Telangana High Court
Jadala Sunil vs The State Of Telangana on 31 July, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
IN THE HIGH COURT FOR THE STATE OF TELANGANA ::
AT HYDERABAD
***
Writ Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658,
26659, 26661, 26663, 26688, 26766, 26776, 26779, 26790,
26793, 27316, 27318, 27321, 27326, 27341, 27377, 27405,
27420, 27429, 27456, 27458, 27460, 27461, 27462, 27463,
27465, 27467, 27468, 27469, 27472 and 27475 of 2023
Between:
Care College of Nursing and others.
Petitioners
VERSUS
Kaloji Narayana Rao University of Health Sciences,
Rep by its Registrar, and others.
Respondents
JUDGMENT PRONOUNCED ON: 17.10.2023
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : Yes
2. Whether the copies of judgment may be
Marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
____________________
P.SAM KOSHY, J
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* THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
+ Writ Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658,
26659, 26661, 26663, 26688, 26766, 26776, 26779, 26790,
26793, 27316, 27318, 27321, 27326, 27341, 27377, 27405,
27420, 27429, 27456, 27458, 27460, 27461, 27462, 27463,
27465, 27467, 27468, 27469, 27472 and 27475 of 2023
% 17.10.2023
# Between:
Care College of Nursing and others.
Petitioners
VERSUS
Kaloji Narayana Rao University of Health Sciences,
Rep by its Registrar, and others.
Respondents
! Counsel for Petitioner(s) : Mr.Gaddam Srinivas
^Counsel for the respondent(s) : None for 1st respondent-University;
Mr. Dominic Fernandes, learned
Senior Standing Counsel for
respondent Nos.2 and 3; &
Mr.V. Rajeshwar Rao, learned
Government Pleader for
Commercial Tax Department, for
respondent Nos.4 and 5 in Writ
Petition No.24617 of 2022.
<GIST:
> HEAD NOTE:
? Cases referred ::
1. W.P.No.57941 of 2018, decided on 26.07.2022
2. W.P.No.112 of 2019, decided on 26.07.2022
3. (1978) 1 S.C.C. 498
4. (2011) 4 S.C.C. 527
5. (2017) 6 S.C.C. 675
6. (2018) 9 S.C.C. 1 (F.B.) (S.C.)
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THE HONOURABLE SRI JUSTICE P. SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
Writ Petition Nos.34617 of 2022, 26565, 26654, 26656, 26658, 26659,
26661, 26663, 26688, 26766, 26776, 26779, 26790, 26793, 27316,
27318, 27321, 27326, 27341, 27377, 27405, 27420, 27429, 27456,
27458, 27460, 27461, 27462, 27463, 27465, 27467, 27468, 27469,
27472 and 27475 of 2023
COMMON ORDER :
Since the grounds of challenge and the petitioners and
respondents, all being the same, we proceed to decide the batch
of writ petitions by this common order.
2. This batch of writ petitions are filed by the educational
institutions assailing the demand notice raised by the 1st
respondent-University so far as payment of G.S.T. on the
affiliation fee and inspection fee together with arrears from July,
2017 onwards.
3. For proper appreciation of facts, it would be more relevant
to take note of the contents of the demand notice issued by the
1st respondent to each of the petitioners in all the writ petitions,
which is extracted as under :
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“With reference to the subject cited and vide references
cited, the University has been directed by GST authorities to
collect and deposit the GST dues from July, 2017 onwards on
affiliation and inspection fees paid by private institutions affiliated
to K.N.R.U.H.S.
In this regard, you are hereby directed to submit 9%
S.G.S.T. and 9% C.G.S.T. (a total of 18% as G.S.T.) on the
affiliation and inspection fee paid to the University from July,
2017 onwards in the form of Demand Draft in favour of the
Registrar, K.N.R.U.H.S. payable at Warangal within 10 days.
Kindly note that the D.D.s are to be submitted separately for each
financial year and also please provide the details of affiliation fee
and inspection fee paid in a table form year-wise for each
Financial Year.
Any further orders from the G.S.T. authorities shall be
communicated to you for further course of action.”
