Educational Initiatives Pvt. Ltd. Vs Union of India (Gujarat High Court)
The writ-applicant claimed that the services provided by it to the schools/education organizations in relation to the ASSET examination is exempted from the payment of the GST under the Entry No. 66(b)(iv) of the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 as well as the equivalent SGST under the Entry No.69(b)(iv) of the Notification No.9/2017-Integrated Tax (Rate) dated 28th June 2017.
The writ-applicant has entered into contracts with various schools to provide education upto the higher secondary school. The schools have made it mandatory for their students to take up the Assessment of Scholastic Skill Through Educational Testing (ASSET) exams, which are being conducted by the schools in their own premises and the marks obtained in the ASSET are considered and given due weightage to the students ASSET score in the semester and the final examination results. The writ-applicant would set and prepare the question papers which are either paper version or online version. The evaluation of the answers is done by the writ-applicant. The students are enrolled with the schools.
When the appellate authority says that the schools are not conducting the ASSET, or rather, the schools are facilitating the writ-applicant to conduct the ASSET, for which the schools get some remuneration towards the administration cost, it is thereby trying to erroneously convey that instead of the writ-applicant providing services to the schools, the schools are providing services to the writ-applicant, for which the schools receive ‘administration cost’.
Indisputably, the question papers are set by the writ-applicant and the answers given by the students are assessed by the writ-applicant and the result of the ASSET is also prepared by the writ-applicant. The basic nature of the ASSET service is an examination to be conducted by the Educational Institution (School) but outsourced to the Educational Initiatives (EI). The observations made by the AAR in para 21.1 of its order clinches the issue.
It is now well-settled that even in tax statutes, an exemption provision should be liberally construed in accordance with the object sought to be achieved if such provision is to grant incentive for promoting education or otherwise has some beneficial reason behind it. The exemption notification should be given a literal meaning. The recourse to other principles or canons of interpretation of statute should be resorted to only in the event the same give rise to anomaly or absurdity. As observed earlier, the exemption notification must be construed having regard to the purpose and object it seeks to achieve. The notification in the case on hand should be read as a whole.
We are of the view that there need not be any further debate on the question, whether the services provided by the writ-applicant to the schools, which are educational institutions, fall within the meaning of the aforesaid notifications. The services, definitely, in our view, fall within the two notifications referred to above.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs :
“(a) That this Hon’ble Court may be pleased to issue writ of certiorari or a writ in the nature of certiorari, or any other appropriate writ, quash and set aside the impugned order and decision dated 07.09.2021 passed by the Gujarat Appellate Authority for Advance is erroneous in law;
(b) This Hon’ble Court may declare that the services provided by the petitioner to school/educational organization in relation to ASSET examination is exempted from payment of GST under Entry No.66(b)(iv) of the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 as well as equivalent SGST Notification and Entry No.69(b)(iv) of Notification No.9/2017-Integrated Tax (Rate) dated 28th June 2017. and not liable to pay GST is just and proper;
(c) That this Hon’ble Court may be pleased to issue a writ of prohibition, or a writ in the nature of prohibition, or any other appropriate writ, order or direction, directing the respondents, their officers, employees not to initiate any actions for recovery of GST or any other liability on account of services provided by the petitioner to school/educational organization in relation to ASSET examinations for nonpayment of GST;
(d) Ad-interim relief in terms of prayer C above;
(e) costs of the petition be provided for;
(f) for such further and other reliefs, as this Hon’ble Court may deem fit and proper in the nature and circumstances of the case may require.”
2. The facts giving rise to this writ-application may be summarised as under :
2(1) The writ-applicant is a private limited company registered under the provisions of the Companies Act, 1956 (for short, the ‘Act 1956’). The company has been registered under the Goods and Services Tax Act, 2017 (for short, the ‘Act 2017’). The company deals in the products and solutions mainly intended to be used by the K-12 education segment, i.e. the primary and secondary schools for the assessment and learning. The company has been working with the private schools, public schools and organizations like the World Bank, Google, Azim Premji Foundation, etc. and has undertaken large scale assessment projects with various State Governments.
2(2) The writ-applicant filed an application under Section 97 of the CGST Act, 2017 and Section 96 of the GGST Act, 2017 respectively for Advance Ruling in the Form GST ARA-01.
2(3) The writ-applicant sought a declaration from the Gujarat Authority for the Advance Ruling that the services provided by it to the schools/education organizations in relation to the ASSET examination is exempted from the payment of the GST under the Entry No.66(b)(iv) of the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 as well as the equivalent SGST under the Entry No.69(b)(iv) of the Notification No.9/2017-Integrated Tax (Rate) dated 28th June 2017.
NATURE OF THE BUSINESS TRANSACTIONS :
2(4) The writ-applicant has entered into contracts with various schools to provide education upto the higher secondary school. The schools have made it mandatory for their students to take up the Assessment of Scholastic Skill Through Educational Testing (ASSET) exams, which are being conducted by the schools in their own premises and the marks obtained in the ASSET are considered and given due weightage to the students ASSET score in the semester and the final examination results. The writ-applicant would set and prepare the question papers which are either paper version or online version. The evaluation of the answers is done by the writ-applicant. The students are enrolled with the schools.
2(5) The Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 reads thus :
“Government of India
Ministry of Finance
(Department of Revenue)
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, namely:—
