INDIAN INSTITUTE OF ARCHITECTS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS judgment will govern the above writ petitions, which are filed under Art. 226 of the Constitution of India . Out of the above writ petitions, while W. P. No. 8539 of 2000 is filedby the indian Institute of Architects Association, Tamil Nadu Chapter on behalf of the architects in general, who are registered under it as the practicing architects, rest of the writ petitions pertain to the Chartered Accountantsand have been filed by the various representative bodies of which the practising chartered Accountants are the members since the question involved in identical in all these petitions and they are being disposed of by this common judgment.

(2.) SHORTLY stated, the Architects and Chartered accountants are challenging the constitutional validity of the provisions of finance Act by which the services offered by the Architects and Chartered accountants have been brought under the tax-net, which is to be chargedat five per cent of the value of the taxable service provided to any person by the architects or the Chartered Accountants. Sec. 116 of the Finance Act No. 2 of 1998 is in challenge, as amended by Act 32 of 1994, and has first defined the said services and included them in the tax-net. The relevant portions of the finance Act are as under : 65. Definitions In this context, unless the context otherwise requires, (5) "architect" means any person whose name is, for the time being, entered in the register of architects maintained under section 23 of the Architects Act, 1972 (20 of 1972) and also includes any commercial concern engaged in any manner, whether directly or indirectly, in rendering services in the field of architecture. (31) Practising "chartered Accountant" means a person who is a member of the Institute of Chartered Accountants of India and is holding a certificate of practice granted under the provisions of the chartered Accountants Act, 1949 (38 of 1949) and includes any concern engaged in rendering services in the field of chartered accountancy. (48) "taxable service" means any service provided, (p) to a client, by an architect in his professional capacity in any manner; (s) to a client by a practicing chartered accountant in his professional capacity, in any manner; The other features of the Act are that the providers of the services, i. e. "architects" and "practising chartered accountants" are assessees under the Act and are responsible for collecting the said tax at the prescribed rate. The relevant section, Sec. 66 (4), reads as follows : 66. Charge of service tax (4) with effect from the date notified under section 116 of the Finance (No. 2)Act, 1998, there shall be levied a service tax at the rate of five per cent of the value of the taxable services referred to in sub-clause (p), (q), (r), (s), (t), (u), (v), (x), (y) and (z) of clause 48 of section 65 and collected in such manner as may be prescribed. The said valuation of the "taxable services" is provided in Sec. 67. The relevantprovisions are as under : 67. Valuation of taxable services for charging service tax For the purposes of this Chapter, the value of taxable services. (o) in relation to the service provided by an architect to a client, shall be the gross amount charged by such architect from the client for services rendered in professional capacity in any manner; (r) in relation to the service provided by a practising chartered accountant to a client, shall be the gross amount charged by such accountant from the client for services rendered in professional capacity in any manner :

(3.) THE main argument for the petitioners wereaddressed bymr. Arvindp. Datar, learned senior counselandmr. Mohanparasaran, learned counsel and their argumentswere adopted by the other learned counsel appearing on behalf of thepetitioners. THE contentions of the learned counsel are as under :