CHARTERED ACCOUNTANTS ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) IN these petitions under article 226 of the Constitution, the Chartered Accountants Association and the Gujarat Institute of Civil Engineers & Architects have challenged the constitutional validity of section 88 of the Finance Act, 1997 and section 116 of the Finance (No. 2) Act, 1998 levying service -tax on the consulting engineers and architects and also on the practising Chartered Accountants.

(2.) SERVICE -tax was introduced by the Finance Act, 1994. Chapter V thereof contains the scheme and provisions relating to the tax. Section 66 imposed service -tax at the rate of 5 per cent of the value of taxable services provided to any person by the person responsible for collecting the service -tax. Taxable service was defined in section 65(1) to include certain services provided by stockbroker, telegraph authority and general insurer. The persons providing the services were liable to recover the tax and pay the same to the Central Government under section 68 of the Act.

(3.) AT the hearing of these petitions, Mr. Soparkar for the Chartered Accountants Association and Mr. Mihir H. Joshi for the Gujarat Institute of Civil Engineers and Architects have challenged the constitutional validity of the service -tax levied on the services rendered by the above professionals on the following grounds: