Service Tax Refund Claims by Aviation Students: Allahabad HC Directs Academy to Address Matter [Read Order]

The Allahabad High Court has directed the Indira Gandhi Rashtriya Uran Akademi, which is an aviation academy, to address the service tax refund claims made by its students.

In this case, the former students of Indira Gandhi Rashtriya Uran Akademi have approached the high court seeking the above-mentioned institution to refund the petitioners the service tax along with interest.

The petitioners had been admitted to the institute after 2010, and during that period, service tax was levied upon all such aircraft training institutes across the country, and it was levied on the respondent institution also.

The Indian Institute of Aircraft Engineering challenged this through a writ petition before the Delhi High Court, which, by its judgement dated 21-05-2013, held the imposition of service tax to be contrary to Section 65(27) of the Finance Act, 1994, and the notification dated 25.04.2011. The Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) New Delhi allowed several appeals, including Appeal No. 58 of 2012 by the opposite party, in line with the Delhi High Court's judgement.

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It was submitted by the petitioner’s counsel that based on the Delhi High Court judgment, various appeals and cases have upheld that the service tax should not have been collected from such institutes. Due to this, the petitioners have claimed a refund from the institution.

 It is interesting to note that the institution had sent letters to various students stating the reason why the respondents have deferred the application of such students for refund only on the ground that such an amount can be refunded only after the same is receipt from the department, thereby impliedly admitting that such a tax was in fact realised by the students.

The High Court, comprising Justice Manish Mathur,  granted liberty to the petitioners to file a fresh application or representation either physically or by email, for a refund of the service tax. The respondents were directed to decide the matter within two months of receiving the representation, along with a copy of this order, particularly examining whether the tax was included in the petitioners' fees, in line with the Delhi High Court judgment.

To Read the full text of the Order CLICK HERE

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