4. For convenience, we are referring to the facts in Writ
Petition No.34617 of 2022 as facts for the rest of the batch of
writ petitions as well. However, the other connected batch of
matters, which are also heard and decided together, are matters
where the impugned demand notice have been raised in the
present year, i.e., 2023.
5. Heard Mr. Gaddam Srinivas, learned counsel for the
petitioners; Mr. Dominic Fernandes, learned Senior Standing
Counsel, appearing on behalf of respondent Nos.2 and 3; and
Mr. V. Rajeshwar Rao, learned Government Pleader for
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Commercial Tax Department, for respondent Nos.4 and 5 in Writ
Petition No.24617 of 2022. None appeared for the 1st respondent
– Kaloji Narayana Rao University of Health Sciences
(K.N.R.U.H.S.)
6. All the petitioners in the present writ petition as also in the
other connected writ petitions are educational institutions /
colleges primarily imparting nursing course. All the colleges
before this Court in the various writ petitions are all affiliated
with the 1st respondent-Kaloji Narayana Rao University of Health
Sciences (K.N.R.U.H.S.), (for short, ‘the 1st respondent-
University’).
7. The 1st respondent is a University which has been
established under the provisions of Act 6 of 1986. The colleges
which intend to get affiliation the 1st respondent-University are
required to undergo certain procedure. For the purpose of
granting affiliation, the 1st respondent-University is required to
first conduct an inspection and for this purpose, the University
charges inspection fees as also affiliation fees from the respective
colleges. All the colleges in this batch of writ petitions have paid
the inspection fees for the inspection conducted as also the
affiliation fees for the affiliation granted.
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8. The G.S.T. law came into force w.e.f. 01.07.2017.
9. Recently, the respondent Nos.2 and 3 have raised demand
of G.S.T. on the affiliation fees and inspection fees from the 1st
respondent-University. Based upon the said demand, so raised
by the respondent Nos.2 and 3, the 1st respondent-University in
turn demanded payment of G.S.T. on the affiliation fees and
inspection fees paid by each of these petitioners before this
Court in the present batch of writ petitions. It is this demand
raised by the 1st respondent-University from the petitioner-
educational institutions which has led to filing of the present
writ petition.
10. At the time when the G.S.T. law was enacted, “Education
Service” was one of the subjects which was taxable under the
‘Heading No.9992’ as per notification dated 28.06.2017.
Subsequently, there were certain categories of services provided
by the educational institutions which stood exempted from levy
of G.S.T. It is this exemption of levy of G.S.T. upon certain
category of services rendered by the educational institutions as
per notification No.12 of 2017, dated 28.06.2017, which has
been heavily relied upon by the petitioners praying for allowing
of the writ petitions and quashment of the impugned demand
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notice raised by the 1st respondent-University for payment of
G.S.T.
11. Learned counsel for the petitioners contended that perusal
of Serial No.66 of Notification No.12 of 2017, dated 28.06.2017,
would show that the services provided by an educational
institution stands exempted from payment of G.S.T. He further
contended that the term “educational institution” has been
further defined in the same notification in Clause (y) of Section 2
of the G.S.T. Act. According to learned counsel for the
petitioners, in terms of the said definition, an institution
providing education services as a part of curriculum for
obtaining a qualification, would by itself bring within it the
University. In the process, the collection of fees towards
inspection and affiliation also would get exempted from levy of
G.S.T. In addition, he contended that the amendment brought
to Serial No.66 of the Notification No.12 of 2017, dated
28.06.2017, by incorporating Clause (aa) also would make it
emphatically clear that conduction of entrance examination and
collection of entrance fees also has been brought within the
exempted category and, thus, it would include affiliation and
inspection fees as well.
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12. In support of his contention, learned counsel for the
petitioners firstly relied upon a recent decision of a learned
Single Judge of the Karnataka High Court in M/s. Rajiv Gandhi
University of Health Sciences vs. Principal Additional
Director General, Directorate General of GST Intelligence
and others 1 and also in M/s.Bangalore University vs.
Principal Additional Director General, Directorate General of
GST Intelligence and others 2, wherein the learned Single Judge
allowed the said writ petitions by setting aside the show-cause
notice and also the consequent further actions as well, raised by
the University from the respective colleges.
