Facts of the Case

The petitioner, Bundelkhand University, Kanpur Road, Jhansi, filed a writ petition challenging the show cause notices dated 30.07.2022 and 17.08.2022 issued by the GST authorities. The University contended that GST cannot be levied on affiliation fees collected from affiliated colleges, as such fees are exempt being charges connected with imparting education.

The petitioner directly approached the High Court seeking quashing of the show cause notices instead of submitting its objections before the adjudicating authority.

Issues Involved

  1. Whether GST is leviable on affiliation fees collected by a State University from affiliated colleges.
  2. Whether affiliation fees qualify as fees for imparting education and are therefore exempt from GST.
  3. Whether a writ petition is maintainable against mere show cause notices without first responding before the competent authority.

Petitioner’s Arguments

  • The petitioner submitted that affiliation fees charged from colleges are exempt from GST, as they are intrinsically connected with the activity of imparting education.
  • It was argued that the impugned show cause notices were unsustainable and liable to be quashed by the High Court.

Respondent’s Arguments

  • The respondents maintained that the proceedings were only at the show cause notice stage.
  • The petitioner had an effective opportunity to raise all legal and factual objections before the competent adjudicating authority by filing a reply to the notices.

Court Order / Findings

The High Court observed that the notices under challenge were only show cause notices and no final adjudication had yet taken place.

The Court held that the petitioner is at liberty to raise the contention regarding GST exemption on affiliation fees before the competent authority while responding to the show cause notices.

Since an effective statutory remedy was available, the Court declined to interfere in writ jurisdiction at the show cause notice stage and dismissed the writ petition.

Important Clarification

  • Courts ordinarily do not interfere with show cause notices unless exceptional circumstances exist.
  • Questions regarding GST liability or exemption on affiliation fees charged by universities should ordinarily be examined by the adjudicating authority during assessment proceedings.
  • The petitioner retains the right to raise all legal objections before the competent authority.

Sections Involved

  • Section 73 of the Central Goods and Services Tax Act, 2017 – Determination of tax not paid, short paid, erroneously refunded or input tax credit wrongly availed or utilized (where there is no fraud, wilful misstatement or suppression).
  • Article 226 of the Constitution of India – Writ Jurisdiction of the High Court.

Link to download the order - https://mytaxexpert.co.in/uploads/1782889764_206compressed.pdf

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