Manonmaniam Sundaranar University Vs Joint Director (GST Intelligence) (Madras High Court)
The University is renting the property to other institutions and collecting rent from them. Therefore, the second respondent was justified in raising demand for the said service. However, there is no justification in levying penalty. The assessee is not a private entity. The respondents do not allege forgery or misrepresentation. I sustain the impugned order in so far as the demand for payment of Service Tax on renting of immovable property is concerned. In all other respects, it is quashed. The writ petition is partly allowed. No costs. Consequently, connected miscellaneous petitions are closed.
FULL TEXT OF THE JUDGMENT/ORDER of MADRAS HIGH COURT
Heard the learned counsel appearing for the writ petitioner and the learned Standing counsel appearing for the respondents.
2. The petitioner is an University established by the Manonmaniam Sundaranar University Act, 1990. The second respondent issued notice dated 23.10.2018 calling upon the petitioner University to show cause as to why certain sums of money should not be paid by them towards service tax. It was also proposed to levy interest and penalty on the said principal amount. The show cause notice alleges that the petitioner had been collecting affiliation fees, inspection fees and other fees etc. from the affiliated colleges and charges by way of renting of immovable properties. The stand of the authority is that the University has been rendering service to the affiliated colleges also. Therefore, the fees collected by the University ought to have been reflected in the returns filed by the petitioner University. The second respondent also took objection that the petitioner did not even bother to register themselves as an assessee for the purpose of payment of Service Tax. The petitioner offered their objections. Not satisfied with them, the impugned order came to be passed confirming the proposals set out in the show cause notice. The said order is assailed in the writ petition.
3. The respondents have filed a detailed counter affidavit. In the said counter affidavit, the stand taken by the second respondent in the impugned order is The learned Standing counsel took me through the averments set out in the counter affidavit and called upon this Court to sustain the impugned order and dismiss this writ petition.
4. I carefully considered the rival contentions and also went through the materials on record.
5. The learned counsel appearing for the petitioner drew my attention to the Circular No.89/7/2006-ST dated 18.12.2006 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs. The said Circular reads as follows:-