13. Additionally, learned counsel for the petitioners also placed
reliance on the following decisions of the Hon’ble Apex Court in
The Principal and others vs. The Presiding Officer and
others 3, Chairman, Bhartia Education Society vs. State of
Himachal Pradesh 4 and Maharishi Markandeshwar Medical
College and Hospital vs. State of Himachal Pradesh 5.
1 W.P.No.57941 of 2018, decided on 26.07.2022 2 W.P.No.112 of 2019, decided on 26.07.2022 3 (1978) 1 S.C.C. 498 4 (2011) 4 S.C.C. 527 5 (2017) 6 S.C.C. 675 ::9:: PSK,J & LNA,J WP No.34617 of 2022 & batch
14. Learned counsel for the petitioners relied on the above
decisions to show that affiliation is intrinsically connected with
the educational institutions having affiliation from a particular
University. That since the object of the University also is to
ensure uniform curriculum and standards among the different
affiliated colleges imparting education on the same course. In the
instant case, it is the nursing course which is being imparted by
the petitioners herein, therefore, the 1st respondent-University
would also fall within the purview of ‘educational institution’ and
as such the petitioners would also be exempted from levy of
G.S.T. on the inspection fees and affiliation fees.
15. Learned counsel for the petitioners further contended that
in the event, the said fees becomes amenable to G.S.T. and if the
petitioners are made to pay G.S.T. on the inspection fees and
affiliation fees, the petitioner-Colleges would be compelled to
pass on the burden on the students who get admitted to the
respective colleges of the petitioners. Thus, in terms of Serial
No.66 of the notification No.12 of 2007, dated 28.06.2017, since
it exempts so far as the services rendered by the educational
institutions to the students, the petitioners should not be
compelled to pay G.S.T. on the inspection fees and the affiliation
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fees. It would also be detrimental to the interest of the students
who have meanwhile taken admission to the petitioner-Colleges.
16. Per contra, Mr. Dominic Fernandes, for Commercial Tax, for
respondent Nos.2 to 4, contended that the impugned demand
notice is one which is in fact raised by the 1st respondent-
University and the 1st respondent-University as such has not
disputed or denied payment of G.S.T. on the inspection fees or
affiliation fees.
17. Learned Special Standing Counsel for respondent-
Department further submitted that in terms of Notification No.11
of 2017, dated 28.06.2017, the Government had made it
expressly clear that under the ‘Heading – 9992’, the educational
institution is one which is taxable under the G.S.T. law. The
term ‘Education Service’ includes various components viz.,
affiliation fees, inspection fees and various other fees which is
collected both by the 1st respondent-University as also by the
respective colleges affiliated to the 1st respondent-University. It
was further contended that after making education service
taxable, the Government relaxed the same to some extent vide
Notification No.12 of 2017, dated 28.06.2017, and it is that
which is reflected upon in Serial No.66 of the said notification.
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Clause (a) of Serial No.66 under the same ‘Heading – 9992’
prescribing services provided by an educational institution to its
students, faculty and staff to be one under the exempted
category so far as the levy of tax is concerned.
18. According to learned counsel for the respondent-
Department, a plain reading of Serial No.66 (which was further
amended vide Notification No.2 of 2018, dated 25.01.2018)
would go to show that the collection of affiliation fees and
inspection fees does not stand exempted. It was the further
contention of learned counsel for the respondent-Department
that, in the 47th G.S.T. Council Meeting held on 28/ 29.06.2022,
one of the topic of discussion in their agenda was in respect of
the confusion that prevailed regarding the taxability of G.S.T. on
sale of application forms to the prospective students, issue of
migration, eligibility forms to graduate students, affiliation works
and other educational activities. In this context, the G.S.T.
Council had in its aforesaid meeting categorically resolved that
the services provided by the educational institutions to its
students, faculty and staff stands exempted vide Notification
No.12 of 2017, dated 28.06.2017.
