M/s. Mahatma Gandhi Kashi Vidyapeeth vs. State of U.P. [2013] 64 VST 271 (All)

FACTS
The
petitioner, a university, established under the provisions of the U.P.
State Universities Act, 1973 with aim and object to impart education in
various disciplines of higher education and research and also, what its
name suggests, imparting education from its campus at Varanasi and
affiliated colleges, had filed writ petition before the Allahabad High
Court to challenge the notice issued by the Deputy Commissioner of
Commercial Tax, Sector 11, Varanasi, asking it to produce the account
books as information available with him was that the petitioner had sold
forms worth Rs. 8,05,400, but has not paid VAT under the provisions of
the U.P. Value Added Tax Act, 2008, as the action of the respondents
calling upon the petitioner to produce account books with regard to the
printing and sale of test forms or initiation of proceedings under the
said Act, is wholly without jurisdiction and uncalled for.

HELD
Whether
the main activity of the petitioner was business or not, was the
decisive factor to answer the questionwhether the person was dealer for
incidental or ancillary activity. If the main activity of a person is
not business activity, then, such person would not be a dealer for
incidental or ancillary transaction/s. Imparting of education was a
mission. Right to education, in the context of article 45, 41 meant (a)
every child/citizen of this country had a right to free education, until
he completes the age of fourteen years; and (b) if a child or citizen
completes the age of 14 years, the State shall make effective provision
for securing the right to work and education within the limits of its
economic capacity and development. In ancient time, there were Gurukul
Ashrams to impart education. The importance of education has been
recognised by the Indian Courts from time to time. Education is perhaps
most important function of State and Local Self Governments. It is
unthinkable and beyond imagination to treat the imparting of education
as business. The relationship in between teacher and one taught is not a
business relation. The idea and purpose of imparting education is to
develop personality of the students to carry the nation forward and in
right direction. Accordingly, the High Court held that the petitioner is
not a dealer within the meaning of section 2(h) of the Act, therefore,
its activity of printing and selling of admission forms to the students
does not amount to business within the meaning of section 2(e) of the
Act. The petitioner, being beyond the purview of the U.P. VAT Act, could
not be compelled to obtain registration under the said Act or to
produce its account books before the respondents. The impugned notice
and orders passed by the authorities under the U.P. VAT Act are palpably
illegal and without jurisdiction and cannot be allowed to stand. In the
result, the writ petition filed by the petitioner was allowed.