Kerala HC Sets Aside Composite GST SCN against Self-Financing Pharmacy Colleges Association [Read Order]

The Kerala HighCourt recently set aside a show cause notice (SCN) issued against the Kerala State Self-Financing B.Pharm College Management Association (KSSBCMA), noting that the SCN was a composite notice and covered multiple assessment years.

The petitioner association is constituted by the managements of 36 self-financing pharmacy colleges in Kerala and is registered under the Societies Registration Act. The member institutions conduct a separate selection process for admission to pharmacy courses offered by them.

The present dispute arose after an Intelligence Officer of the Kerala State GST Department issued SCN proposing to assess the petitioner to tax and impose penalty on the basis that the petitioner was liable for GST registration, whereas the petitioner contended that its activities were exempt under entry 66(b)(iv) of Notification No. 12/2017.

Ammu Charles and K.Srikumar appearing for the petitioner stated that the preliminary question to be considered is whether the petitioner is liable to take registration under the GST Act, and if so, whether they are liable to be assessed.

However, the impugned SCN had already concluded that the petitioner was liable to take registration under the GST Act and liable to pay tax and penalty.

Further, the petitioner argued that the impugned SCN was legally unsustainable as it was issued as a composite notice for multiple assessment years.

Government Pleader Arun Ajay Shankar opposed the contentions of the petitioner.

Justice Ziyad Rahman A.A. found merit in the petitioner’s contention regarding the composite nature of the notice. The Court observed that the impugned SCN covered multiple assessment years in a single proceeding, which rendered it unsustainable in law.

Justice Rahman noted that the notice was liable to be set aside on this ground alone itself, and thus the Court refrained from making any further observations on the merits of the case, including the question of whether the petitioner was liable to obtain GST registration or entitled to exemption under the relevant notification.

The High Court clarified that it would be open to the department to initiate fresh proceedings by issuing separate show cause notices in accordance with law. It further noted that all contentions, including those relating to exemption and registration, may be raised by the petitioner before the competent authority, which shall consider the same independently during adjudication.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates