ORDER

Heard the learned counsel for the petitioner, learned standing counsel for R1 and the learned counsel for the second respondent.

2.The petitioner is engaged in the field of construction business.

During the period from 01.04.2011 to 31.03.2013, the petitioner had carried out civil contract works for the second respondent. The petitioner is said to have constructed the school hostel building and the library building during the said period. The petitioner had registered himself as a provider of commercial and industrial construction services. Since the petitioner was under the impression that the second respondent is a educational trust and he had only put up educational buildings, he is not obliged to reflect the same in his returns or pay any service tax on the contract value received by him. However, the first respondent had a different perception. The first respondent issued notice dated 18.04.2013 for the period from April 2011 to March 2012 proposing to levy service tax together with penalty on the petitioner for the aforesaid work. The first respondent issued another show cause notice dated 19.05.2014 for the period from 01.04.2012 to 31.03.2013. The petitioner submitted his reply dated 27.05.2014 in response to the same. Rejecting the stand taken by the petitioner, the first respondent proceeded to hold that transaction in question is also amenable to levy of service tax and to that effect, issued the composite order dated 17.12.2014 covering both the periods, confirming the proposal set out in the two show cause notices.

Challenging the same, the present writ petition came to be filed.

3.The first respondent has filed a detailed counter affidavit opposing the writ prayer. The standing counsel took me through the averments set out therein. It is also submitted that since the petitioner is having an effective alternative remedy of appeal, the present writ petition has to be dismissed on the ground of non exhaustion of alternative remedy. The learned counsel appearing for the second respondent submitted that the second respondent has been unnecessarily impleaded in the writ petition and that the matter is one between the petitioner and the first respondent.

4.I carefully considered the rival contentions and went through the materials on record. The petitioner had carried out the contract works for the second respondent. There is no doubt that the second respondent is an educational trust that is enjoying exemption under the Income Tax Act. The petitioner's stand from the beginning is that the service provided to such an educational trust cannot be called as commercial or industrial service.

5.The petitioner's counsel drew my attention to the decision of the Hon'ble Supreme Court reported in 2015 372 ITR 699(SC) (M/s.Queen's Educational Society Vs. Commissioner of Income Tax). The Hon'ble Supreme Court, in the aforesaid decision, had summarized the applicable principles in the following terms:-

“Thus, the law common to Section 10(23C) (iiiad) and (vi)

may be summed up as follows:

(1) Where an educational institution carries on the activity of education primarily for education persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit.

(2) The predominant object test must be applied the purpose of education should not be submerged by a profit-making motive.

(3) A distinction must be drawn between the making of a surplus and an institution being carried on for profit. No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit.

(4) If after meeting expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes.

(5) The ultimate test is whether on an overall view of the matter in the concerned assesment year the object is to make pro