Jaypee University of Information Technology Vs State of H. P. & Ors. (Himachal Pradesh High Court)
Himachal Pradesh High Court held that petitioner/ university is not liable to pay taxes on supply of food stuff and other items to students since ancillary activities of providing canteen facilities to the inmates of the University would not amount to business as defined by the Act.
Facts- The petitioner is a private university established with the object of imparting technical education to the students. Due to non-availability of market for the regular consumers in the vicinity of the University, it was considered essential to establish facility in the University to cater to the need of the students community. Thus, University has established a mess, named as “Annapoorna”, which is spread over three premises.
On 06.03.2013 a team of officers from respondents-department visited the University premises of the Petitioner. The Petitioner was required to produce the information regarding the Mess facility. The respondents’ officer without affording any opportunity of being heard, instantly proceeded in a very hasty manner to impose VAT u/s. 21(7) of Himachal Pradesh Value Added Tax Act 2005 to the tune of 38,17,348/-.
Conclusion- Held that in the present case, there is no material to establish that the ancillary activities of providing canteen facilities to the children is being conducted by the petitioner(s) with an independent intention to conduct business with such activities. Therefore, in the present case, the ancillary activities of providing canteen facilities to the inmates of the University would not amount to business as defined by the Act. Once that be so, obviously, the petitioner was not liable to pay any tax on the said activities.