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19. It was further resolved in the same meeting that so far as
collection of application fees for entrance examination and also
collection of fee for issuance of eligibility certificates and for
entrance examination and admission fees, etc., all would stand
exempted in terms of Notification No.12 of 2017, dated
28.06.2017. However, as regards issue of affiliation of
educational institutions with the Universities and Boards, etc., it
was resolved that the Circular issued by the Government of
India, Ministry of Finance, Department of Revenue, dated
17.06.2021, would be governing the field. As per Clause (4)(iii) of
the said Circular, G.S.T. @ 18% applies to such services provided
by the Board or University so far as accreditation to education
institutions is concerned
20. Learned counsel for the respondent-Department further
contended that the decisions rendered by learned Single Judge
of the Karnataka High Court in The Presiding Officer and
others (1 supra) and Chairman, Bhartia Education Society
(2 supra) (as was strongly harped upon by the learned counsel
for the petitioners) would not be applicable or come to the rescue
of the petitioners as proper material papers were not brought
before the said High Court at the time of disposal of the said writ
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petitions. That that the learned Single Judge had primarily
relied upon Clause 66D of the Finance Act, 1994 which had the
negative list of services upon which there would be no levy of tax.
21. The learned counsel for the respondent-Department further
brought to the notice of this Court that Sub-Clause (l) of the
Clause 66D of the Finance Act, 1994 already stood omitted by
way of Finance Act, 2016 w.e.f. 14.05.2016. The levy of G.S.T. is
under the provisions of the G.S.T. law which does not have any
such clause as was relied upon by the learned Single Judge of
the Karnataka High Court from the Finance Act, i.e., Clause
66D. Therefore, the said decisions are distinguishable both on
facts and also on law.
22. Having heard the contentions of learned counsel on either
side and on perusal of the records, what needs to be taken into
consideration for deciding the issue raised by the learned
counsel for the petitioners is the first notification that was issued
by the Government, i.e., Notification No.11 of 2017, dated
28.06.2017 which first reflected the description of the services
which would be taxable and also reflected the headings and the
rate of charges of G.S.T. upon each of the services notified
therein.
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23. Serial No.30 of Notification No.11 of 2017, dated
28.06.2017 is the head subject which is relevant for the decision
of this Court, which for ready reference is extracted hereunder :
Notification No.11/2017-Central Tax (Rate)
New Delhi, the 28th June, 2017
G.S.R…. (E) – In exercise of the powers conferred by sub-
section (1) of Section 9, sub-section (1) of Section 11, sub-section
(5) of section 15 and sub-section (1) of Section 16 of the Central
Goods and Services Tax Act, 2017 (12 of 2017), the Central
Government, on the recommendations of the Council, and on being
satisfied that it is necessary in the public interest so to do, hereby
notifies that the central tax, on the intra-State supply of services of
description as specified in column (3) of the Table below, falling
under Chapter, Section or Heading of scheme of classification of
services as specified in column (2), shall be levied at the rate as
specified in the corresponding entry in Column (4), subject to the
conditions as specified in the corresponding entry in Column (5) of
the said Table :-
Sl. Chapter, Description of Service Rate Condition
No. Section or (per cent)
Heading
… .. … …. … …
30 Heading 9992 Education services 9 –
24. From a plain reading of the above notification, it is
evidently clear that educational services have been particularly
held to be taxable.
25. It is now relevant to take note of the notification issued by
the Government of India granting exemption to certain services,
vide Notification No.12 of 2017-Central Tax (Rate), dated
28.06.2017, at Serial No.66, which again for ready reference is
reproduced hereunder, viz.,
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New Delhi, the 28th June, 2017
G.S.R…. (E) – In exercise of the powers conferred by sub-section
(1) of Section 11 of the Central Goods and Services Tax Act, 2017 (12 of
2017), the Central Government, on being satisfied that it is necessary in
the public interest so to do, on the recommendations of the Council,
hereby exempts the intra-State supply of services of description as
specified in column (3) of the Table below from so much of the central tax
leviable thereon under sub-section (1) of Section 9 of the said Act, as is in
excess of the said tax calculated at the rate as specified in the
corresponding entry in Column (4) of the said Table, unless specified
otherwise, subject to the relevant conditions as specified in the
corresponding entry in Column (5) of the said Table, viz.:-
Sl. Chapter, Description of Service Rate Condition
No. Section or (per cent)
Heading
… .. … …. … …
66 Heading 9992 Services provided – 9 –
(a) by an educational
institution to its students,
faculty and staff;
(b) to an educational
institution, by way of –
(i) transportation of
students, faculty and
staff;
(ii) catering, including any
mid-day meals scheme
sponsored by the Central
Government, State
Government or Union
territory;
(iii) security or cleaning or
house-keeping services
performed in such
educational institution;
(iv) services relating to
admission to, or conduct
of examination by, such
institution; upto higher
secondary;
Provided that
nothing contained in entry
(b) shall apply to an
educational institution
other than an institution
providing services by way
of pre-school education
and education up to
higher secondary school or
equivalent.
