Order Date: 26 July 2022

Facts-

• The Petitioner, M/s Bangalore University is in receipt of certain amounts collected by way of affiliation fee from Institutions affiliated to it.
• A show cause notice issued proposing to levy service tax on the affiliation fee collected by the petitioner.
•  The  petitioner submitted that the  affiliation fee received by the petitioner University is exempted from service tax and further that Authorities does not have the jurisdiction to issue show cause notice proposing to levy service tax on it.
• Respondent contended that the affiliation fee received by the Petitioner University cannot be considered as part of the said services and that it is a consideration received towards the services provided to private Institutions by affiliating the same.
• Being aggrieved, the petitioner filed the instant writ petition.

Issue-

• Whether the petitioner is entitled to approach this Court merely on the issuance of show cause notice? 

Order-

• The Hon’ble High Court observed that the act of University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the respondents to consider otherwise is erroneous.
• The Court further observed that normally, a person is bound to reply to the show cause notice issued by the Authority and it is not appropriate for him to approach the Court without doing the same. 
• However, in the instant case, the dispute does not pertain to quantification of service tax, but whether the respondents Authorities have jurisdiction to demand service tax for the activity of Petitioner University in providing education. Further, it is the clear stand of the respondents Authorities before this Court that the activity of the petitioner Institution in granting affiliation to Colleges and consideration received towards it is taxable under the Service Tax.
• Under the circumstances, it is not appropriate to relegate the petitioner before the adjudicating Authority.
• The show cause notice to the writ petition and consequently, all further actions pursuant to the said show cause notice is set aside.