Dr.B.R.Ambedkar Paramedical Sciences vs. Kaloji Narayana Rao University Of Health Sciences

Facts

The petitioners, various nursing colleges, filed writ petitions challenging demand notices issued by Kaloji Narayana Rao University of Health Sciences (KNRUHS) for inspection and affiliation fees. The petitioners argued that these fees were exempt from GST. The demand notices were dated February 26, 2022, and August 24, 2022, for WP No. 34617 of 2022, and August 18, 2023, and September 13, 2023, for other connected petitions. The petitioners sought to declare these notices illegal and arbitrary, and to stay further proceedings. The respondents included KNRUHS, the Central Board of Indirect Taxes and Customs, and the Directorate General of GST Intelligence.

Held

The High Court held that Notification No. 12/2017-CT (R) dated June 28, 2017, cannot be made applicable to the inspection and affiliation fees charged by KNRUHS. The Court reasoned that these fees, charged by a university to educational institutions, were not specifically exempted under the GST law. Citing the constitutional bench judgment in M/s. Dilip Kumar and Company, the Court emphasized that the benefit of an exemption cannot be extended if the provision is ambiguous or if the assessee does not clearly fall within the exemption. The Court also disagreed with the Karnataka High Court decisions relied upon by the petitioners, finding them distinguishable because they were based on provisions of the Finance Act, 1994 (specifically Clause 66D(l)), which had been omitted and had no equivalent under GST law. Therefore, the Court found no substance in the petitioners' contentions.

Key Issues

1. Whether Notification No. 12/2017-CT (R) dated June 28, 2017, exempting certain services from GST, is applicable to the inspection and affiliation fees charged by KNRUHS to educational institutions. 2. Whether the inspection and affiliation fees charged by KNRUHS are specifically exempted under GST law, considering the principles laid down in constitutional bench judgments regarding exemptions. Petitioner's Arguments: The petitioners contended that the inspection and affiliation fees charged by KNRUHS were covered under the exemption notification and therefore not subject to GST. They relied on decisions from the Karnataka High Court in M/s. Rajiv Gandhi University of Health Sciences and M/s. Bangalore University, which they argued supported their claim for exemption. Revenue's Arguments: The revenue department argued that Notification No. 12/2017-CT (R) is not applicable to the fees in question. They further contended, citing constitutional bench judgments, that exemptions must be strictly construed and that the petitioners had not demonstrated they were covered by any specific exemption. They also argued that the Karnataka High Court decisions were distinguishable as they relied on provisions of the Finance Act, 1994, which were either omitted or not present in GST law.