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26. The above notification stood amended vide Notification
No.2 of 2018, dated 25.01.2018, wherein Clause (aa) was also
inserted after Clause (a) under Serial No.66, which reads as
under :
“(o) against serial number 66, in the entry in column (3) –
(i) after item (a), the following item shall be inserted, viz.,
“(aa) by an educational institution by way of conduct of
entrance examination against consideration in the form of
entrance fee.”
27. The aforesaid amendment was brought by virtue of a
decision that was taken on the recommendations of the Council,
and the 25th meeting of G.S.T. Council held on 18.01.2018,
wherein certain exemptions / changes in the G.S.T. rates was
decided and one such item was in respect of the service relating
admission and conduction of examination. The decision of the
said Council is reproduced hereunder, viz.,
“(20) To exempt services relating to admission to, or
conduct of examination provided to all educational institutions, as
defined in the notification.
To exempt services by educational institution by way of
conduct of entrance examination against consideration in the form
of entrance fee.”
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28. If we read the provisions of G.S.T. law, the notification
No.11 of 2017, dated 28.06.2017, emphatically holds education
service to be one which is liable to tax. The relaxations granted
vide Notification No.12 of 2017 is confined to the services
rendered by the educational institutions to the students, faculty
and staff. It also grants exemption in respect of collection of fees
relating to entrance examination and other fees chargeable from
the students for admission or any such purpose. Nowhere has
the respondents declared or notified that charging of inspection
fees and the affiliation fees by the 1st respondent-University also
would fall within the exempted category. Under the taxing law,
unless there is a specific exemption granted specifically on
inspection fees and affiliation fees, the petitioners cannot be
permitted to claim exemption drawing an inference of the
affiliation and inspection fees both being part of the Notification
No.12 of 2017, dated 28.06.2017, and also being inter-linked to
the curriculum which is undertaken by the educational
institutions and the admissions derived therefrom.
29. The fact that the Notification No.11 of 2017, dated
28.06.2017, has a broader subject when it prescribes education
service and Notification No.12 of 2017, dated 28.06.2017,
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specifically enumerates specific services which stand exempted
and inspection and affiliation fees not reflected in the
Notification No.12 of 2017, dated 28.06.2017, the relief sought
for by the petitioners or the issue raised by the petitioners would
not be sustainable. Since there were certain handicaps and
confusions prevailing, the G.S.T. Council itself in its 47th G.S.T.
Council Meeting held on 28/29.06.2022 very categorically held
that as regards the question of granting exemption to the
affiliation and other fees collected by the 1st respondent-
University, it is the Circular dated 17.06.2021 issued by the
Government of India which would govern the field and clause (4)
thereof reads as under :
“4. Taking into account the above, the G.S.T. Council has
recommended, to clarify as below :
(i) G.S.T. is exempt on services provided by Central or State
Boards (including the boards such as NBE) by way of conduct of
examination for the students, including conduct of entrance
examination for admission to educational institution [under
S.No.66(aa) of Notif.No.12/2017-CT(R)]. Therefore, G.S.T. shall
not apply to any fee or any amount charged by such Boards for
conduct of such examinations including entrance examinations.
(ii) G.S.T. is also exempt on input services relating to
admission to, or conduct of examination, such as online testing
service, result publication, printing of notification for examination,
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Boards [under S.No.66(b)(iv) of Notif.No.12/2017-CT(R)].
(iii) G.S.T. at the rate of 18% applies to other services provided
by such Boards, namely of providing accreditation to an institution
or to a professional (accreditation fee or registration fee such as
fee for FMGE screening test) so as to authorize them to provide
their respective services.”
