ZODAIC ADVERTISERS Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Art.226 of the Constitution of India challenges the imposition of service tax on the taxable service of advertising agency by Finance Act 2 of 1996.

(2.) The petitioner is a small scale industrial unit which is engaged in the printing of materials for customers - like visiting cards, stickers, banners, posters etc. The Petitioner purchases the cloth required for the banner as per the requirements of the customer, and then prints the matter given by the customer on the banner. After completing the printing work, the material is returned to the customer. The petitioner claims that it has no idea how the matter is utilised by the customer, that the work undertaken by the petitioner is similar to that of a printing press, and it is not acting as an advertising agency for its customers.

(3.) Service tax was introduced for the first time by the Finance Act, 1994 on certain categories of service. By the Finance Act 2 of 1996, it was extended to the taxable service of advertising agency. S.65(1 - A) defines advertising agency and S.65(16)(d) defines the taxable service of advertising agency.