The Kerala High Court upheld an order whereby a Dental College, which is managed by an Educational Trust, was asked to take registration under the Kerala Value Added Tax Act, 2003, after noting that it was supplying food to students through a canteen.

The Revision Petitions before the High Court were preferred by the assessee against the common order of the Kerala Value Added Tax Appellate Tribunal, Additional Bench, Ernakulam.

The Division Bench of Justice A.K. Jayasankaran Nambiar and Justice Easwaran S. said, “When we read the definition “business” juxtaposed with the definition of a dealer, which, according to us, is inclusive enough to cover each and every activity done by a person, other than in due course of his business, the petitioner cannot contend that he will fall otherwise. Therefore, we are not in agreement with the submissions of the learned counsel for the revision petitioner that the revision petitioner is not required to take registration.”

Advocate P.N. Damodaran Namboodiri represented the Petitioner, while GP Resmitha Ramachandran represented the Respondent.

Factual Premise

M/s.Annoor Dental College was proceeded against under Section 67(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) for not taking registration under the said Act though they crossed the turnover limit for registration and also for not remitting VAT for the sales effected by the institution for the assessment years 2013-14 and 2014- 15. Aggrieved by the penalty orders for the assessment years 2013-14 and 2014-15, the assessee preferred appeals before the Deputy Commissioner (Appeals), who, in turn, set aside the impugned penalties and allowed the appeals.

The State approached the Kerala Value Added Tax Appellate Tribunal contending that the assessee cannot escape the mandatory requirement of registration under the KVAT Act, since they are supplying food to students through a canteen. Though the Dental College is managed by an education trust, named Annoor Educational Trust, they are running a dental college in the name Annoor Dental College, which is enjoying the benefits under Section 12AA of the Income Tax Act, 1961. The tribunal concluded that though the mess fees cannot be considered as sales, if the canteen sales are termed as mess fees, then such exemption is not allowable.

The Appellate Authority directed the assessee to take registration under the provisions of Sections 15 read with 6 of the Act and further directed the assessing authority to complete the assessment under Section 25(1). It was against the said finding that the assessee filed the Revision before the High Court.

Reasoning

The Bench, at the outset, observed that the revision petitions had to fail primarily on the ground that no substantial question of law arose for consideration. The tribunal had not decided any question against the assessee but had directed the authority to verify as to whether the mess fees are collected for the purpose of canteen sales. The Bench rejected the submission that the revision petitioner was not required to take registration.

The High Court found that though the sales across the counter in the canteen may be within the threshold limit, that by itself would not enable the revision petitioner to contend that it was not bound to take registration under the provisions of the KVAT Act. The tribunal had only remanded the matter back to the authorities to verify the question as to whether the canteen sales are being termed as mess fees. “The liability to pay tax would definitely depend upon the verification ordered to be conducted by the tribunal. This is precisely the reason why we started the judgment by opining that no substantial question of law arises for consideration before us in these revisions”, it said.

Finding that no substantial question of law arose for consideration, the Bench dismissed the revision petitions.

Cause Title: M/S. Annoor Dental College v. The State Of Kerala (Neutral Citation: 2025:KER:31073)

Appearance:

Petitioners: Advocates P.N. Damodaran Namboodiri, Hrithwik D. Namboothiri

Respondents: GP Resmitha Ramachandran

Click here to read/download Order


Kerala High CourtJustice AK Jayasankaran NambiarJustice Easwaran S.

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.