Bombay High Court Directs Authorities To Answer Specific Question Regarding Tax Registration And Exemption

Bombay High Court Directs Authorities To Answer Specific Question Regarding Tax Registration And Exemption

The Court opined that the authorities ought to have considered the contention of the Petitioner – Society that the Society imparted education through its Special Purpose Vehicl

The Bombay High Court directed the Respondent – Authorities to answer the specific question posed by the Petitioner – Society and remanded[AJ1] the matter to the Maharashtra Authority for Advance Ruling, for fresh consideration

The matter titled Kasturba Health Society v Union of India & Ors was placed before the Division Bench of the High Court of Bombay, comprising Justices Sunil B. Shukre and Anil S. Kilor.

The whole crux of this petition was whether the Petitioner – Society imparting education was exempt from the requirement of registration and tax liability under the Central Goods and Service Tax Act, 2017 as it was duly registered as a 'Society' under the Societies Registration Act, 1860 and also as a 'Charitable Institution', duly registered under the Maharashtra Public Trusts Act, 1950. The present petition was filed as the Maharashtra Appellate Authority for Advance Ruling for Goods and Service Tax held that the Petitioner – Society could not be termed as 'educational institution' and therefore, would not be entitled to seek any exemption from the requirement of registration and tax liability since the Mahatma Gandhi Institute of Medical Sciences (MGIMS) which was run by the Petitioner – Society was the entity which actually imparted education.

The Petitioner – Society submitted the order did not really consider the basic question as to whether or not the Petitioner – Society on its own strength and without any reference to MGIMS could be considered to be an 'educational institution' and therefore, there was no application of mind while passing such order. However, the Respondent – Authorities submitted that there was no need to make any interference to the order as proper consideration was given to the issue raised by the Petitioner – Society.

The Court went through the order and found that the answer to the basic question raised by the Petitioner – Society was not answered by the Respondent – Authorities. It further minutely pointed out that the order was passed on the ground that the Petitioner – Society was not an 'educational institution' because the activity of imparting education was not carried by the Petitioner – Society in actual terms, but by its Special Purpose Vehicle - MGIMS.

The Court opined that the authorities ought to have considered the contention of the Petitioner – Society that the Society imparted education through its Special Purpose Vehicle – MGIMS, which would make it eligible to be termed as 'educational institution' and therefore, entitled for seeking exemption from the requirement of registration and GST liability.

Therefore, the order was found to be erroneous by the Court and it further directed the Respondent – Authorities to answer the question posed by the Petitioner – Society by remanding the matter to the Maharashtra Authority for Advance Ruling, for fresh consideration.