An open letter to the GNLU Director – Dr. Bimal N Patel


Dear Bimal Patel Ji,

I have always held you and your institution in high esteem. I still vividly remember doing a story in 2011, while I was covering CLAT, which indicated the GNLU as the biggest gainer of CLAT 2011. I have even advised many CLAT aspirants to opt for the GNLU above many other law schools, since I strongly felt  that, the GNLU would emerge as one of the best law schools in the country considering the pace of its growth. I admire the steps you have been taking to make the GNLU a truly world class University in the next five years.

However, I feel the year 2012 has not been good for GNLU and its growth. A lot of things have brought GNLU in news for the wrong reasons which the administration could have avoided.

CLAT aspirant, Donnie Ashok, had to file a writ petition in the Gujarat High Court against the GNLU for refusing him admission to the university on the ground that he did not clear the 10+2 exam in his first attempt. The High Court had directed GNLU and the CLAT convenor to keep one seat vacant at GNLU. However, the matter was later amicably settled and Donnie was granted a seat. GNLU could have avoided this litigation and the cost involved had the GNLU considered the merits of Donnie’s case earlier within the system; which the GNLU did not do.

Few months later  GNLU was in the news for making 189 of its students to contribute 4 hours of community work, viz. gardening, weeding, watering plants, planting trees for attending a party without ‘authorisation’ from the college authorities. Personally I have felt this to be an invasion on the privacy of the students. The administration has nothing to do with the personal life of students outside the campus. I am sure that the students of the GNLU are capable of choosing between right and wrong.

Again the GNLU was in the news for alleged arbitrary admissions. As per the report of Times of India, a senior forest official had alleged that the University was following arbitrary rules and regulations in the admission process thereby doing injustice to students who deserve admission on the basis of merit. It is often alleged that though the Review Commission was appointed to plan and execute the list of criteria to make GNLU, a true world class University in the next five years; what fuelled the immediate formation of the Review Committee was the TOI report regarding arbitrary admissions.

Allegedly 400+ students had submitted a Petition to the Review Committee, a copy of which is with me. I was terribly disappointed after reading the Petition. The students raised issues about non appointment of a permanent Registrar, need for a students’ association, mandatory PSU internship, examination rules, back door admissions and a lot of other things. Once, you told me during a telephone conversation on this petition, “See the issue is not about a Bimal or a Raghul but the University”. Considering and respecting that fact, I have not let the report out in the media and have only made a brief reference about the same in a report which I did recently.

The petition also raised the issues relating to detention and goodness marks norms which has been quashed by Gujarat High Court.

It was sad for me to learn that you were filing an appeal against the order of the learned single Judge. The Court while setting aside the goodness mark norm mentioned that, “by including this ‘Goodness’ marks condition, the University has “given a tool in the hands of the faculty members, which could be used by them at their own whims and caprice. Such discretionary power in the hands of the faculty members would change the atmosphere of the college like for bad where everything would be under the command and control of the faculty members and the students would refrain from a free discussion in the class-room with the fear that if their view-point annoys the concerned faculty then it would weigh against them at the time of awarding the “goodness” marks. Such discretionary power is against the spirit of education”.

It is also a disheartening fact that the expenses for pursuing litigation are being met out of University exchequer when the said amount could be used for other fruitful purposes like development of infrastructure or for providing fee concession to under privileged kids who enter the law schools.

I am in full agreement with the view of the learned single Judge regarding the detention norms and goodness mark norm that the same should be quashed. These two rules will only be a blot on free academic atmosphere that a law university like GNLU asserts to guarantee. Hence, I humbly request you to honour the decision of the learned single judge of the Gujarat High Court and withdraw the appeal you have filed. I sincerely hope that the matter is amicably settled and GNLU emerges as the best legal institution of the country in the years to come. As you rightly pointed out, the issue is not about a person but about the University!

Best Regards,
Raghul Sudheesh

Image Courtesy: Bar & Bench

Service Tax in Restaurants - What the law really says!


On Saturday, November 3, 2012, The Delhi High Court Bar Association published a notice titled “Service and Service Tax!” (shown above in the image). The notice contained averments claiming that restaurants in India were incorrectly charging 4.94% service tax on the total bill of a customer and that service tax payable at a restaurant is only payable on the ‘service charge’ component of the Bill. The contents of the notice were also spread among lawyers and law students across the country via Facebook and tax law related websites such as CAClubIndia etc. This news spread like wildfire and became very popular online since the averments indicated overt defraudment of the public and many people resorted to expressing their resentment about the same on social media sites, under the impression that the contents of the notice were based on the correct position of law.

At the outset, I’d like to make it clear that the notice has been made based on an incorrect interpretation of the Service Tax (Determination of Value) Rules, 2006 and that this would be evident if one merely looked at the relevant provision in the rules. Let me try to explain the correct position of law as simply as possible.

Rule 2C, inserted via the Service Tax (Determination of Value) Second Amendment Rules, 2012 provides that:

"2C. Determination of value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering.- Subject to the provisions of section 67, the value of service portion, in an activity wherein goods being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely:-

1) Service portion in an activity wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant - 40 %

2) Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of such outdoor catering - 60 %

Explanation 1.- For the purposes of this rule, "total amount" means the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink(whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting-
(i) the amount charged for such goods or services, if any; and
(ii) the value added tax or sales tax, if any, levied thereon:"

What this means is that service tax as prescribed by the rules is chargeable at normal rates i.e. 12.36 %. This rate is applicable to only 40% of the total bill amount, since the rest falls under the abatement mentioned above. Since 12.36 multiplied by 0.4 is 4.94%, this is the percentage of tax that is to paid on the TOTAL bill amount (since Explanation 1 says that 'total amount' means gross amount charged in or in relation to the supply of food etc.). There is no involvement of a ‘service charge’ component here since the abatement of 60% means that 40% is considered as the implicit service charge for taxation purposes.

Thus, it is quite evident that the service tax of 4.94% is to be calculated on the Total Bill Amount and not merely the ‘service charge’ component of the Bill, as claimed by the Notice.

First of all, I think it is highly irresponsible that a well respected body such as the Delhi High Court Bar Association would release such a notice without backing the same with the requisite amount of research. Owing to the source from which the notice was released, most lawyers and law students did not bother to check the veracity of the claims since they assumed that the authors of the notice would know their law. I think they should rectify the harm done by issuing a press release accepting that what was stated in the notice was incorrect in law. Secondly, what this whole debacle illustrates is the lack of knowledge on service tax among the legal community. The general conception among law students that tax law is greek and latin does not help this cause either. So, in simple terms, everyone just assumed that since it’s called ‘service tax’, it is paid only on the ‘service charge’, which seems very logical. I think this should be a sort of wake up call to all interested students/general practitioners who believed this story and they should seriously consider brushing up more on their tax law knowledge.

Owing to the growing rate of Facebook hoaxes, as aptly underlined by the whole ‘Samsung paid Apple in pennies’ incident, as lawyers/law students, I feel it is our duty and moral responsibility to do research and to verify ANY claim based on ANY law ourselves before sharing it on a social media site. The ignominy that this incident has attached to it is as shameful as a doctor prescribing incorrect medicine for a fairly obvious disease. We are supposed to know the law, and even if we don’t know it yet, we absolutely MUST find out what the law is before giving advice to the public because that is what our law schools, internships and careers are supposed to teach us – how to do legal research!

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