents regarding this issue, other than implicitly supporting the demand for GST by RUHS.