30. A plain reading of the said Clause (4) would give a clear
indication that, except for the exemption that has been
specifically enumerated in Notification No.12 of 2017, dated
28.06.2017, all other services rendered by educational
institutions and universities are taxable under the G.S.T. law.
Another fact which needs to be considered is that under the
Notification No.11 of 2017, dated 28.06.2017, (as has been
discussed earlier), the entire ‘education service’ itself is held to
be taxable under G.S.T. law, and if the Government intended to
exempt the educational institutions and universities from the
ambit of G.S.T. law, they would have simply, as in Notification
No.11 of 2017, incorporated ‘education service’ and would have
exempted the petitioners and the universities as well. However,
that is not the case.
31. Notification No.12 of 2017, dated 28.06.2017, which stood
amended further vide Notification No.2 of 2018, dated
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25.01.2018, specifically enumerates the specific nature of service
rendered by the educational institutions which would stand
exempted. Inspection and affiliation fees however is not
part of the said notification granting exemption. Yet another
aspect which needs to be considered is that Notification No.12 of
2017, dated 28.06.2017, provides for exemption of services
rendered by the educational institutions to three different
categories, i.e., students, faculty and staff. It does not deal with
the services rendered by the university to the educational
institutions. ‘Affiliation’ and ‘inspection’ is a service rendered by
the university to the educational institutions for which the
university had charged the respective educational institutions.
32. Surprisingly, in the instant case, as of now, the 1st
respondent-University does not seem to be aggrieved of the
demand raised by the respondent-Department so far as payment
of G.S.T. on the inspection and affiliation fees is concerned.
What is further necessary to be reflected at this juncture is that
the nature of service rendered by the 1st respondent-University
to the respective educational institutions is at a stage where the
admissions to the students have not commenced. It is at the
inception stage of the educational institutions that the
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inspection is conducted and the affiliation is thereafter granted.
The admission and the services rendered by the educational
institutions to the students, the faculty and the staff are all
services rendered subsequent to the affiliation. Therefore, the
contention that the petitioners have canvassed is hard to accept.
33. The Constitution Bench decision of the Hon’ble Apex Court
rendered in the case of Commissioner of Customs (Import),
Mumbai vs. M/s. Dilip Kumar and Company 6, dealing with the
situation where there is any doubt or confusion so far as
claiming of exemption is concerned (though there is none in the
present writ petition so far as this Bench is concerned) the
Hon’ble apex Court held at para Nos.48 to 51 as under :
“48. The next authority, which needs to be referred is
Mangalore Chemicals [Mangalore Chemicals and Fertilisers Ltd. v.
CCT, 1992 Supp (1) SCC 21] . As we have already made reference to
the same earlier, repetition of the same is not necessary. From the above
decisions, the following position of law would, therefore, be clear.
Exemptions from taxation have a tendency to increase the burden on the
other unexempted class of taxpayers. A person claiming exemption,
therefore, has to establish that his case squarely falls within the
exemption notification, and while doing so, a notification should be
construed against the subject in case of ambiguity.
6 (2018) 9 S.C.C. 1 (F.B.) (S.C.)
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49. The ratio in Mangalore Chemicals case [Mangalore
Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21] was
approved by a three-Judge Bench in Novopan India Ltd. v. CCE
[Novopan India Ltd. v. CCE, 1994 Supp (3) SCC 606] . In this case,
probably for the first time, the question was posed as to whether the
benefit of an exemption notification should go to the subject/assessee
when there is ambiguity. The three-Judge Bench, in the background of
English and Indian cases, in para 16, unanimously held as follows :
(SCC p. 614)
“16. We are, however, of the opinion that, on principle,
the decision of this Court in Mangalore Chemicals [Mangalore
Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21]
— and in Union of India v. Wood Papers Ltd. [Union of India
v. Wood Papers Ltd., (1990) 4 SCC 256 : 1990 SCC (Tax) 422]
, referred to therein — represents the correct view of law. The
principle that in case of ambiguity, a taxing statute should be
construed in favour of the assessee — assuming that the said
principle is good and sound — does not apply to the
construction of an exception or an exempting provision, they
have to be construed strictly. A person invoking an exception
or an exemption provision to relieve him of the tax liability
must establish clearly that he is covered by the said provision.
