KIRAN HOUSE Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners complaint that the show cause notices issued to them (which are in similar terms) regarding the levy of service tax are illegal. They pray that the notices be quashed.

(2.) We have heard Mr. S.P. Jain, learned Counsel for the petitioners. He contends that the Parliament had no legislative competence to levy the service tax. He further contends that the petitioners are covered by the exemption granted by the Government of India vide notification dated June 2, 1998. Despite the exemption, the respondents have issued show cause notices. Lastly, it is contended that the action of the respondents is violative of Article 14 of the Constitution. On this basis, the counsel prays that the show cause notices, a copy of one of which has been produced as Annexure P.2, be quashed.

(3.) The concept of 'service tax' was introduced by the Finance Act of 1994. Initially, the service tax was imposed in regard to the telephone, insurance and stock brokerage services. With the passing of years, the levy of service tax has been extended to various other services. The provisions as enacted after the Finance Act of 1998 are contained in Chapter V of "Nabhi's Service Tax Guidelines." The levy extends to the whole of India except the State of Jammu and Kashmir. Section 65 defines various expressions used in the Chapter. Clauses 10, 22 and 23 define a 'caterer', a 'mandap' and a 'Mandap-keeper. These read as under:-