G Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is a hotelier. The writ petition is preferred challenging Ext. P3 notice issued by the fourth respondent inasmuch as the said notice proposes to demand Service Tax on proceeds from sale of food and beverages at the premises of the hotel of the petitioner on which value added tax liability has been discharged by the petitioner and inasmuch as it proposes to demand Service Tax on services which come under the purview of tax on luxuries which was held unconstitutional by this Court. The petitioner is also challenging the constitutional validity of levy of Service Tax on services which come under the purview of 'taxes on luxuries' and 'taxes on sale or purchase of goods' and the constitutional validity of the definition of 'service' provided under Section 65B(44) of the Finance Act, 1994 inasmuch as the said definition covers services/transactions which come under the purview of 'taxes on luxuries' and 'taxes on sale or on purchase of goods'. The petitioner is also challenging the notification providing for levy of Service Tax on 60% of the accommodation charges and Section 67 of the Finance Act, 1994 which does not provide for deduction of the value of transactions which have been subjected to Value Added Tax.

(2.) Heard the Learned Counsel for the petitioner as also the Learned Standing Counsel for respondents 3 to 6.

(3.) In W.A. No. 1125/2013 and connected cases, a Division Bench of this Court held that levy of Service Tax on restaurants and hotels is beyond the legislative competence of the Parliament and they are covered by Entry 54 and Entry 62 respectively of List II of the Seventh Schedule of the Constitution and the States alone, therefore, have the legislative competence to enact any law imposing tax on the said matter. It is seen that the very basis of the writ petition is the decision of the Division Bench in W.A. No. 1125 of 201