Important Point - There are inbuilt safeguards and checks on the power to recover the tax in the Act itself.

S.C. Dharmadhikari, J.

1. By this petition under Article 226 of the Constitution of India, the petitioner seeks a writ of mandamus or any other writ, order or direction in the nature thereof so as to declare that the explanation added to section 65(105)(zzc) by the Finance Act 14 of 2010 dated 8th May, 2010 with retrospective effect from 1st July, 2003 is unconstitutional and ultra vires Article 14 of the Constitution of India.

2. The petitioner before us proceeds on the footing that the above explanation is added to section 65(26) and (27) of the Finance Act, 1994. Rather, it is an explanation added to the definition of the term “taxable service”. We are concerned with that part. The term that is defined for the purpose of understanding a taxable service, namely “commercial training or coaching”, “commercial training or coaching centre”. That is evident from a reading of the Act itself, is for the purpose of the expressions, which are used in the term “taxable service”. It is that expression which refers to the commercial training or coaching centre.

3. Therefore, the Board of Excise and Customs ("CBEC" for short) may be making a reference to section 65(26) and (27), but the explanation is not added thereto.

4. The petitioner before us is a Trust registered under the Bombay Public Trust Act, 1950. The petitioner Trust claims that it provides, not necessarily by charging a fee, the necessary training and coaching so as to enable the students to appear for the Indian Administrative Services and other civil services examinations.

5. The petitioner states that in terms of a brochure, copy of which is annexed as Annexure 'B' to the petition, the Trust carries on the activities and more particularly set out in the said brochure. The brochure shows as to how the petitioner Trust has conceived the courses for complete development. In fact, a complete development centre for self motivated youth is what is essentially spelt out from these activities. The courses are for UPSC examination, MPSC examination etc. The brochure would indicate as to how this Trust enables these students to gain a certain degree of confidence and face these competitive examinations. The petitioner points out that profit generation is not the motive or the main or predominant aim. Therefore, admission to the institution is never denied at any time on the ground that the student is not in a position to pay the fees. The particulars of students enrolled in the last three years have been set out in Annexure 'C' to the petition. Thus, the case of the petitioner is that it cannot fall within the net of service tax. However, on 27th August, 2010, a letter was addressed by the Superintendent of Central Excise, Pune-III to the petitioner, copy of which is annexed as Annexure 'D' to the petition. This letter refers to a circular dated 28th January, 2009 of the Central Board of Excise and Customs. That circular refers to the levy of service tax on educational institutions. The letter refers to the amendment in regard to non-levy of service tax on institutions, which are not profit making. However, after the Finance Act of 2010, an explanation has been inserted as set out above. That has been inserted with retrospective effect. It is in these circumstances that the attention of the petitioner was invited to this amendment and the petitioner was called upon to furnish the details of the fees collected for the respective courses from 2005-06. The petitioner also refers to a letter dated 15th October, 2009. Thus, these were all reminders to the petitioner. The petitioner responded to the same by addressing a letter dated 28th October, 2010 and giving the information as demanded. The petitioner placed on record two points for consideration of the authority, namely that the petitioner is a educational public Trust and hence, service tax was not leviable on its activities, at least in 2010. This point was previously discussed with the officers of the second respondent whil