The Madhya Pradesh High Court while quashing the order demanding Service Tax against the Professional Examination Board ruled that that it is a statutory body. Earlier, the AO observed that it is an autonomous body and is liable to pay service tax for the services rendered by them.
The AO initiated assessment proceedings against the petitioner and had raised demands for four separate years. The petitioners impugned the demand on ground that the establishment is treated to be an autonomous body incorporated by the statutory provision and functioning within the State of Madhya Pradesh.
The petitioners urged that that even though the Madhya Pradesh Vyavshayik Pariksha Mandal Adhiniyam, 2007 was enacted by the State Government for constituting the Madhya Pradesh Professional Examination Board, but, as the notification under Section 3 of the Adhiniyam, 2007 was not issued.
The Division Bench in the case of Pratibha Singh (supra) has been that the Professional Examination Board is not constituted under the Adhiniyam, 2007 and, therefore, it continues to be constituted and function as a department of the State by virtue of the notification issued on 17.04.1982 and again on 22.01.2004.
The bench, diving deeply into the facts of the case, found that it is prima facie seems that the findings recorded in Revenue that it is not a department of the State but is an autonomous body seems to be incorrect. According to the bench, the case needs a fresh consideration and therefore, the matter is liable to be remit back to the AO.
Quashing the order, the division bench comprising of Acting Chief Justice Rajendra Menon and Justice Anjuli Palo said, “in treating the petitioner organization to be an autonomous corporation created under the Adhiniyam, 2007 and rejecting the objection that it is not a department of the State, the respondent No.2 has committed an error and this has been done without taking note of the legal aspect of the matter as indicated here-in-above.”
Read the full text of the order below.
