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.