In case of doubt or ambiguity, benefit of it must go to the
State.”
50. In TISCO Ltd. v. State of Jharkhand [TISCO Ltd. v. State of
Jharkhand, (2005) 4 SCC 272] , which is another two-Judge Bench
decision, this Court laid down that eligibility clause in relation to
exemption notification must be given strict meaning and in para 44, it
was further held : (SCC pp. 289-290)
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WP No.34617 of 2022 & batch
“44. The principle that in the event a provision of fiscal
statute is obscure such construction which favours the assessee
may be adopted, would have no application to construction of
an exemption notification, as in such a case it is for the
assessee to show that he comes within the purview of
exemption (see Novopan India Ltd. v. CCE [Novopan India
Ltd. v. CCE, 1994 Supp (3) SCC 606] ).”
51. In Hari Chand case [CCE v. Hari Chand Shri Gopal,
(2011) 1 SCC 236] , as already discussed, the question was whether a
person claiming exemption is required to comply with the procedure
strictly to avail the benefit. The question posed and decided was indeed
different. The said decision, which we have already discussed supra,
however, indicates that while construing an exemption notification, the
Court has to distinguish the conditions which require strict compliance,
the non-compliance of which would render the assessee ineligible to
claim exemption and those which require substantial compliance to be
entitled for exemption. We are pointing out this aspect to dispel any
doubt about the legal position as explored in this decision. As already
concluded in para 50 above, we may reiterate that we are only
concerned in this case with a situation where there is ambiguity in an
exemption notification or exemption clause, in which event the benefit of
such ambiguity cannot be extended to the subject/assessee by applying
the principle that an obscure and/or ambiguity or doubtful fiscal statute
must receive a construction favouring the assessee. Both the situations
are different and while considering an exemption notification, the
distinction cannot be ignored.”
34. Relying upon the constitutional decision of the Hon’ble
Apex Court also, we are of the firm view that firstly, the
Notification No.12 of 2017, dated 28.06.2017, cannot be made
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WP No.34617 of 2022 & batch
applicable upon inspection and affiliation fees charged by the 1st
respondent-University from the educational institutions.
Secondly, since so far as inspection and affiliation fees charged
by the 1st respondent-University from the educational
institutions has not been specifically exempted in terms of the
Constitution Bench judgment in M/s. Dilip Kumar and
Company (6 supra), the said benefit cannot be extended to the
petitioners. As regards the two decisions rendered by the
Karnataka High Court in M/s. Rajiv Gandhi University of
Health Sciences (1 supra) and in M/s.Bangalore University
(2 supra), which was heavily relied upon by the learned counsel
for the petitioners, we are in complete agreement to the
contentions raised by the learned counsel for the respondent-
Department that the learned Single Judge of the Karnataka High
Court while passing orders in the aforesaid two decisions, has
relied upon the provisions of Finance Act, 1994 (Clause 66D).
Sub-Clause (l) of Clause 66D of the Finance Act, 1994 which in
fact, first of all, stood omitted by the Finance Act, 2016 w.e.f.
14.05.2016. Secondly, what also needs to be mentioned is that
under the G.S.T. law there is no such provision as Sub-Clause
(11) of Clause 66D of the Finance Act. Therefore, we are inclined
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WP No.34617 of 2022 & batch
to respectfully disagree with the view taken by the Karnataka
High Court in the aforesaid two decisions. Therefore, the said
decisions are distinguishable in facts and law.
35. For all the aforesaid reasons, we do not find any substance
in the contentions raised by the learned counsel for the
petitioners. Accordingly, the Writ Petition No.34617 of 2022
stands dismissed. Consequently, all the connected writ petitions
also stand dismissed. No costs.
36. As a sequel, miscellaneous petitions pending if any in these
writ petitions, shall stand closed.
_____________________________
P. SAM KOSHY, J
____________________________________
LAXMI NARAYANA ALISHETTY, J
Date : 17.10.2023
Note : LR copy to be marked
B/o.
Ndr/kkm